Hawaii Real Estate News

The Honolulu real estate market, the primary sector of the Hawaii housing market, showed continued but possibly slowing signs of growth in the most recent tracking period. According to a July 8, 2010 report from the Honolulu Star Advertiser, “A recovery for Oahu home prices still looks hesitant six months into the year, as the median sale price for previously owned homes in June rose not quite 1 percent. Single-family homes sold for a median $575,000 last month, up 0.9 percent from $570,000 in the same month last year, according to data from the Honolulu Board of Realtors. The slight gain followed a 12 percent jump in May, which in turn was preceded by a 6 percent dip in April. For the first half of the year, the median sale price for Oahu homes is up 2.6 percent to $585,000 based on about 1,500 sales. The number of sales is up 32.5 percent year to date, but was up only 8.4 percent in June at 285 sales compared with 263 in the same month last year. Even if they are mostly small and somewhat inconsistent, transaction and price gains to date reinforce that the single-family home market is still on pace to reverse two years of price declines.”

A July 8, 2010 report from the Associated Press maintained a slightly more positive tone and did not mention a slowing pace of recovery regarding the figures available for June. It stated that “Honolulu Board of Realtors President Brian Benton says the latest sales figures for existing housing show Oahu real estate market continues to recover. The board reported Wednesday that June saw 285 single-family homes trade hands, an 8.4 percent boost over June 2009. It says the 396 condominiums sold last month represented a 38 percent jump. The median price paid for homes last month was $575,000, compared with $570,000 in June of last year. At the same time, the median price for condos dropped 3.2 percent to $300,000. The board also reports sales closed faster in June with single-family homes listing for 32 days, down from 48 days, and condominiums down to 31 days from 47.”

Despite a trend of recovery and gradual growth, the Kihei real estate market, a component of the larger Maui housing market, continued to face some challenges, such as a new proposed property tax increase. According to a June 2, 2010 article from the Maui News, “Condominium owners turned out Tuesday to oppose legislation that would push thousands of units into a higher property tax classification, saying it would be an unfair burden and could drive more condominium units into foreclosure. While there are 26,701 condos in Maui County, 3,565 of those would be affected by the tax change, according to property tax officials. But that fraction would be hit hard - condo owners affected by the law change would have paid a cumulative $9.1 million in additional property taxes if the legislation had gone into effect this year. "That's a lot of money to come out of one class of property owners," said Dave DeLeon, government affairs director of the Realtors Association of Maui. "I think this is very unfair," said condominium owner Steve Tenney. "It's draconian." The proposed legislation would require condo owners to pay taxes according to the "highest and best use" of their properties, as other landowners now do.”

However, the economic recovery should provide a boost to Kihei homes for sale, as well as the rest of the Maui real estate market. According to a June 26, 2010 article also from the Maui News, “The long-awaited economic recovery will start in Hawaii and on Maui at the start of the new fiscal year - "also known as next week," economist Paul Brewbaker told the Maui Chamber of Commerce on Friday.” The report by Chris Hamilton went on to state that “The state Council on Revenues chairman and principal owner of TZ Economics said that the recession already has ended and that his analysis predicted actual economic growth, not seen since the bottom fell out of the local and national economies nearly two years ago. "I think we're on the threshold, but Maui is still lagging behind the rest of the state," he said Friday after his speech. "The challenge I see is that perceptions are slow to adjust to the coming changes." Brewbaker briefed about 130 Maui business leaders at a Chamber of Commerce luncheon at The Fairmont Kea Lani, Maui resort.”

The Maui real estate housing market showed strong signs of improvement in the month of May thanks to the expected economic recovery. According to a June 14, 2010 report from the Pacific Business News, “Sales of condominiums in Maui County doubled last month, while sales of single-family homes rose 35 percent. There were 104 condo units sold in May, including two on Molokai, which was 100 percent more than the 52 units that sold in May 2009, according to the Realtors Association of Maui. There were 81 single-family houses sold on Maui alone last month, a 35 percent increase compared to the 60 homes that sold on Maui, Lanai and Molokai during the same month last year.”

The Pacific Business News article continued to state that “The median price of a condo in Maui County last month was $412,500, which was a 3 percent increase compared to $399,000 in May 2009. Year-to-date, single-family home sales are up 49 percent compared to last year, while the median price for the first five months of the year is $460,000, down 9 percent. Condo sales for the first five months of the year are up 59 percent; however, the year-to-date median price for a condo in Maui County is $427,750, a 34 percent drop from the same period last year.”

The gradually improving economy in the Aloha State should contribute to the recovery of the Maui housing market. According to a June 11, 2010 report from the Maui News by Harry Eagar, “Hawaii's economy has hit bottom and is bouncing back up, according to a county-by-county forecast by University of Hawaii economists. It will be a slow bounce, according to the University of Hawaii Economic Research Organization in a report issued today. Visitor arrivals are a key measure, and "all counties will see net growth for the year as a whole," led by "surprisingly consistent growth on Maui." UHERO notes that the Neighbor Islands went down further and faster than Oahu, so that even though they are rebounding faster than Oahu, the visitor industry on the state's most populated island should remain relatively better off.”

The Poipu housing market, a portion of the larger Kauai real estate market, showed some signs of possible improvement despite declining median prices. According to a report from a local business journal, both single family home sales and condominium sales were up drastically from year ago levels. The number of home sales rallied by a fully eighty percent, while condominium sales increased by almost forty percent. According to the Hawaii Information Service, 27 single family homes were sold on Kauai in the month of May, up from 15 sold in May 2009. The news was mixed, however, as the median price of these homes declined from $600,000 in May 2009 to $420,000 in May 2010. Five more condominiums were sold in May 2010, up from 13 in May 2009, while the average price fell a drastic 50% from year-ago levels. For the year so far, both homes for sale and condominiums for sale have seen median price losses of about 11%.

Poipu real estate condos for sale should also begin to benefit from a gradually recovering job market, which should in turn boost the overall economy of Hawaii. According to a June 11, 2010 report from Pacific Business News, “While Hawaii’s four counties will begin to see an economic recovery this year, real job growth won’t return until 2011, according to a new report. After suffering cumulative job losses of as much as 11 percent since 2007, Maui, Hawaii and Kauai counties will see smaller losses this year before registering gains of more than 1 percent in payroll jobs in 2011, according to the report by the University of Hawaii Economic Research Organization. Oahu, which saw smaller losses, will follow the same trend, with relatively flat growth this year followed by a gain of less than 1 percent in 2011. The Neighbor Islands suffered the largest losses in the visitor industry over the past two years, accounting for many of the jobs lost. However, all three counties should see growth in visitor arrivals ranging from 4.7 percent on the Big Island to 6.4 percent on Kauai to 7.4 percent on Maui, the report said. Despite that, visitor days for the Neighbor Islands will lag some 7 percent to 8 percent behind their peak values by 2012, while Oahu will rise to within a few percentage points of its 2007 peak values.”

The Waikiki real estate market, a sector of the larger Oahu housing market that includes condominiums and apartment buildings, is showing strong signs of improvement during the most recent tracking period. According to a June 8, 2010 report from Pacific Business News, the number of home sales on the island of Oahu increased significantly in the month of May, while the median price of a home increased relative both to year-ago and month-ago levels. The Honolulu Board of Realtors reported that the median home price in May increased by about 12%, finally breaking the $600,000 mark. There were also 284 sales in the month of May, 68 more than last year at the same time. Condo sales on the island of Oahu also increased, by about 36% relative to May 2009. The median price of a condo rose more moderately, although it was still higher than in May 2009.

Although the improvement amongst Waikiki condos for sale is partially driven by the federal tax credit, the market as a whole seems to be looking up. The article went on to state that: “There were 1,183 sales of single-family homes during the first five months of the year, which was a 40 percent gain over the same period in 2009. Condo sales totaled 1,605 during the January-May period, a 47.5 percent gain over 2009. Year-to-date prices were also up slightly. The median price of a single-family home for the first five months of the year was $585,000, a 3 percent increase over the same period in 2009, while the year-to-date median price of a condo was $305,000, a 1.5 percent gain over the same period in 2009.”

One particular example of Waikiki real estate faced a repossession and lawsuit over a property dispute. According to a June 25, 2010 report from the Honolulu Star Advertiser, “An affiliate of France's second-largest banking firm, Groupe BPCE, has assumed ownership of the Waikiki Trade Center office tower at 2255 Kuhio Ave. The BPCE subsidiary, Natixis Real Estate Capital Inc., repossessed the property on Monday in lieu of foreclosure. Natixis acquired the property from California-based investors doing business as Waikiki Trade Center Investors LLC, which paid more than $30 million in 2006 for the 24-story tower on leasehold land at the corner of Seaside and Kuhio avenues.”

The average price of an Oahu home for sale rallied strongly in the month of May, pointing towards the continued recovery of the Oahu real estate market. According to a June 3, 2010 article from Pacific Business News, “Oahu home prices are up 5.1 percent on average over the past year, according to a report released Thursday by a provider of real estate valuation and risk assessment for financial services companies. Comparing the three months ended May 31 with the same period last year, California-based Clear Capital ranked Oahu as the seventh-highest performing major market nationally, with a 2.2 percent price increase, behind Dallas, Pittsburgh, San Diego, San Francisco, Houston and Minneapolis.
The number of bank-owned properties on Oahu — 7.5 percent of the total — remains modest. The United States’ biggest offender in this area, Las Vegas, shows banks owning 45.9 percent of all properties on the market.”

The Oahu foreclosure market, especially in the commercial sector, continued to face difficulty despite the perceived recovery of the rest of the real estate market. According to a June 18, 2010 article also from Pacific Business News, “The Four Seasons Resort Maui in Wailea, which serves as collateral for one of the largest delinquent loans in Hawaii, got a bit of more bad news this week when a portion of the loan was assigned an appraisal reduction of 25 percent. The Maui resort tops a list of more than a dozen hotel, industrial, office and retail properties that have defaulted on multimillion-dollar commercial mortgages or have been lost to foreclosure. The $425 million loan on the Four Seasons Maui property, which is owned by billionaire Michael Dell’s investment firm, was transferred to special servicing in April after falling delinquent on payments, according to Trepp.com, which researches commercial mortgage-backed securities and commercial mortgages.”

The economy of the island of Oahu seems to be gradually recovering as well, which should help boost the already rising numbers in the Oahu housing market. A June 21, 2010 report from the Associated Press found that “Personal income in Hawaii has grown at the sixth-fastest rate in the country through the first quarter of this year. The U.S. Bureau of Economic Analysis reports Hawaii residents' cumulative personal income increased by 1.35 percent in the first quarter compared to the previous quarter. Military earnings jumped the most, at 0.37 percent. Retail trade, construction and federal civilian earnings all went up 0.13 percent. The industry with the largest earnings decrease was real estate, at a minus 0.05 percent.”

In a trend mirroring other neighbor islands, the Big Island Hawaii real estate market is seeing increased rates of sales at lower median prices. This theme extends to both single family homes and condominiums on the biggest Hawaiian Island. According to a June 7, 2010 article from the Pacific Business News, “Sales of condominiums on the Big Island rose by nearly 75 percent last month, and sales of single-family homes were up by 25 percent when compared to May of last year. There were 53 condos sold on the Big Island in May, 71 percent more than the 31 units sold during the same month in 2009, according to statistics from the Hawaii Information Service. A total of 128 single-family homes were sold in May compared to 102 homes sold during the same month last year. Prices, however, were down for both categories. The median price for a single-family home on the Big Island in May was $279,500, down 7 percent from $300,500 in 2009. The median price for a condo in May was $285,000, down 8 percent from $309,000 in 2009. Year-to-date figures follow the same trendlines, with sales of single-family homes — 612 in all — up 43 percent and the median price down 8 percent to $256,500. Sales of condos for the first five months of the year, with 213 units sold, were double that of the same period in 2009, while the median price, at $270,000, was also down 8 percent.”

However, delinquent loans, including foreclosed properties and short sales, continued to be a drag on Big Island homes for sale and other sectors of the local housing market. According to a June 18, 2010 report by Janis L. Magin of Pacific Business News, “Sometimes it can take several months for a property to drop off the list after the owner has settled with the lender, but Bratton said he has seen more Hawaii properties turn up on the lists of delinquent loans. Several Neighbor Island shopping centers, including the Kings’ Shops at Waikoloa on the Big Island, Coconut Marketplace on Kauai, Coconut Grove in Kailua-Kona and the Kona International Market, also turned up on Trepp’s list of distressed loans.”

The Kauai real estate market is showing mixed signals, including increasing home sales and declining median prices. According to a June 7, 2010 article in the Pacific Business News, “Single-family home sales on Kauai were up by 80 percent in May, while condo sales were up 38 percent compared to the same month last year. There were 27 homes sold on the Garden Isle last month, up from 15 in May of 2009, according to statistics from Hawaii Information Service. The median price for a single-family home, however, fell 30 percent in May to $420,000, down from $600,000 in May 2009. Condo sales were up last month, with 18 units sold compared to 13 units sold in May 2009. But the median price dropped 50 percent to $164,000, down from $330,000 in 2009. Year-to-date, prices in both categories were down 11 percent. The median price of a single-family home in Kauai was $468,500, and the median price of a condo was $264,350. Sales in both categories, however, soared when compared to the January-May period in 2009. Year-to-date sales of single-family homes, with 140 sold, were up 71 percent over the first five months of 2009, while the 89 condo units sold were 65 percent more than what sold during the same period in 2009.”

However, one prime example of Kauai real estate – not a Kauai home for sale but a large mixed-use project, continues to move forward. A June 11, 2010 report from the Pacific Business News by Jon Letman noted that “Despite an economic downturn lasting three years, Kauai’s largest real estate development continues to move forward, transforming Kauai’s South Shore. Kukuiula, a 1,010-acre project spearheaded by the Kukuiula Development Co. Hawaii LLC, a collaboration between DMB Associates Inc. and A&B Properties Inc., combines luxury resort residences, a 90,000-square-foot retail village, an 18-hole Tom Weiskopf golf course, clubhouse, spa and cottage-style visitor accommodations. In 2008 and 2009, new roads, a congestion-reducing traffic roundabout, beachside public parking and the Kukuiula Village retail center all came online, proving to skeptics that Kukuiula Development Co. and its partners had the staying power to survive the economic downturn. By the end of last year, the first golf holes, dotted with dozens of newly planted mature coconut palms, could be seen from the Ala Kalanikaumaka bypass built for the project.”

The Hawaii real estate market, comprising the most heavily populated island of Oahu and the smaller neighbor islands, faced the continuing challenges of foreclosures and distressed properties in the most recent tracking period. Overall, though, the Aloha State posted strong growth in the month of May. According to a June 8, 2010 article from the Pacific Business News, “Home sales on Oahu rose considerably in May, while prices for single-family homes and condominiums posted modest gains compared to the same month last year. The median price of a single-family home in May was $606,000, which was a 12 percent boost over May 2009, when the median price was $542,000, according to statistics from the Honolulu Board of Realtors. That was based on 284 home sales, which was a 31.5 percent increase over 216 sales in May 2009. Condo sales on Oahu soared 35.5 percent in May to 355 units sold, up from 262 units sold in 2009.”

The report on the health of the Hawaii housing market went on to analyze condominium sales and median prices. It noted that “Condo sales on Oahu soared 35.5 percent in May to 355 units sold, up from 262 units sold in 2009. The median price of a condo rose 4 percent to $312,500, up from $300,000 in May of 2009. ‘May’s sales figures and median prices are certainly encouraging for Honolulu’s real estate industry’ board President Brian Benton said in a prepared statement. ‘The pent up demand for residential properties are now being met with homes and condos being priced right for first-time homebuyers, those wanting to trade up to a larger home or individuals wanting to purchase investment property.’”

The delinquent home market, especially Hawaii foreclosures, continued to hound properties in the Aloha State. According to a June 18, 2010 article from the Pacific Business News, “The Maui resort tops a list of more than a dozen hotel, industrial, office and retail properties that have defaulted on multimillion-dollar commercial mortgages or have been lost to foreclosure.

The $425 million loan on the Four Seasons Maui property, which is owned by billionaire Michael Dell’s investment firm, was transferred to special servicing in April after falling delinquent on payments, according to Trepp.com, which researches commercial mortgage-backed securities and commercial mortgages.”

According to stats from the Honolulu MLS, the Oahu real estate market appears to be picking up from 2009. In 2009 of April there were 187 closed SFR compared 286 for 2010 of April. That is a 35% increase in the number of SFR homes sold.  Oahu condo also saw an increase of units sold as well. In 2009 of April there were 263 condos sold compared to 390 in 2010. That was about a 33% increase of condos sold over 2009.

The SFR median sales price for April 2010 was $634,969 compared to $646,584 in 2009, that was a 1.8% drop which was a lot lower than the 11.5% for April 2008 compared to April 2009 drop.  The condo median sales price for April 2010 saw an increase of 2.4% over April 2009.

The number of days on the market is decreasing another indicator the market is gaining momentum and strength. The number of days on the market for SFR was 59 in April 2010 and 82 in April 2009. That is a decrease of 28.8%. The number of days on the market for condos was 55 in April 2010 and 81 in April 2009. That is a decrease of 32.3%.

Hopefully we see types of numbers the rest of the year and we see the market continue to stabilize.