Hawaii real estate market to fall further, expert says
POSTED: Tuesday, August 18, 2009
While many U.S. mainland real estate markets are finally showing signs of recovery, steep drops in the number of Hawaii sales during the second quarter indicate the market has further to fall, according to the head of a national consumer real estate information portal.
“;Hawaii definitely has a grind ahead of it,”; said Marty Frame, general manager of Cyberhomes.com, a division of Lender Processing Services Inc.
Many mainland markets are starting to see year-over-year and quarterly improvements in sales coupled with erosion in price, but Hawaii is still experiencing declining sales, Frame said.
“;For a year now, the West Coast has seen continued erosion in pricing but increased velocity of sales,”; Frame said. “;That trend has started to move across the mainland, but we aren't seeing it in Hawaii.”;
In the second quarter, combined single-family home and condominium sales in Hawaii fell 37.8 percent from the previous quarter, Frame said. However, the combined median sales price for single-family homes and condominiums in Hawaii is still up 10.15 percent for the quarter and is flat for the year.
Since what goes up must come down, the general conclusion that can be reached from this data is that Hawaii prices still have further to fall, Frame said.
“;My personal opinion is that markets with exuberant appreciation are bound to get back closer to where they were,”; he said.
Mainland markets, particularly those that have been hardest hit by foreclosure activity, have seen prices bottoming out at 2002 and 2003 levels, Frame said. Since prices in Hawaii peaked later than on the mainland and the foreclosure footprint has been smaller, prices in the islands are more likely to bottom out at 2004 and 2005 levels, he said.
John Riggins, owner of John Riggins Real Estate, said while he agrees with Frame that Hawaii's real estate is not out of the woods, some markets, especially on Oahu's Leeward side, may have already bottomed out.
“;In Ko Olina we've seen properties that sold for $1.5 million a year ago sell for $825,000 today, and some Kapolei properties that changed hands for $900,000 are now closer to $600,000,”; Riggins said.
But Cyberhomes said 23 out of 48 Hawaii ZIP codes the company measured had posted growth in the combined median sales price for single-family homes and condominiums from the first to the second quarter.
“;There was something unique about these markets. Either they were more desirable, affordable or limited in inventory,”; Frame said. “;But, I wouldn't say that any of them are coming back because I don't believe that they've gone all the way down.”;
Harvey Shapiro, research economist for the Honolulu Board of Realtors, disagrees with Frame's theory that Hawaii's real estate market has not begun its descent. Shapiro said Honolulu has seen a decline in sales, but it hasn't been that drastic and the market is picking up.
“;I think (Oahu) is still at a healthy point,”; Shapiro said. “;It looks like we have hit bottom in the first quarter of the year and that we are on the upswing.”;
Best and Worst Hawaii Zip Codes
The latest quarterly data report from Cyberhomes.com shows wide variations for the combined sales median prices for single-family homes and condominiums by ZIP code.
| Top 5 Zip Codes | ||
| Zip Code | Region | Change from July '08 to July '09 |
| 96752 | Kekaha, Kauai | +80.72% |
| 96772 | Naalehu, Big Island | +38.89% |
| 96793 | Wailuku | +27.73% |
| 96741 | Kalaheo, Kauai | +27.28% |
| 96748 | Kaunakakai, Maui | +22.58% |
| Bottom 5 Zip Codes | ||
| 96737 | Ocean View, Big Island | -49.05% |
| 96790 | Kula, Maui | -42.40% |
| 96717 | Hauula, Big Island | -39.58% |
| 96785 | Volcano, Big Island | -39.04% |
| 96763 | Lanai City | -37.36% |
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Source: Cyberhomes.com
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