Hawaii Randy's Real Estate Opinions: August 2009

Last week I heard multiple news reports about the drop in property values in Hawaii since last year.  The reports stated that we have the biggest drop in value in the nation of all major markets.  According to the reports you would think we were in a freefall compared to the same period last year.

What the numbers show is that the neighbor islands did take a pretty big hit, but Oahu (Honolulu County) which accounts for a majority of the sales activity held is values much better.

Here are the numbers posted by the Hawaii Association of REALTORS® per the MLS systems.

2009 JULY HAWAII REAL ESTATE MARKET REPORT:

Single Family Homes

Units Sold

Median Sales Price

--------------------------------------------------------------------------------

Condominiums

Units Sold

Median Sales Price

*Information provided by Hawaii Association of REALTORS® and Title Guaranty is deemed to be accurate, but not guaranteed.

I get calls from buyers whose real estate agent told them to call me to see one of my listings.  Their agent can't make the appointment or show the property because they are at work (their real job).

If that buyer finds a property they like, their agent is not qualified to write the offer.  They did not examine the property for potential issues and needed addendums.  Many times they can't even be reached to get the offer written in a timely manner.  You can almost guarantee they do not know the market or are even proficient in contract writing.   

If they work a regular job elsewhere, they may not be available to attend the home inspection or the escrow signing.  In my experience they will not be attentive to the escrow process, will blow the time-line and will be impossible to communicate with.  Yet somehow they feel they will have earned a commission.

When working with me, buyers and sellers get an agent who does not cut corners. answers the phone, knows the market and truly cares about my clients and will always put your needs first.

Here are a few of the things I consider standard service.  Very few agents in my area are offering these services to their clients.

For my sellers:

• Quality pictures including wide angle.
• Your home posted in the MLS and many websites (too many to list).
• Color flyers and brochure box in front of listing (where allowed).
• A pledge of services.
• A website with a domain name and sign with the web address.
• Virtual tour.
• Regular Sunday open houses.
• Broker's open houses on the monthly date for the area.
• An electronic lockbox that tracks everyone who enters the home.
• Regular communication with sellers including comparable market reports.
• Print ads.
• The property promoted at regional REALTOR® meetings.
• E-mails to top producers in the area.
• Benefit of the market knowledge of one of the top, full time licensed brokers in the area and his support team.

For My Buyers:

• Free buyer's representation.
• I will schedule and accompany you when you preview homes and point out potential red flags.
• Market analysis and public records check of any property considered for an offer.
• Prepare all documents and explain them in detail.  You sign nothing you do not understand.
• Negotiations by an experienced licensed broker.
• Manage the entire escrow process.
• Help with referrals of other professions such as inspectors, loan officers, etc.
• Accompany you to the escrow and mortgage signing.
• I continue to work with you after the transaction if any issues or questions pop.

Many agents have not done well in the market and have cut back on expenses.  That is the reality.  The problem is clients are buying and selling the most expensive thing own or will own.  Why should they entrust it with an agent who does not have enough money to properly market their home or have the time to properly represent them? 

I will finish this with a statement I have made many time in the past.  Real estate is a full time profession.  You cannot sell real estate part time and do it well.  Theoretically it is possible, I am just not seeing in real life.

Hawaii has some of the lowest real estate taxes in the country.

Beside being in paradise and having limited amounts of land, which put pressures on the real estate values, we do have very reasonable real estate taxes. 

The reason for this is that we do not fund our school system through real estate taxes.  Schools are funded by our state general fund.  Real estate taxes pay for county government services.

In parts of the country folks will let their land go for back taxes.  That is unheard of here.  When the economy took a big tank on the mainland, we felt it here, but nothing like some places did. 

What I tell folks is that we sell dirt.  It is some of the most expensive dirt on the planet and we are not making any more. (except on the Big Island, courtesy of the volcano).

Here are the 2009 Hawaii Real Estate Tax Rates for each county: