Here's the latest Oahu newsletter from George Stott, a realtor who's been in the islands for nearly 40 years and in the business since the mid-1970s:
http://stott.com/docs/Q3_2007_Newsletter.pdf
A couple excerpts:
"Total sales on Oahu continue to decline. Comparing January through September, island-wide sales were down 11.7% in 2007 compared to 2006. However, for the month of September, island-wide sales were down a whopping 20.4% comparing 2007 to 2006. The decline in July and August were both under 10%; the step change (increase) in September may merely be an aberrant or it could also be the start of much lower sales rates on Oahu."
"We have a different mix of homes selling today than what sold prior to this past March when subprime lending problems were initially identified. Last year, almost one-half of the sales to first-time buyers nationwide involved 100% financing. With first-time buyers, often there are two working spouses, so a family may have relatively high monthly income but very limited savings available for a down payment. Recently, sales of lower-end homes have been curtailed by far more stringent qualification standards. Many lenders will no longer make 100% loans and now insist upon a down payment of at least 5% or 10% which rules out many first-time buyers. The decline in sales of lower-end homes causes the median sales price to increase from where it would have been if there were a similar number or percentage of lower-end homes selling each month; i.e., the mix of homes selling is different now from what it was when buyers had far greater access to 100% financing."
"Plaguing us today are frequently changing underwriting requirements or rules. In mid-September, I attended a presentation on subprime lending problems along with about 100 other realtors. One of the speakers asked for a show of hands from those attendees that had recently had a transaction fall out of escrow because of changing underwriting criteria after the borrower had seemingly been fully approved for the loan. Almost 100 hands went up including mine... Forecasters are now projecting that the median sales price of American homes nationwide will fall this year for the first time since federal housing agencies began keeping statistics in 1950 thereby contradicting the widely held notion that there is no such thing as a nationwide housing slump... One of the speakers was the Chief Economist for the Bank of Hawaii, Paul Brewbaker, who stated his opinion again that home prices will not increase on Oahu until sometime in the 20-teens; i.e., sometime in 2013 to 2019."
Of course the news isn't all bad:
"On November 9, 2006 all 464 units in Waikiki Trump Tower sold out for more than $700 million in less than eight hours establishing new world records for both total sales dollars and total units selling at a residential development in a single day. Now, several units are back on the market ranging from #1101, a 418 sq. ft. studio unit facing Diamond Head for $639,000, to #3301, a 2 bdrm, 1,406 sq. ft. unit facing the ocean for $3,288,000."
No word on whether longboards will fit in the elevators, but let me know if you want me to accompany your realtor on a walkthrough...
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