Sign up for a free monthly Honolulu Real Estate Market Report via email.  This report features graphs and numeric tables showing the trends in:

• number of single family home and condo sales
• median sales prices of single family homes and condos
• single family home and condo days on market (how long it takes to sell)
• sales figures for all Oahu neighborhoods
• inventory of single family homes and condos for sale

Summary
Ko’olani sales trends have been so good that in many cases, buyer choices are quite limited.  Sales are consistent and the number of apartments for sale continues its decline that began in mid-2008.  Certain floor plans are not available as I write and not much is available on higher floors.  Some apartments are priced above what the market will bear and their time on the market confirms that observation.  Buyers should stand ready to act when something they’re looking for comes on the market. 

Ko’olani Condominium
Address:  1177 Queen Street, Honolulu, HI 96814
Built:  2006 

Schools
Elementary School:  Kaahumanu
Middle School:  Central
High School:  McKinley

Would you like to learn more about Ko’olani?  If so, contact Michael Zimmerman, the condominium expert.  Please visit my web site to view Ko’olani condos for sale, request special reports or search for other Honolulu condos for sale. 

The Honolulu Board of REALTORS® released resale figures for the month of February.  According to the analysis conducted by the Board, using data collected from its computerized Multiple Listing Service (MLS) system, the statistics are:

Single Family Home Resales

Condominium Resales

 
*Median price means half the prices were above and half below the given price.

During February, sales of 157 single-family homes and 231 condominiums were reported through the Board’s MLS, an increase of 21.7 percent for single-family homes and an increase of 44.4 percent for condominiums, compared to the same month last year.  The median prices paid for island properties in the February was $570,000 for single-family homes and $298,000 for condominiums, an increase of 3.6 percent for single-family homes and an increase of 0.3 percent for condominiums from February 2009.

This video explains how and why Honolulu interest rates may move higher this year.

NOTE:  I have nothing to do with any web site offering property for rent.  I work solely with real estate property sales and I do not manage property.

In the last few months, I have been contacted by no less than six people asking me about the validity of a 37th floor rental at Harbor Court listed on Rentals.com.  Each person told the same story: the web site offers a large 37th floor, two bedroom apartment with stunning ocean views for rent.  And all this for only $1800/month (red flag: that is substantially below the market rate rent).  Each went on to say they could never reach the property manager directly by phone…he would always call back (red flag).  The property manager asked for the down payment and security deposit to be sent via Western Union (yet another red flag).

Four of the six called me before they sent money via Western Union; unfortunately, two did not.  I sincerely doubt they recovered their money.  Bottom line, if it sounds too good to be true, it probably is.  Please proceed with caution.

Read what Rentals.com has to say about Avoiding Scams and Fraud.

The extended Home Owner Tax Credit may be a window of opportunity for some folks who have wanted to sell their home, whether to move up or to downsize, but the credit expires on April 30, 2010.

This $6500 tax credit is for current home owners who have owned and resided in their home for at least 5 consecutive years out of the past 8 years.

If you combine this tax credit with historically low interest rates and great values in the market place, it might be the right time to make your move.  However, this tax credit is only for a limited time and waiting too long may cause you to miss out on market opportunities that could benefit you.  You must have a binding purchase contract signed by April 30, 2010.

Each person’s situation is different.  I will be happy to meet with you and provide a no-obligation consultation to discuss your home’s current value as well as the prices of homes in your target range.  Don’t look back and wish you had sold your home instead of waiting.  There‘s no obligation to explore your options, so call Michael Zimmerman at 808-457-9683 today to schedule a meeting.

Summary
Despite a sluggish Oahu economy, Nauru Tower sales really took off at the end of 2009.  That leaves very few apartments for buyers to choose from.  Nevertheless, there are a few high floor 2-bedroom apartments for sale and two parking stalls are also available.  In addition, there is a high floor 1-bedroom leasehold apartment for sale, but it is fairly expensive.

The chart above shows the number of sales recorded each month vs. the number of apartments available for sale at the end of each month.  As you can see, the number of apartments for sale steadily declined during the last year.  In the last six months, Nauru Tower averaged two sales each month and if that pace continues, it will take over 2.5 months to sell the 5 apartments on the market. 

Nauru Tower Condominium
1330 Ala Moana Blvd., Honolulu, HI 96814
Built: 1991

Features
Conveniently located across the street from the Ala Moana Beach Park and just one block from the Ala Moana Shopping Center and Ward Centers.

Availability
Apartments in the building:  302
Apartments available for sale:  5
Average days on market to date:  90
Apartments listed for sale in the last 30 days:  0
Months of inventory available:  2.5

Sales
Apartments under contract in escrow:  2
Apartments sold in the last 90 days:  3
Average days on market:  20
Average price per square foot:  $743.09
Sales Price / List Price:  94%

Would you like to learn more?  Please visit my web site to view Nauru Tower apartments for sale or conduct your own Honolulu condo search.  Contact Michael Zimmerman for a no obligation consultation if you’re considering selling or buying a home or investment property.

NOW Is the Time to Make Your Move.  The 2009 First Time Home Buyers Tax Credit is expiring April 30, 2010.  This tax credit was expanded for the benefit of qualified home buyers (those who have not purchased a home within the last three years):

• Allowed home buyers more time into the spring house-buying season to find their home, get loan approval and close the transaction.
• The income limits were raised from $75,000 to $125,000 for single buyers and $125,000 to $225,000 for married couples.

With attractive Honolulu home prices and historically low mortgage rates, this is a good time to make your move.  If you didn’t find the right home in 2009, you still have time to take advantage of this opportunity.  Don’t delay; you must identify your home and have a binding purchase contract signed by April 30, 2010. 

Call Michael Zimmerman at 808-457-9683 to set up a free consultation to help you explore and maximize this opportunity.

The Federal National Mortgage Association, also known as Fannie Mae, is offering a 3.5% incentive** for buyers who purchase a Fannie Mae-owned home between January 28 and April 30, 2010.  Buyers may receive up to 3.5% of the final sales price for:

• Closing costs
• The purchase of new Whirlpool® appliances by Fannie Mae; or
• A mix of closing costs and appliances, at the buyer’s discretion, up to the maximum 3.5%.

To be eligible for this incentive:

• Offers must be accepted on or after January 28, 2010
• Property sales must close before May 1, 2010
• Buyers must be owner-occupants (excludes investors)

**Lenders may impose their own limitations on the use of the 3.5% incentive, so buyers should consult their lenders for guidance.

There process of buying a home from Fannie Mae is different from that of buying from a private citizen.  These Frequently Asked Questions provide more detail.

Disclaimer:  Consult your attorney and your CPA to ensure you fully understand the ramifications of a short sale.

Given the state of our economy, it appears short sales are becoming more popular as unemployment drives some folks toward foreclosure.  Hawaii foreclosures rose in 2009, destroying owners’ credit in the process.  A short sale may have helped minimize that damage.  For a homeowner to qualify as a short sale candidate, generally, the following must be true:

1. The homeowner is in default - this means the owner is at least 30 days past the last day of most lenders’ grace period.
2. The homeowner has little or no equity in the property - the market value of the home is less than or about equal to the amount owed to the lender(s).
3. The homeowner has a legitimate hardship - the owner must be able to prove that a real hardship caused them to fall behind in their payments.  Examples include:

• temporary or permanent job loss
• significant pay cut
• divorce
• illness or death in the family
• increased property taxes
• decrease in property value
• increase in payment due to an Adjustable Rate Mortgage (ARM) resetting

If you are considering a Honolulu short sale, contact Michael Zimmerman for a free consultation.

Summary
It’s been more than two years since we’ve seen this many sales at Harbor Court.  Three apartments sold in the last quarter of 2009:  a penthouse sold for $800,000 and two other apartments sold for $560,000 and $545,000 (consistent with the sale at $550,000 in August 2009).  So, we’ve seen three non-penthouse apartments sell in the $550,000 range in the last five months.  That appears to be what a reasonable buyer is willing to pay in today’s market.  Further evidence of that is seen in the number of days higher priced Harbor Court apartments stay on market.  Apartments priced over $600,000 stay on the market for several months (some have been on the market for years) and ultimately sell for much, much less.

The chart above shows the number of sales recorded each month vs. the number of apartments available for sale at the end of the month.

Harbor Court Condominium
66 Queen Street, Honolulu, HI 96813
Built: 1994

Feature
Conveniently located just a few blocks from Chinatown and right across the street from Aloha Tower Marketplace.

Schools
Elementary:  Royal
Middle:  Central
High:  McKinley

Availability
Apartments in the building:  120
Apartments available for sale:  1
Average days on market to date:  91
Apartments listed for sale in the last 30 days:  0
Months of inventory available:  1.5

Sales
Apartments under contract in escrow:  0
Apartments sold in the last 90 days:  1
Average days on market:  121
Average price per square foot:  $410.56
Sales Price / List Price:  83%

Contact Michael Zimmerman if you have a specific question about Harbor Court.  Please visit my web site to view Harbor Court apartments for sale, conduct your own Honolulu condo search or request special reports for home sellers or buyers.

The Federal government enacted three separate initiatives during the last eight months designed to help the home buyer make better financing decisions.  These initiatives impose requirements that impact the loan closing timeline and affect the closing process for lenders and settlement agents.  The three initiatives are:

May 2009 Home Valuation Code of Conduct (HVCC) - ensures borrowers have sufficient notice of appraisal content and promotes the accuracy of appraisals by shielding appraisers from undue influence.

July 2009 Housing and Economic Recovery Act / Mortgage Disclosure Improvement Act (HERA / MDIA) - protects borrowers by making them more informed and confident in their home financing choices by specifying timing in regard to initial disclosures, fee collection and final disclosures.

January 2010 RESPA (Real Estate Settlement Procedures Act) Reform - intended to help borrowers avoid surprises at closing by placing tolerance levels on all charges for services associated with obtaining the mortgage where the vendor is not selected by the borrower.

Bottom line, if you are financing your home purchase, these new procedures make 30-day closings a thing of the past.  45 days will become the standard time to close.

More details about RESPA Reform

Contact Michael Zimmerman if you need a referral to a reliable mortgage professional.

The Honolulu Board of REALTORS® released resale figures for the month of January.  According to the analysis conducted by the Board, using data collected from its computerized Multiple Listing Service (MLS) system, the statistics are:

Single Family Home Resales

 
Condominium Resales

 
*Median price means half the prices were above and half below the given price.

During January, sales of 162 single-family homes and 227 condominiums were reported through the Board’s MLS, an increase of 32.8 percent for single-family homes and an increase of 42.8 percent for condominiums, compared to the same month last year.  The median prices paid for island properties in the January was $597,500 for single-family homes and $299,000 for condominiums, an increase of 10.8 percent for single-family homes and a decrease of 2 percent for condominiums from January 2009.

The Chinese New Year is just two weeks away.  To help celebrate, Mr. Clear Englebert, author of Feng Shui for Hawaii, will give free feng shui lectures at four Oahu libraries.

As reported in the Honolulu Advertiser, these lectures will focus on the different schools of feng shui and explain chi energy and how to attract and maximize its positive flow.  Englebert explains why some energy is considered negative and how to deflect it.  He will also discuss furniture selection/placement, locating powerful spots in a room, harmonizing your home with the surrounding land and using feng shui in a tropical garden.

The lecture dates, times and locations are:

Tuesday, Feb. 2, 6:30pm at the Kapolei Library (693-7050)

Thursday, Feb. 4, 6:30pm at the Kailua Library (266-9911)

Saturday, Feb. 6, 2:30pm at the Mililani Library (627-7470)

Sunday, Feb. 7, 2:30pm at the Kaneohe Library (233-5676)

Contact Michael Zimmerman if you need a referral to a Certified Feng Shui Practitioner.

The tax credit is not just for those buying a bigger home, it also works for those wanting to downsize

When the government extended and expanded the First Time Home Buyer Tax Credit, many people thought the expansion applied only to homeowners moving to a more expensive home.  The expansion includes those who have owned a primary residence and lived in it for at least five consecutive years out of the last eight years.  If current homeowners want to downsize, they may qualify for the tax credit, even if the new home costs less than the original residence they are selling.

Your income and new home purchase price may affect the amount of credit you are entitled to, so be sure to check with your tax advisor.

If you have been considering selling your property and moving into a smaller home, please consider if it’s the right thing for you before the tax credit expires.  Place your new home under contract by April 30, 2010 and close by June 30, 2010 and you may have a few extra dollars in your pocket.

Read more about the First Time Home Buyer Tax Credit.

The Federal Housing Administration (FHA) announced home loan changes that will become effective April 5, 2010.  The measures are intended to help the FHA better manage its risks, while continuing to provide affordable, responsible mortgage products that will support the housing market’s recovery.

Here’s what’s changing:

1.  Increased mortgage insurance.  The mortgage insurance premium will increase from 1.75% to 2.25%.  This change will add some cost to purchasing a home, but will not overburden consumers since the mortgage insurance is paid over the life of the loan, rather than upfront at closing.

2.  New down payment and credit score requirements.  Buyers who have a credit score of at least 580 may still be able to purchase a home with a 3.5% down payment, but those with credit scores less than 580 will be required to put down at least 10%.  This change is designed to help the FHA balance its risk, while providing affordable down payments for consumers with good credit history.

3.  Reduced seller concession.  Home sellers may offer the home buyer 3% to help defray closing costs, as opposed to 6% under the previous policy.

To find out if an FHA loan is right for you or if an FHA loan is even possible on property you’d like to purchase, contact Michael Zimmerman for referral to a great mortgage professional.

An article in Newsweek titled If You Don’t Buy a House Now, You’re Stupid or Broke reminded me of a blog post I wrote in June 2008 titled Should I Wait for Honolulu Home Prices to Drop?

The main point of both articles is this:  interest rates may have a greater impact on what you ultimately pay for a home in the long run than small changes in the initial purchase price.  Put another way, a .50% rise in interest rates costs you more than the $10 or $20 thousand you might save by waiting to purchase your home.  Also, don’t forget to factor in the potential loss of the tax credit offered by the government.

Looking at it from the buyer’s affordability perspective, a trusted Honolulu mortgage advisor wrote, “if rates go up by .50%, [the buyer] can afford a property that is 5% lower in price.”

Each individual home buyer’s situation is different and he/she must decide what is best for him/her.  If you’d like a free consultation or referral to a great mortgage professional, please contact Michael Zimmerman.

Summary
As you can see below, a steady number of Keola Lai sales have driven the number of apartments on the market down to one third of what they were just six months ago.  That’s great news for the few owners selling their apartment.  However, that’s not good news for buyers because they have very few choices:  two of the six apartments on the market are Penthouses selling at $2.3 million each.

Keola Lai Condominium
600 Queen Street, Honolulu, HI 96813
Built: 2008

Schools
Elementary:  Royal
Middle:  Central
High:  McKinley 

Availability
Apartments in the building:  350
Apartments available for sale:  6
Average days on market to date:  126
Apartments listed for sale in the last 30 days:  0
Months of inventory available:  2.4 

Sales
Apartments under contract in escrow:  1
Apartments sold in the last 90 days:  6
Average days on market:  108
Average price per square foot:  $616.88
Sales Price / List Price:  97%

Would you like to learn more about Keola Lai?  If so, contact Michael Zimmerman, the condominium expert.  Please visit my web site to view Honolulu condos for sale or request free reports for buyers or sellers.

Contributed by Michael Zimmerman
Direct:  808-457-9683
Michael@Michael-Zimmerman.com
www.Michael-Zimmerman.com
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The Honolulu Board of REALTORS® released the resale figures below based on data collected from its computerized Multiple Listing Service (MLS) system.  The number of homes and condos sold are for the year-to-date (2009 and 2008).  The median prices cited below are year-to-date for 2009 and 2008 as well. 

Single Family Homes

Condominiums

*Median price means half the prices were above and half below the given price.

Please visit my web site to order special reports for buyers and sellers or conduct your own Honolulu real estate search.

A traditional method to determine if the Honolulu real estate market favors the buyer or seller is to look at the number of months of inventory remaining.  A conventional thumb rule states that if the number of months of inventory remaining is greater than 6, we’re in a buyer’s market.  Less than 6 is a seller’s market.

What is the number of months of inventory remaining?  Simply put, it is a measure of how long it will take to sell all real estate currently on the market in a particular category.  Examples of categories include:  Oahu Single Family Homes priced above $1 million, Condos in East Oahu, Ko’olani condos, etc.  The months of inventory calculation is straight forward:  number of homes for sale divided by the number of sales in a given month.

Examples (using Dec 2008 and 2009 sales)

1.  Oahu Single Family Homes priced above $1 million
2008 – 554 homes for sale divided by 21 sales = 26.4 months of inventory
2009 – 329 homes for sale divided by 31 sales = 10.6 months of inventory

2.  Condos in East Oahu
2008 – 234 condos for sale divided by 14 sales = 16.7 months of inventory
2009 – 112 condos for sale divided by 30 sales = 3.7 months of inventory

3.  Ko’olani condos (1177 Queen Street in Kakaako)
2008 – 27 condos for sale divided by 4 sales = 6.8 months of inventory
2009 – 15 condos for sale divided by 3 sales = 5.0 months of inventory

The attached Months of Inventory Remaining PDF file shows the inventory remaining for several categories of Oahu single family homes and Honolulu condos for sale.  You can see that the months of inventory remaining fell dramatically in 2009, indicating buyers have less to choose from and therefore, less power in the marketplace.

 
Contributed by Michael Zimmerman
Direct:  808-457-9683
Michael@Michael-Zimmerman.com
www.Michael-Zimmerman.com
Subscribe to Honolulu Real Estate and Community News
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