Oahu home sales December 2008

The last month of 2008 was surprisingly steady for homeowners on Oahu.  Sales volume of homes and condos was way down from 2007.  Oahu's median sales prices held steady though. 

It seems like prices throughout the U.S. have plunged, how can Hawaii's prices be holding steady?  Part of the answer is- location, location, location. Affluent people are still buying homes, resulting in price stability and even price increases in certain neighborhoods!  Yes, the number of properties sold has decreased significantly, but owners of the more expensive properties are selling at good prices or hanging onto their homes until better times return.

On the other hand, neighborhoods such as Ewa Beach, Wahiawa and Kapolei are taking big hits.  Why is the market picking on these neighborhoods?  Mainly because of their locations - we're talking long drive times to downtown Honolulu.  Most of Oahu's employment is in the downtown area.  Thousands of us are driving in that direction in the morning.  In the evening, the trend reverses and everybody goes home.  While the mileage isn't that far - Ewa and Kapolei are less than 20 miles from downtown - the number of cars on the road means it can take an hour to drive in each direction, every day.

Last week I spent a few days looking at homes with prospective buyers who have jobs that don't require driving into downtown each day.  Looking at homes in Kapolei Knolls, I was shocked at the losses some homeowners are looking at.  Most of the homes in this neighborhood were built around 2006.  Owners often paid in the high $700's and $800's for these relatively new, large homes on large lots.  They are now selling in the $600's for the most part.  Looking into the tax records, I saw that many of those owners had purchased with 100% financing.  For various reasons, they can no longer pay their mortgages and they're looking at zero equity. 

That's a bummer for the owners - and an opportunity for buyers!  For people with steady jobs, a downpayment in the bank and good credit, they can buy at significant discounts.  Interest rates on 30-year mortgages are back around 4.5%.  And these are FIXED RATE loans.

More good news - the City and County of Honolulu will break ground on its new rail system later this year.  Yeah, it's going to take 10 years to complete the system.  Imagine what changes there will be in the future for Kapolei, Ewa, Makakilo and other neighborhoods between these and downtown.  Taking a train to work, not dealing with parking (and the costs to park downtown), some time to relax and read - it sounds nice!

Take a look at a recap of single family home sales on Oahu for the last two years:

Aloha, Mike Bates

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