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.

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

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
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Here are ten things I didn’t get for Christmas, but am still hoping for.  I want the President to….

1.  Take responsibility and stop blaming Bush.  You’ve been on the job a year now and it’s time to take ownership of the economy, national security, etc.

2.  Profile the enemy.  It may not be politically correct, but the President’s job is to save American lives.  Have the courage to admit that a 23 year-old Muslim man is a greater security risk than a 58 year-old grandmother.  You’re in the business of saving lives and common sense is required.

3.  Tell us you get it.  Admit that our Islamist enemies want to kill us and that they won’t stop, no matter how much you try to make them like us.

4.  Agree with and act on Charles Krauthammer’s statement:  “Whenever a jihadist volunteers for martyrdom, we should grant his wish”.

5.  Stop the double-talk and use the word “terrorist”.  The American people realize that someone who walks into an abortion clinic and shoots the doctor is an extremist (the President’s favorite euphemism).  71% of Americans very clearly recognize that someone who boards a plane and attempts to kill all 300 civilians aboard is a terrorist.

6.  Treat terrorists as unlawful combatants; not as common criminals due all rights and privileges of an American citizen.

7.  Keep Guantanamo Bay open.  Recognize that 75% of Americans don’t want prisoners transferred to the continental United States or returned to their homeland where they can resume their jihad to kill more Americans.  Also, publicly admit that if Guantanamo Bay was miraculously closed tomorrow that Al-Qaida’s recruiting efforts would not end.

8.  Tell us he has accepted the resignations of Attorney General Eric Holder because he is not meeting our national security needs and Secretary of Homeland Security Janet Napolitano because she is not qualified for her position.

9.  Stop apologizing to the entire world.  Enough is enough and it’s time to publicly express pride in the many great things America has accomplished during its history.

10.  Stop trying to spend this country into bankruptcy.  Come to your senses and realize we cannot spend 10% more than we make every year without ruining the economy.

 
Contributed by Michael Zimmerman
Direct:  808-457-9683
Michael@Michael-Zimmerman.com
www.Michael-Zimmerman.com
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Robert Crandall, former CEO of American Airlines, was interviewed by Neil Cavuto on Fox News today.  In a discussion about Secretary of Homeland Security Janet Napolitano’s performance, Crandall said:

“Why do we continually put politicians in jobs they know nothing about?”

Summary
Take a look at the chart below.  The Capitol Place market has undergone a dramatic shift in the last nine months.  The inventory of apartments for sale is down 72% and look at those sales…red hot.  This leaves little for buyers to choose from.  One bedroom apartments have been a popular choice this year, but as I write, none are for sale.  The small inventory and lack of choice may set the stage for stronger prices in the coming year.  However, that may not come to pass if the economy continues to worsen or if the market is flooded by several owners trying to sell at the same time.

Capitol Place Condominium
1200 Queen Emma Street, Honolulu, HI 96813
Built: 2008

Schools
Elementary:  Royal
Middle:  Central
High:  McKinley 

Availability
Apartments in the building:  394
Apartments available for sale:  7
Average days on market to date:  108
Apartments listed for sale in the last 30 days:  0
Months of inventory available:  2.0 

Sales
Apartments under contract in escrow:  2
Apartments sold in the last 90 days:  11
Average days on market:  115
Sales Price / List Price:  97% 

What else would you like to know about Capitol Place?  Please visit my web site to view Honolulu condos for sale or request free reports for buyers or sellers.  If you’re thinking of selling your home, contact Michael Zimmerman for a no obligation consultation.

Contributed by Michael Zimmerman
Direct:  808-457-9683
Michael@Michael-Zimmerman.com
www.Michael-Zimmerman.com
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In the second week of December, the Federal Reserve (Fed) reiterated that their Mortgage Backed Security purchase program will end on March 31, 2010.  This program helped keep home loan rates low in 2009.

History has shown that when the Fed keeps rates too low for an extended period of time, this usually leads to higher inflation.  If the accommodation is removed too early, it can derail an already fragile recovery.  The Fed continues to walk this fine line, trying to get it just right.

Why is this Fed decision significant?  Let’s look at a few numbers to get an idea.  The Fed will purchase an average of $11.5 billion of securities each week through the end of the buying program.  This is less than half of what the Fed was buying regularly throughout 2009 and a third less than the Fed has been buying in recent weeks.

It’s a matter of simple economics.  When there is abundant supply and diminishing demand, the price of an item (in this case, it’s Mortgage Backed Securities) will subsequently go down.  When Bond prices start to decrease from the Fed’s diminished demand, home loan rates will likely rise.

 
Contributed by Michael Zimmerman
Direct:  808-457-9683
Michael@Michael-Zimmerman.com
www.Michael-Zimmerman.com
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A few more flood insurance questions are discussed below.

How much will flood insurance cost?

Flood insurance premiums vary, depending upon the date the building was constructed and the degree of risk of flooding.  To get a quote, please contact your insurance agent.  If you don’t have an agent, you can contact the National Flood Insurance Program for a referral at 1-800-427-4661.

When is the best time to buy flood insurance coverage?

Now.  There is a 30-day waiting period for flood insurance coverage to become effective.  If flood insurance is purchased in connection with a mortgage loan, there is no waiting period.

What is a Special Flood Hazard Area (SFHA)?

These are the areas with the highest risk for flooding, shown on the Flood Insurance Rate Maps as Zones A or V.

Over a 30-year mortgage, homes in these zones have a 26% chance of being flooded.

How will I know if my home is in an SFHA?

Check with your local community or to order copies of maps of your area, call 1-800-358-9616.

Lenders will notify borrowers if flood insurance is required as a condition of the mortgage loan (National Flood Insurance Reform Act of 1994).

For more information about the National Flood Insurance Program and flood insurance, visit FloodSmat.gov or contact your insurance company or agent.

Read Part 1

Disclaimer: The discussion above is based on FEMA’s publication titled Questions & Answers About Flood Insurance for Real Estate Professionals.

Contributed by Michael Zimmerman
Direct:  808-457-9683
Michael@Michael-Zimmerman.com
www.Michael-Zimmerman.com
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Are you looking for a special place to take your sweetie for a nice relaxing lunch?  Well, I’ve got just the place!

Tea at 1024
1024 Nuuanu Ave.
Honolulu, HI 96817

Michele Henry is the owner and she is always so friendly.

I take my wife to Tea at 1024 on a “date” three to four times a year and we thoroughly enjoy it every time.  We’ve been to afternoon tea at Neiman Marcus’ Mariposa and the Royal Hawaiian, but we get the most enjoyment at Tea at 1024 by far.

This place is different.  Everyone gets to choose their own tea cup to drink from.  There are Victorian hats and feather boas available for the women.  The decor was redone in 2009, is bright and is very relaxing.

Tea Service begins with your choice of tea and a house salad (usually spinach) lightly dressed with Vidalia onion vinaigrette dressing and feta cheese.  This is followed by chicken curry, egg salad, cheddar cheese & tomato and crab & olive tea sandwiches (they’re all outstanding).  Homemade scones with clotted cream & strawberry jam and assorted pastries complete this tasty meal.  My wife and I always leave with a full stomach and the price is right.

Tea at 1024 is great for a private get together, small parties or even wedding showers.  They are open Tuesday through Saturday.  Space is limited, so make a reservation at 808-521-9596, especially if you want to go on the weekend.

 
Contributed by Michael Zimmerman
Direct:  808-457-9683
Michael@Michael-Zimmerman.com
www.Michael-Zimmerman.com
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Michael Zimmerman just sold the One Waterfront Towers condominium with this stunning view after receiving several offers.

Sold for $505,000 Fee Simple

Two words:  SIMPLY SENSATIONAL

One Waterfront Towers Condominium
425 South Street Mauka/2302
Honolulu, HI 96813
MLS #2913492

View the 4-page Home Brochure

Relax and enjoy stunning sapphire and turquoise blue ocean views from this serene, elegant home.  The private lanai is perfect for entertaining your guests, unwinding while reading or enjoying the evening sunset.  The impeccable apartment features a wide range of upgrades and is ready for immediate move in.

This magnificent apartment is in impeccable condition and features several upgrades such as granite countertops in the kitchen and bathroom, refreshed kitchen appliances, front loading washer and dryer, enclosed shower, tiled floors, closet organizers and more.

• Stunning sapphire and turquoise blue ocean views
• Scenic views of the harbor, mountains and downtown
• Dine at sunset on your private lanai
• Grand open living space
• Floor to ceiling windows
• Exquisite tiled floors
• Dining area bar may be used as an eating area
• Ample in-home storage
• Living area approximately 804 square feet
• Lanai approximately 130 square feet
• One covered, assigned parking stall
• Includes one year Home Warranty

Are you looking for your very own high floor condo with a spectacular view?  Contact Michael Zimmerman or visit my web site to perform your own specific Honolulu condo search.

Contributed by Michael Zimmerman
Direct:  808-457-9683
Michael@Michael-Zimmerman.com
www.Michael-Zimmerman.com
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Why is flood insurance important?

Homeowner’s insurance policies do not cover flooding, so you may be required to purchase flood insurance separately.  If your home is in a designated Special Flood Hazard Area (high risk), the mortgage lender must, by law, require you to buy flood insurance as a condition for receiving a Federally backed loan.

But, even if you are not required by law to buy flood insurance, you should consider it because you do not need to live near water to be flooded.  In Hawaii, floods are caused by storms, hurricanes, and water backup due to inadequate or overloaded drainage systems, dam or levee failure, new construction, etc.

It is not just high-risk areas that are flooded.  Nearly 25 percent of all flood insurance claims come from medium- or low-risk flood areas.

Relying on Federal disaster assistance is not the answer.  Federal disaster assistance is available only if the President declares a disaster.  Even then, disaster assistance is often a loan that must be repaid, with interest, in addition to mortgages, other loans, and credit card debts.  Flood insurance pays even if a disaster is not declared.

Who can purchase flood insurance?

Anyone in a community that participates in the National Flood Insurance Program can purchase building and/or contents coverage, with a few exceptions.  Coastal Barrier Resources System (CBRS) areas, Otherwise Protected Areas (OPAs) and buildings principally below ground or entirely over water are not eligible for National Flood Insurance.

How do you obtain a flood insurance policy?

You can purchase National Flood Insurance from private insurance companies and agents.  Currently, there are over 100 insurance companies that sell National Flood Insurance coverage, in addition to some 60,000 independent insurance agents.

If the seller of the property has flood insurance coverage on the building, it’s possible that policy can be assigned to the buyer at the time of closing.

If the mortgage company requires flood insurance as a condition of the loan, the lender may escrow flood insurance premiums.

For more information about the National Flood Insurance Program and flood insurance, visit FloodSmat.gov  or contact your insurance company or agent.

Read Part 2

Disclaimer:  The discussion above is based on FEMA’s publication titled Questions & Answers About Flood Insurance for Real Estate Professionals.

Contributed by Michael Zimmerman
Direct:  808-457-9683
Michael@Michael-Zimmerman.com
www.Michael-Zimmerman.com
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