Isle Homes: Sales still low

It's still anyone's guess whether Honolulu's real estate market, which peaked in 2005, has bottomed out or is gearing up to land.

[edward kelly]

The decline in Hawaii home
sales is not part of the
Mainland sub prime meltdown.
The other great tourist attraction, Las Vegas, is now
the American leader in
foreclosures. Hawaii home
sales is not the problem.
Next year will see a 20%
decline in tourism and an
advertising effort wont
change the percentage. It
is a turning point in Hawaii
history. The best indicator of
trouble is Hawaii car sales
not new homes.

[uhhuh]

Hawaii is fairly well positioned to benefit from the ongoing disappearance of the middle class and the growth the high and low ends of the economic spectrums

as the poor become poorer and the rich become richer --- the rich will always needs a place to escape and isolate themselves

it will be interesting to see if the kahalas and the koolinas survive this latest downturn

[Working Stiff]

You get a lot more for $600,000 in the mainland if you have that much.Maybe all of the homeless can be groundskeepers for the rich.Will there be blaring music from the arab temples once the oil money comes in?

[neutral]

edward kelly wrote:

The decline in Hawaii home
sales is not part of the
Mainland sub prime meltdown.
The other great tourist attraction, Las Vegas, is now
the American leader in
foreclosures. Hawaii home
sales is not the problem.
Next year will see a 20%
decline in tourism and an
advertising effort wont
change the percentage. It
is a turning point in Hawaii
history. The best indicator of
trouble is Hawaii car sales
not new homes.

There will be a few subprime issues in Hawaii, it would be safe to say it would probably be in the area of Ewa Beach and Kapolei where more new homes were developed. The fact does remain that if the sales figures for July are accurate, that there were a total of 631 or so homes and condos that sold, a lot of real estate agents are again going home in August and September with no paycheck and when a sale is made by a RE agent, you can be sure that with the income received, it will be pretty much a catch up game with their home budget. It was nice to have an equity line of credit but even that has been greatly reduced in recent weeks by the banks and even some line of credit has been frozen because of the uncertainty in the credit market because banks have begun to see people tapping their line of credit toward use for keeping up with their monthly obligations. There is also an increase in people tapping into their IRA and 401K plan and they will start seeing a bigger hurt when they see their tax bill. It will be a struggle for quite awhile yet.

[neutral]

edward kelly wrote:

The decline in Hawaii home
sales is not part of the
Mainland sub prime meltdown.
The other great tourist attraction, Las Vegas, is now
the American leader in
foreclosures. Hawaii home
sales is not the problem.
Next year will see a 20%
decline in tourism and an
advertising effort wont
change the percentage. It
is a turning point in Hawaii
history. The best indicator of
trouble is Hawaii car sales
not new homes.

The 20% decline in tourism will be seen later this year and not next year. Car sales have already gone down in Hawaii and it will get worse because of the elimination of leases with their SUV models although leases can still be had from banks and credit union willing to take the chance. Unemployment figures will jump again at the end of this month and into September which translate into layoffs from companies dependent on the tourist trade.

[Steven Akana]

This is all so very ridiculous. I'm retired Army and I just think it's criminal that the average working person living on Oahu , family of four, dual income earning around 70-75K has to live in section 8 housing in order to make ends meet if they can. Or do we need to continue the festering stagnation of multigenerational homes which is a highly inefficient way to develop real responsibility and growth as people. It's all part of this do nothing approach to life in general. The disparity between the rich and poor will grow wider. Resentment and sense of entitlement will rise among all the uneducated local workers. I as well am a decendent of slave labor in the islands, yet recognized that all that laid ahead for allot of locals, including myself, was a marginal existence of just
scraping by, drinking, fighting ,and knocking up teenage girls unless I left and joined the service. Hawaii will always remain a haven for the rich and a military subsidized jobs program for the locals. Never forget tourism was born out of the military occupation from WWII on. Aloha!

[Yellow Dog]

I love these regular happy talk features Allison Schaefers writes on our housing markets. It's especially amusing to go back and read the past installments, which always talk about how strong the market is, only to see the real world prover her wrong.

You want to hear the truth about real estate prospects, don't ask a realtor. Regardless of market conditions, their mantra remains constant: "It's a great time to buy!"

Look at the economy! Look at tourism! This is the time to sell, if you can. Next year you'll get 20% less than can now (if there are any buyers left then).

[REGURU]

neutral wrote:

<quoted text>
There will be a few subprime issues in Hawaii, it would be safe to say it would probably be in the area of Ewa Beach and Kapolei where more new homes were developed. The fact does remain that if the sales figures for July are accurate, that there were a total of 631 or so homes and condos that sold, a lot of real estate agents are again going home in August and September with no paycheck and when a sale is made by a RE agent, you can be sure that with the income received, it will be pretty much a catch up game with their home budget. It was nice to have an equity line of credit but even that has been greatly reduced in recent weeks by the banks and even some line of credit has been frozen because of the uncertainty in the credit market because banks have begun to see people tapping their line of credit toward use for keeping up with their monthly obligations. There is also an increase in people tapping into their IRA and 401K plan and they will start seeing a bigger hurt when they see their tax bill. It will be a struggle for quite awhile yet.

Good Morning Real Estate GURU.

You sure are missed over at the Star Bulletin.

How's your wife's 04 to 07 clients? All in foreclosure now? Ouch.

[Thomas]

Airfare to Honolulu from Los Ageles in July 2007 was $370 today the same airfare is over $800 plus the high cost of hotels ! Get ready for a very big drop in tourists to Hawaii !

[Correction]

Steven Akana wrote:

I as well am a decendent of slave labor in the islands,.....
Hawaii will always remain a haven for the rich and a military subsidized jobs program for the locals. Never forget tourism was born out of the military occupation from WWII on. Aloha!

Your 3 sentences above are just plain wrong.

1) There was no "slave" labor in Hawaii. The plantation immigrants knowingly came to Hawaii for the opportunity of a job, something they couldn't find at home. Nearly 1/2 went back home when their contract was done. They arrived over years of time so if things were really that bad, they would have stopped coming but they didn't. So quit calling your own ancestors ignorant and be a little more appreciative of the jobs that were provided to them by the Plantation owners.

2) Da "locals" are just a bunch of immigrants anyway. You imply that they have a right to be in Hawaii or a right to a certain job. They deserve nothing. If they don't like it, just like you did, they can move along once again. That's life.

3) Tourism did not arise out of WWII. The Royal Hawaiian and the Moana were built around the 1930s. The single cause for the massive growth in tourism was not WWII, it was the jet airplane.

[Rayem]

As usual the media publish the opinions the people from the real estate industry. Is there anyone out there still believes in them? The whole world knows. Just watch this:
http://www.youtube.com/watch...

[pali]

I was going to say something positive like, "Hold on to your property if you can - things will get better."

But now I'm just going to strap in and watch the fireworks.

[Patient Buyer]

Looks like Hawaii is an identical cycle to the one in the 1990's (the bottom chart shows the cycle most clearly):
http://www.housedata.info/HI/Honolulu/

That would imply that there is 3-4 years and a further 20% drop in prices before this cycle bottoms out.

[Cat Manapua]

Real estate sales and values continue to decline.

The economic outlook,at least through 2010,is bleak.

Be patient. Wait to buy. There's plenty more decline to come.

[Dman]

I would think that hawaii is a few years behind the mainland so we have quite a ways to go. Home price's should drop about 10-20% over the next few years and as tourism drops look for our housing market to go down even more. Sorry real estate pros but people who are smart are waiting it out. Prices will not go up so why but now if you can wait it out.

[Ainokea]

You know, everytime they talk about housing it's the people in office to blame. They are the one who doesn't know they are doing. All they care is having things they want and not the people. I've seen so many houses been built that they don't consider about the roads or anthing that will help the people in hawaii

[Ainokea]

Everyone should look the state government. They are the one to blame. They are the one who is passing permits to built more homes. With that...they don't take consideration on roads, schools, traffic, or anything that will elivate problems within the state. They should be the one to blame and not the people.

[hzz]

Relax people, this happens about every 10 years. I've been through it twice in Hawaii in my lifetime. Look at historical price graphs. About every 10 years, the sky falls for some reason, prices plunge, and the sheep believe that no home will ever sell again. Then it starts to turn and those same sheep buy in too late and get slaughtered. It's a boom bust cycle. There will be a bottom, not sure when, but then new higher highs will be set just like always. You folks should stop moaning and look for ways to separate yourselves from the rest of your sheep flock.

[neutral]

REGURU wrote:

<quoted text>
Good Morning Real Estate GURU.
You sure are missed over at the Star Bulletin.
How's your wife's 04 to 07 clients? All in foreclosure now? Ouch.

Sorry, not married. But it is what it is. I do have a piece of real estate in Hawaii in H/L ridge but the nice thing about it is that the mortgage have been all paid up since I acquired it. No Ouch here at all.

[Dakar]

The mainland markets started their falls with small decreases too, and increasing inventories (back in 2006 & 2007). The large drops you see now came later. They also started up a couple of years earlier. I'm sure Oahu will fare better than some, but being on an island doesn't repeal the laws of economics, or eliminate business and real estate cycles.