The headline you won’t see elsewhere: “Hawaii Condo prices increase over November 2007!”

The Honolulu Board of Realtors just released the November real estate statistics and here is the simple summary – number of sales down, prices flat. The mainstream media will crow about how terrible things are, but look a little closer and they aren’t that bad. Here we go:

- Number of Sales down for both Single Family Homes and Condos in Hawaii. No surprise here. SFH at 170, down from 243 in October and 245 in November of 2007. Condo sales at 201, down from 316 in October and 379 in November of 2007. This large drop in sales was magnified by the seasonal drop in sales this time of year.

- Prices for Hawaii Real Estate are flat, flat, flat. SFH median price was $594,500, down from $625,000 in October and $610,000 in November of 2007. Where does “flat come from?” Look at the last three SFH years.
January of 2006 SFH = $615,000;
November of 2006 = $610,000.
January of 2007, SFH = $600,000;
November of 2007 = $610,000.
January of 2008, SFH = $600,000;
November of 2008 = $594,500.
That is about as flat as you can get over a three-year period.

- Condo Median Price was $316,200, down from $325,000 in October and “UP” from $315,000 in November of 2007. Think we will see that headline anywhere?

- Days on Market (DOM) up for SFH and Condos: SFH DOM were 57 in November, up from 52 in October 2008 and 53 in November of 2007. Condo DOM at 68, up from 53 in October 2008, and up from 42 in November of 2007. This is the highest DOM for condos for the year, but just about average for SFH for the year.

- Inventory down for both SFH and Condos. SFH inventory of 2,096 was down from 2,107 in October of 2007, and up from 1,952 in November 2007. Condo inventory of 2,655 was down from 2,663 in October 2008 and up from 2,442 in November of 2007. Both of these numbers are consistent within the year.

- Months of Remaining Inventory – down for both SFH and Condos: SFH MORI of 8.6 is down from 9.8 in October of 2008 and up from 7.4 in November of 2007. Condo MORI of 8.4 is down from October 2008 and up from 5.8 in November of 2007. We are still in a healthy range for Months Of Remaining Inventory. Remember, in the 6 – 10 month-range, prices remain flat. And that is what we are seeing.

Overall, there is nothing in these stats that should worry buyers or sellers. For people waiting for prices to fall, they have waited 3 years by now and prices are still almost identical for SFH and are up slightly for condos. So – “why wait?” is the question. Inventories are stable, so there are still many choices for buyers. So, how is Ewa Plain doing? Down 8.9%. Keep in mind that a 1% increase in interest rate would more than wipe out that reduction in price. It still doesn’t make sense to wait with interest rates low and the future of low interest in doubt.

Post from: Hawaii Real Estate Reporter

November 2008 Hawaii Housing Statistics Recap- Condo Prices Up From November 2007!

This article is an act of futility and of no value that I can see. Why predict? What is the point exactly? Especially if you are this group from UH who have rarely gotten anything right yet. Notice that this prediction is already a modification of their earlier prediction. They thought they were right before.

Of course, the media will love it – the people who are hoping that prices fall will love it, and those planning on buying a house who want an excuse to wait will love it. In my first open house in Manoa in 1972, almost every guest told me, with great conviction and belief, that prices were definitely going to drop – as we stood in that $65,000 Manoa house. Without going into the specifics of why my opinion is that this prediction is less than useful, let’s pretend that it is absolutely correct. Perfectly accurate.

OK, these guys are geniuses and over the next three years prices fall by 11% – so what. What do you think interest rates are going to do over the next three years? Anyone want to guess that they may be 1 or even 2 points higher than today? That is a much more likely prediction. And if that likelihood happens, what will be the cost of buying a house 3 years from now? Answer, more than if you bought it today, even if prices drop 11% or 12% or 13%!

Please remember, if mortgage interest rates increase 1 point, property prices have to fall 10% for the cost (payments) to remain the same. When you view this prediction as a reason to wait, it may be a huge mistake. What is more likely to occur, prices dropping 11% over the next 3 years or interest rates going up more than 1 point? Anything over a 1 point increase in mortgage interest more than wipes out an 11% drop in prices.

Post from: Hawaii Real Estate Reporter

This Prediction is Futile and Useless: “Home Prices Predicted to Slide 11%”