Hawaii Randy's Real Estate Opinions: November 2007

Despite all the doom and gloom reports not only is are the real estate prices in Honolulu County showing the highest increase, foreclosure rates are among the lowest statewide in the nation.

The numbers reported in the local media from a survey in RealtyTrac shows the foreclosure rate in Hawaii ranked 43^rd in the country. 

While the foreclosure rate in the country went up 2% from September to October it dropped 3% in Hawaii during the same period of time.

The Kailua communities (zip code of 96734 and some connecting neighborhoods) have seen changes in the real estate market.

The below figures include both fee simple and leasehold properties.  These are only the totals and average sale prices.

Single Family homes sales:  The month of October saw a drop in the number of closing and for average sales price.  Year to date both numbers have shown increases over the 2006 figures.  Inventory levels are at about 4 months worth.

Condo and townhouse sales:  Have shown increases in average sales price over 2006 levels.  Number of units sold is down year to date from last year, but did show a rebound in October.  There is currently less than 4 months worth of inventory.

Currently Active for Sale (as of 11/29/07): 

• 138 Single Family Homes
•   58 Condos/ Townhouses

Currently in Escrow (as of 11/29/07): 

•   40 Single Family Homes
•   18 Condos/ Townhouses

*These numbers were taken from the Honolulu Board of Realtors MLS system and are deemed to be accurate, but not guaranteed.

You can find out more about real estate in Hawaii at: http://www.hawaiirandy.com/

Or at: http://www.localism.com/

The Kaneohe communities (zip code of 96744 and some connecting neighborhoods) have seen changes in the real estate market.

The below figures include both fee simple and leasehold properties.  These are only the totals and average sale prices.

Single Family homes sales have softened. Average sales prices of single family homes have seen some dropping, while sales volume has increased. Inventory levels have decreased to a little over 5 months worth.  This is compared to over 8 months worth of inventory earlier in the year.

Condo and townhouse sales are another story.  Inventory is relatively low and prices have continued to climb.  Sales volume was a little slower earlier in the year; has picked up to similar levels as 2006.

Currently Active for Sale (as of 11/29/07): 

• 185 Single Family Homes
•   58 Condos/ Townhouses

Currently in Escrow (as of 11/29/07): 

•   27 Single Family Homes
•   17 Condos/ Townhouses

*These numbers were taken from the Honolulu Board of Realtors MLS system and are deemed to be accurate, but not guaranteed.

You can find out more about real estate in Hawaii at: http://www.hawaiirandy.com/

Or at: www.localism.com

Salt Lake Area (tax map key 111, includes Moanalua, Aliamanu, Mapunapuna and Airport Area)

The below figures include both fee simple and leasehold properties.  These are only the totals and average sale prices.

Single Family homes sales have softened. Average sales price of single family homes have continued to climb again.  Sales volume is down from last year.  Inventory levels are still hovering at about 6 months.

Condo and townhouse sales are another story.  Inventory is low with just a little more than 2 months worth.  Average sales prices have seen a nice jump over last year.  The Salt Lake area is still in a seller's market for condos.

Current Active for Sale (as of 11/29/07): 

• 20 Single Family Homes
• 49 Condos/ Townhouses

Currently in Escrow (as of 11/29/07):  

•   6 Single Family Homes
• 17 Condos/ Townhouses

*These numbers were taken from the Honolulu Board of Realtors MLS system and are deemed to be accurate, but not guaranteed.

You can find out more about real estate in Hawaii at: http://www.hawaiirandy.com/

Or at: http://www.localism.com/

This Westloch sales report covers both Westloch Estates and Westloch Fairway (part of zip code of 96706).  We have seen a flattening of the market when comparing with 2006 numbers.  Earlier in the year things dropped a little, but have increased slightly to bring the year to date numbers close to 2006 levels.

Month to date in November there have been 3 additional closings.

Interest rates are still low and there is a good selection of inventory making it a good market for buyers.

Currently Active for Sale (11/29/07): 

• 18 Single Family Homes

Currently in Escrow (11/29/07):

•  6 Single Family Homes

*These numbers were taken from the Honolulu Board of Realtors MLS system and are deemed to be accurate, but not guaranteed.

You can find out more about real estate in Hawaii at: http://www.hawaiirandy.com/

Or at: www.localism.com

Last Friday's game was the most important and possibly the most exciting game in the University's history.  Boise State has won the WAC conference for the last 5 years.  University of Hawaii was undefeated and trying for their first outright WAC conference Championship.  They were co-winners in the past.

Their victory over Boise State made the University of Hawaii the WAC Champions!

This is the best season in the history of the school.  Until that game we were not getting a lot of respect on a national basis.  Things have changed. 

Our quarterback Colt Brennan, who was barely mentioned as a Heisman hopeful in the past has now been elevated to on one of the possible favorites by the sports announcers.  Colt was hurt and missed most of three games, yet is still breaking NCAA records left and right.

The final game of the season will be against the University of Washington Huskies.  If Hawaii can win that game in a strong showing they should be heading to one of the five BCS bowl games.  They need to be in the top 12 on the BCS standings and after the Boise State game they moved up the 12^th ranked team on the BCS standings, higher on the other polls.

Here are the coach's comments about the upcoming game:

• Jones Addresses The Media Heading Into Washington Game
• UH Football Website

OK, I am bracing for the backlash from that title.  Those who know me know that I am not a big government kind of guy.  To the contrary in almost every case I believe in less government; unfortunately not in this case.

There have been several great blog posts written the last couple of days on similar topics.  Rather than hijacking their posts I felt it better to write my own.

• CALIFORNIA SUBPRIME BORROWERS MAY GET RELIEF? - More Questions than Answers by Lenn Harley
• The subprime mantra, "Easy in.....easy out" by Broker Bryant Tutas
• What Part Do Individual Markets Need to Play In Our National Mortgage Crisis? By Carole Cohen
• Foreclosures in California Will Be Reduced! By Gene Reider

The mortgage industry has not stepped up to the plate and has done next to nothing to self-police.

In the past I have written on topics like licensing of loan officers and gotten more than a few on the lending side upset.  The funny thing is that almost without question everyone from the REALTOR® and the public side completely agreed with me.  What is wrong with the lending industry?  Is it just pure greed or something else?

When a group of top real estate agents get together all we seem to talk about is raising the standards of our profession. 

When loan officers join us all we speak about is which lender went out of business or what a mess the lending industry is in.

So why do the professional real estate agents want higher standards and the lenders want the Wild West?

Let me back up a bit.  Not all lenders and loan officers feel that way.  The professional loan officers I deal with on a daily basis feel the same way I do.  They would like the standards raised and the bums removed from the industry.

Let me share a few examples of things that have really gotten my dander up.

1. I deal with a lot of active duty military and VA eligible clients on a regular basis.  On more than a couple of times I have run into vets that a lender claimed to be giving them a VA loan to find they were doing a bait and switch.  A conventional loan with some similar name, (Veterans Choice, Veteran Select, etc.).  Heavy points and heavy closing costs and who knows what else.
2. I have seen many bad loan approval letters on offers sent in on my listings.  One claimed the buyer's funds were verified.  It fell out of escrow 5 weeks later because the buyer's did not have their cash.  The loan officer was from out of state, leaving no recourse to the seller.  Our state regulators have no authority over them and the loan officer just moves on, leaving the seller holding the bag.
3. On more than a few occasions I have seen or heard of loan officers (mostly out of state) trying to promote loan fraud. Present an inflated offer with huge cash back from the seller. They claimed to have an appraiser who said they would bring in the appraisal, even though it was a stupid price that was nothing close to the true market value of the home.
4. Recently a client of mine asked me about a friend's purchase.  They said it seemed so different then their experience.  The bottom line was they had a real estate agent who was also a loan officer and they wound up with a huge closing cost and a loan other than what they expected.

Dual services like real estate agent and loan officer or a real estate company also providing in-house lending should be strictly forbidden in my opinion.  The conflict of interest is so obvious I am amazed that any professional would go there.  There are many who will argue about how much money they can make or it is OK if you disclose the conflict.  I disagree and not only will not do it myself, but would never hang my license with any company engaging in that practice.

In Hawaii if a loan officer is from out of state.  We have to make a complaint at a federal level.  Our state regulators have no authority in this matter.

If you are a reputable lender or loan officer, why in the world would you want these folks running around doing the dirty things they do?  They not only ruin the reputation of the industry they hurt the public.

Back to my original premise: 

• If the lending industry is unwilling or unable to better protect the public and raise their standards, than government needs to do it for them.

In the last few months I have seen several real estate brokerages heavily recruiting agents from other companies.  In our daily mail at the office there are a stack of envelopes from other real estate companies to each and every agent within our company.  While on floor duty I have answered the phone to have another broker try to recruit me.

Just a few of my observations:

1. I find these practices tacky and show a total lack of class.
2. They seem to be willing to take on any agent.
3. Why would I want to hang my license with a company who will take on anyone and everyone?  Their reputation will not be helped and their E&O insurance will be going through the roof if it is not already.
4. What type of agents are they attracting with these tactics?

I consider these tactics poaching.  Why not just set up a table in front of our entrance and hand out brochures and applications to our agents as they enter the building?

I am glad my company does not resort to contacting agents from other brokerages at their place of business to recruit them.  I think it is a total lack of class.  If I ever decided to leave the brokerage I am with (which I have no designs to do), those companies would not be on my list of possible new homes.

I am sure there are some who will defend the practice; probably on the grounds that it is effective.  I have heard similar arguments for other business practices that I find distasteful.

So what do you think?

Last week The Maui Circuit Judge lifted the injunction that has prevented the Superferry from traveling between Maui and Oahu.

The Superferry will begin sailing o December 1, 2007.  The Hawaii Superferry is offering an inaugural fare of $29 each way per passenger from Dec. 1^st until Dec 20^th.

Operations to Kauai will still be suspended by the management of the Superferry until they can address concerns of Kauai residents.  Many may remember the violent protestors who entered the water blocking the ship from docking in Kauai and others who attacked customers and their cars who were planning to ride the Superferry.

The Hawaii Superferry will resume service between Oahu and Maui on Dec. 1.

They will be offering inaugural fares:

O‘ahu - Maui or Maui - O‘ahu
$29 for sailings Dec. 1 - Dec. 20
$39 for sailings Dec. 21 - March 12
$55 each way for passenger vehicles

From a recent press release:

"We appreciate the support we've received from everyone who shares the vision of uniting our islands and families by sea," said President and CEO, John Garibaldi. "Hawaii Superferry and its more than 300 employees look forward to a new beginning as we start our voyages between Oahu and Maui, a new choice for interisland travel. "

http://www.hawaiisuperferry.com/

Prices in the Honolulu market grew 14.79 percent from September 2006 to September 2007 according to the September 2007 LoanPerformance Home Price Index reported by Pacific Business News.  14.79 percent growth for Honolulu was the highest in the nation.

The article also included the market with the biggest drop, which was Riverside-San Bernardino-Ontario market in California seeing the greatest drop at 13.59 percent.

According to the report home prices fell in 17 states tracked by the index, while five states saw price appreciation of between 5 percent and 10 percent.  Hawaii was the only market to experience double-digit growth.

It was reported that the price index covers 956 Core Based Statistical Areas and 659 counties in 50 states and the District of Columbia.