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Condo sales tumbled 50% in February


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POSTED: Tuesday, March 03, 2009

Condominium sales on Oahu fell more than 50 percent last month and single-family home sales dropped by 21 percent as further dampening in consumer confidence, tighter lending requirements and uncertainty about government intervention continued to take their toll on Hawaii's real estate market.

“;We are starting to see tremendous price adjustment in the market with sellers accepting offers far below asking price,”; said Chason Ishii, president and chief executive of Coldwell Banker Pacific Properties. “;It's neighborhood centric, but in most cases, sellers know that they can't price their units at or above the last sale.”;

Falling demand pushed down the median price paid for a single-family home on Oahu to $555,000, an 8.2 percent drop from the prior year, according to statistics released yesterday by the Honolulu Board of Realtors. Likewise, the median price paid for a condo fell to $297,000, an 11.3 percent decline from the prior year.

In February, 129 single-family homes changed hands as compared to 163 during the same period a year ago. However tightening lender standards, a pullback in Hawaii's visitor industry and a drop-off in investor activity cut condominium sales to 160 from the year-ago 321.

“;I'm losing condominium sales because my buyers can't get the loans or didn't qualify by the time the loan was supposed to go through,”; said John Riggins, owner of John Riggins Real Estate.

In the current environment, more sales are falling out of escrow, Ishii said.

“;We would typically have between 20 to 30 percent of our sales falling out of escrow,”; Ishii said. “;But, in February, 30 to 40 percent of our sales fell out of escrow and financing was a significant factor.”;

But it's not just financing that has constrained Oahu's market, a lack of consumer confidence has caused some investors to flee, said Harvey Shapiro, HBR's research economist. And, the condominium market has been hardest hit by that exodus, Shapiro said.

“;Conditions now are not unlike they were back in the 1990s when the market was weak and we saw condominium numbers at parity with the single-family market,”; he said.

Falling demand in the condominium market, at least in the near term, is likely to keep prices falling, Shapiro said.

“;When there is weakness in demand, there is less pressure on pricing,”; he said.

However, government stimulus programs and Oahu's inventory-constrained environment are likely to keep prices from falling too dramatically, said Scott Higashi, executive vice president of sales for Prudential Locations LLC.

“;For most neighborhoods on Oahu, we are expecting to see drop-offs in the 6 to 10 percent range for the year,”; Higashi said. “;Also, we are expecting that the legislation that helps stave off foreclosure will help prices from dropping too much.”;

Only 25 single-family homes and 13 condominiums were added to the inventory in February, Shapiro said.

“;These inventory levels aren't indicative of a slow market where there is an overhang of inventory,”; Shapiro said. “;It's more like everything in this market is just miniaturized.”;

Last month, there were 1,928 single-family homes and 2,507 condominiums in inventory as compared to the run-up in inventory that characterized Oahu's last housing downturn in the mid-1990s, when there were more than 2,400 single-family homes and more than 4,000 condominiums on the market, he said.

“;Fortunately, we don't have the overabundance of inventory that is threatening most of the mainland markets, and the sizable number of properties that went into pending status during February proves that there continues to be demand for our residential dwellings,”; said Sandra “;Sam”; Bangerter, HBR president.

Going forward, real estate experts have said government programs like the recently instituted $8,000 tax credit for new homebuyers could help further improve Hawaii's market. However, it's hard to judge the programs' impact, they said.

 

Home sales

The number of homes sold on Oahu in February with the median price and percentage change from the same month last year:

 

HOMES

SALES

                                                                                       
February 2009129
February 2008163
Change-20.9%

MEDIAN PRICE

                                                                                       
February 2009$555,000
February 2008$599,000
Change-8.2%

CONDOS

SALES

                                                                                       
February 2009160
February 2008321
Change-50.2%

MEDIAN PRICE

                                                                                       
February 2009$297,000
February 2008$335,000
Change-11.3%

Source: Honolulu Board of Realtors

NEIGHBORHOOD WATCH

Oahu single-family home and condominium resales data for February by neighborhood with the percentage change from last year:

 

SINGLE-FAMILY HOMES

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
No. Neighborhood groupSales PCT. changeMedian pricePCT. change
1Moanalua-Kalihi100.0%$477,500-35.7%
2Honolulu110.0%$690,000-11.5%
3Kapahulu-Diamond Head4-42.9%$655,000-9.0%
4Waialae-Kahala6+50.0%$1,242,500+38.1%
5Aina Haina-Kuliouou5+25.0%$863,000+7.7%
6Hawaii Kai8-11.1%$772,500-25.4%
7Kailua-Waimanalo12-14.3%$714,800-6.3%
8Kaneohe4-50.0%$539,500-19.8%
9Windward Coast3+50.0%$555,000-5.5%
10North Shore3-50.0%$575,300-23.3%
11Wahiawa2N/A$430,500N/A
12Mililani12-7.7%$572,500-4.1%
13Makaha-Nanakuli6-60.2%$317,800- 11.2%
14Ewa Plain19-40.6%$425,000-14.7%
15Makakilo4-33.3%$560,000+8.2%
16Waipahu15-16.7%$510,000-12.8%
17Pearl City-Aiea5+25.0%$384,000-50.5%

CONDOMINIUMS

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
No. Neighborhood groupSales PCT. changeMedian pricePCT. change
18Moanalua-Salt Lake9-10.9%$299,000-4.3%
19Kalihi-Palama3-57.1%$415,000+35.0%
20Downtown-Nuuanu8-57.9%$311,000-4.3%
21Ala Moana-Kakaako13-67.5%$290,000-53.0%
22Waikiki26-64.4%$317,500+9.9%
23Makiki-Moiliili20-44.4%$271,500-16.5%
24Kapahulu-Kuliouou5-37.5%$280,000-47.6%
25Hawaii Kai10-23.1%$485,000-10.2%
26Kailua-Waimanalo6-33.3%$377,500-4.3%
27Kaneohe4-60.0%$441,500+14.8%
28Windward Coast0N/AN/AN/A
29North Shore0N/AN/AN/A
30Wahiawa0N/AN/AN/A
31Mililani16-38.5%$329,500+0.6%
32Makaha-Nanakuli4-55.6%$117,300-25.7%
33Ewa Plain13-43.5%$290,000+3.6%
34Makakilo4-33.3%$211,500-41.7%
35Waipahu8-33.3%$297,500-0.8%
36Pearl City-Aiea11-35.3%$229,900-21.4%

Source: Honolulu Board of Realtors