Oahu home sales down September 2008

Oahu's home prices took their biggest hit of 2008 in September.  Prior to this, we had been happy to say that the U.S. housing market's slide had a minimal effect on Hawaii.  Last month, median prices of homes and condos on Oahu fell about 10% compared with prices one year earlier.  Sales volume (the number of properties sold) was down 16% for single family homes and 26% for condos and townhomes.

The median price of a home on Oahu was $590,000 - home prices have not been below that figure since April, 2005.  Median condo prices were $296,000, a level not seen since April, 2006.

Oahu median home and condo prices by neighborhood

What does this mean for prospective homebuyers on Oahu?

- Get your downpayment ready and talk to your mortgage lender!  Prices are down and the trend may continue for awhile.  If you see a home in the right neighborhood and at an affordable price, take a serious look and decide if it's time to buy.

- Prices in Honolulu are always high compared with other communities.  If prices continue to slide here, they will also be sliding in other places and Honolulu homes will still be relatively expensive.  A friend in Florida e-mailed me today and told me about a house her friend just bought for $28,000.  For people waiting for that to happen in Honolulu, odds are they'll never buy a house.

- Out of the way places like Makaha and Nanakuli are where the lowest priced houses can be found.  There are a handful of homes for sale priced less than $250,000 in those areas.  Makaha and Nanakuli are approximately 35 miles from downtown Honolulu - too far to drive for the average Oahu resident.

What should Oahu homeowners do?

- You know the old saying, buy low and sell high.  Are we at the lows yet?  Nobody knows for sure.  One thing is certain: selling today means accepting less than what we could have sold for a couple of years ago.  I would ask a homeowner, when did they buy the home?  If they purchased it five or more years ago, they can probably still make a tidy profit on the sale.

- Some Oahu homeowners are feeling the pinch of the slow economy and layoffs.  If they need to sell to avoid foreclosure, go for it.  Better to sell and get what you can than let the house go to auction and risk it selling for substantially less.

- Many of us bought at prices we can afford (no, it wasn't easy) and can hang on through this slump.  If you need a house to live in and can afford to keep up with the mortgage payments, feel comfortable knowing that the housing market in Hawaii will rebound.  I believe that five years from now this slump will be gone and people will be feeling really good about investing in their homes again. 

If you're in doubt, come talk to some of my neighbors that bought their homes 10, 20, 30+ years ago.  A few of them are in their 80's and they'll tell you how they could barely afford to buy their homes for $10,000 - those same homes are now worth in excess of half a million dollars and their mortgages are paid off.

Aloha, Mike Bates

• Hawaii realtor

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