Are We at the Bottom?

Many see the housing market as the key to economic recovery but acknowledge that until its pereceived that the market has hit bottom, many would-be buyers will sit on the sidelines. A March 24 Good Morning America (GMA) segment suggests that maybe we're there. GMA reported on a influx of foreign and domestic "professional buyers" (investors who buy homes--sometimes in bulk and sight unseen--at bargain prices to later sell at a profit). Their presence typically signals the market bottom, or near to it, and thus the beginning of a recovery.  (From the National Association of Realtors April news update) And in Hawaii we are starting to see the number of sales (mainly on Oahu)  start to pick up, which is our first indicator of the market.  Short sales have slowed and most foreclosures appear complete (now are bank owned)  – but there is still lingering pressures due to unemployment and softness in the tourism and other business markets.  The military, as always, is a strong presence in Hawaii; and with the current prices and rates (prices are flat and rates are low), providing many opportunities for our military to buy homes in Hawaii that even six months ago were out of reach.  Talk to our military lender, retired Chief Allen Blackard or one of our excellent, experienced agents so we can help you buy your piece of paradise!!  Or search the Oahu MLS, all  properties listed  by Oahu’s real estate companies.

Kate Braden, R, PB, ePRO, ABR
CEO &  Principal Broker
Cell/Direct:         (808 )265-6803
Toll Free Fax:     (888) 830-0153
Toll Free Office: (877) 997-9888X108
Email:  Kate@HREOmail.com 
Webs:  HawaiiRealEstateOnline.= com

Well the statistics have been published and the headlines are screaming that the “median” price of Oahu single family homes is $555,000.  But what does median mean.  Bank of Hawaii’s Chief economist advisor says that perhaps our use of the median (half the prices are above and half below) may not be a good reflection of Hawaii’s market or even Oahu’s, as we have such differing price ranges by neighborhoods.

Kate Braden, R, PB, ePRO, ABR
CEO &  Principal Broker
Cell/Direct:          (808 )265-6803
Toll Free Fax:       (888) 830-0153
Toll Free Office:   (877) 997-9888X108
Email:  Kate@HREOmail.com 
Webs:  HawaiiRealEstateOnline.com

Wanting your first home but afraid of the market?  Now is the time to buy while rates are cheap, prices are low and Congress wants to give you money for buying your first home!!

Read the following article and for more information check out HawaiiRealEstateOnline.com!! or OnlineHawaiiProperties!!
 
"Housing could get a big boost from the latest addition to the mammoth stimulus bill working its way through Congress.

Senate legislators unanimously approved a proposal Wednesday that would allow a tax credit for home buyers of 10 percent of the value of new or existing residences, up to a $15,000 limit. Current law provides for a $7,500 tax break but only for first-time homebuyers.

"It is time to fix housing first," said Sen. Johnny Isakson, R-G.

Isakson's office said the proposal would cost the government an estimated $19 billion. In all, the stimulus is now topping an estimated $920 billion.

In an op-ed that appears in Thursday’s Washington Post, President Barack Obama painted a dire picture if Congress fails to move quickly to pass the stimulus bill.

"This recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse," Obama wrote in the op-ed titled, "The Action Americans Need."

Source: The Associated Press, David Espo (02/05/09)"

From two weeks ago....

Once long ago when I was having one of my testy days, my son emailed me a picture of Malaekahana Beach and said, "Mom, go to your happy place."  Today I'm in my happy place.  We came up last night and slept to the sounds of the ocean.  At  6am we arose with the sun coming in over the ocean on a mostly deserted curve of probably (or at least in my opinion) the most beautiful beach in Hawaii.

Quick, quick we took a walk along the shore looking for shells and beach glass before the sun was too high in the sky. A lovely mixture of silver curves of water reflecting the sky and rolling surf.  There were only six people on the whole beach.  The tide was fairly low but alas no luck this morning.  Later we'll go snorkling and look in the nooks and crannies for shells and whatever fish we can see (sometimes the Honu - sea turtles - come to visit).

I brought up my watercolors so until the rest of the gang comes up I'll be painting.  I will return Sunday renewed and ready to help you find your home in Hawaii.  Bobby got his spam musubi and is our premium shell diver.  He' wants my french easel for plein aire painting added to his Christmas list.  Chuckker and Shirley will be fishing.  We are here to relax and renew our hanai family relationships.  Mahalo tyo Tim/Tom and Janice for sharing this lovely place with us all these years.

See you on Sunday!

Aloha,  Every morning I get up and drink my oolong tea from China while looking at a view that is beyond beautiful.  It's georgeous even in the rain - the waterfalls off the Koolaus are spectacular!!

The current market on Oahu is falling, rising, slow, fast, stopped, and accelerating!  As always with real estate, the market is local,local,local.  And in Hawaii, especially on Oahu, each neighborhood and area within the broader neighborhood can be a separate "market".  We are also unique in that we always have demand.

So prices are "falling" in Ewa Beach where there is a glut of inventory from all the people buying entry level homes at lesser prices (because you have to deal with the traffic) who thought they'd be able to sell and get equity out in three years and then the market returned to the normal 5 year pattern.   Whereas prices are "rising" in nearby Ko' Olina with the upcoming resort construction in the area and further development of the second city of Kapolei.

Homes that are priced at market value in any neighborhood are taking longer to sell (but actually a normal amount of time - too many people got used to the rah-rah past five years) while if you are priced just under and have percieved immediate equity, your property can move very quickly.

Prices for the fixer uppers in Coconut Grove in Kailua are back to a more realistic $500-$600,000 while closer to the beach the $2 million to $25 million homes continue to sell at a regular pace.  On Oahu, the constraints to the market are in the mid-range market (under 1 million) and are mainly due to the credit crunch.  Many buyers who could qualify even a month ago no longer can.  So now listors are insisting on pre-approval letters from lenders to be submitted with offers, not just vague pre-qualification letters.

So how's the market on Oahu?  Great for buyers - it's your market now and sellers are offering concessions and willing to negotiate.  For sellers, it's still a great time to sell and get that equity working for you - you still have five years of incredible value appreciation in your home. 

First step in buying on Oahu is to become familiar with the neighborhood in which you want to live and the second is get pre-approved so you know what you have to work with.  Check out Buyers-Hints here.


Here's my morning view:


 

Aloha,

Thanks to Title Guaranty for the following compilation of current property tax rates in Hawaii - click here!

1. If the lease has less than thirty-five years remaining, you will not be able to get a conventional 30 year mortgage. In addition, there are restrictions on loans and terms depending on type and size of the unit, lease terms, and any additional landowner conditions.
2. There is no guarantee that the lease will be renegotiated nor what the new lease amount will be. Some newer leases have step up amounts defined in the renegotiation process; some do not.
3. It may be cheaper up front, but more expensive in the long run as you are basically paying the landowner to build his equity not yours. If the cost of your mortgage less the tax benefits and plus the lease payments are less than what you would pay for rent, then this scenario might work for you.

More things your Realtor® can do for you!! If you're selling we can compile this information for you to help you price your property to sell in the time period you need. If you are buying, we can arm you with this and other market information to know what your offer should be. Live Help on your Real Estate Needs at 808.265.6803!

REALTOR® Magazine-Daily News-Absorption Rate Key to Successful Pricing

Daily Real Estate News

Only pricing the listing right will do that, said Monroe, whose comic presentation style had the audience in stitches. And the right price depends in large part on the current absorption rate in your market.

Here's how you find that:● First, determine the number of homes closed in your market over a specific period - say, 12 months. You can get this data from the MLS.

● Next, divide the number of homes by the number of months in the period - in this case, 12.

This calculation gives a per month absorption rate.

● Last, divide the rate into the number of current listings. This yields the months' supply of homes.

Six months' supply is considered a balanced market - when the number of listings roughly equals the number of buyers, says Monroe. Numbers over six represent a buyers' market and those below a sellers' market.

To assess sales trends, you can also calculate supply over shorter six- and three-month periods. "Price in real estate is mostly a matter of supply and demand, just like in every other industry," said Monroe.

Once you have these basic calculations down pat, you can focus on absorption in particular neighborhoods or price ranges, says Monroe. Showing clients local absorption rates will give sellers the information they need to price their homes to sell. "Once they've arrived at a price, you can decide whether you want to spend your marketing dollars selling it," says Monroe. If they don't price it realistically, he concluded, then seriously consider taking a pass on the listing.

Monroe also explained how to calculate the odds of selling any one home. "Even in a hot market, it's rare for more than 50 percent of homes to sell," he said. To make this calculation:● Search the MLS to determine how many transactions have closed in the last six months.

● Divide that number by the number of new listing that came onto the market during the same six months. (Don't include listings that expired and then were relisted.)

This equation gives you the percentage of homes entering the market that actually sold. For example, if 100 homes sold and 200 were listed, the odds of selling are 50 percent.- REALTOR® Magazine Onlinehttp://www.realtor.org/RMODaily.nsf/pages/News2007111404

The purchase of real estate is usually the largest financial transaction you will ever be involved in. It involves legal contracts, bank mortgages, return on investment, home inspections, financial appraisals and a myriad of other complicated processes and jargon. Did you know that before the early 1980's buyers were never represented? Sellers had agents to list their properties and negotiate the contract with all the expertise of professional Realtors and buyers were at a disadvantage in every transaction. From that imbalance evolved the Buyer's Representative or the Buyer's agent.

I am an Accredited Buyers Representative (ABR, an accreditation approved by the National Board of Realtors) with the extra resources to support both the buyer and seller through a smooth and legal transfer of title to the new owner. For sellers, I know what buyers are looking for, what attracts them and what kinds of financing is risky and should be avoided. For Buyers, I have specific expertise to find the right property for you, negoptiate the best deal, and even help you find the right fianancing! We know sellers are represented by professional Realtors, why wouldn't you want to be represented?

Without getting too deep into what agency is, any listing on the Realtors' multiple listing service (MLS) tells you the seller is represented by a professional Realtor. The Realtor has signed an exclusive listing agreement with the Seller and has the fiduciary (another big word that means all the financial and negotiating responsibility) duty to put the Sellers' interests first at all times. The Seller negotiates with their agent as to what commission they will pay and the agent decides with the seller's consent, how much of that commission will be offered to the agent that brings in a buyer (the cooperating broker commission).

Point number one: As a buyer, a buyers representative's (or buyer's agent's) expertise and services usually don't cost the Buyer anything (unless the Seller is paying a rediculously low co-op and then you'd make up the difference of what your agent and you had agreed upon).

When you go to open houses you are dealing with the Seller's agent or their representative. In Hawaii, open houses are still a good way (but not the best) to market a property. Seller's put the sign up and hold open houses to secure more listings in that area. That's their goal and since that's what we do for a living, absolutely nothing wrong with that goal. The agents sitting the open house (unless it is a high end property the listing agent usually doesn't sit the open) are usually less experienced agents from the sellers' agent's office (agency). They are their looking for buyers to represent. If they are any good, they'll have other properties available to show you similar to this one if this one is not specific to your needs. Once again, smart move on their part.

But how about if you like this house and want to make an offer? At worst you are dealing with the Seller's agent whose total responsibility is to the Seller - they've signed the agreement that way. If they write up the contract for you, they must get the Seller's permission to be a dual agent and will treat you as a customer (responsible for fair and honest treatment but not necesarily to put your financial interests before those of the sellers') while the Seller is a client with the full fuduciary responsibility and protection of the original contract with the Realtor. You will at least have someone write up the (very complicated, and new in Hawaii as of June 2007, Purchase Contract) for you but you are not equally represented, and in some cases not represented at all in this transaction.

At best, the Seller's agent would turn you over to another agent in the Agent's office (or to the other agent who sat the open), and even if you sign an exclusive buyers agreement with that agent, you are in a dual agency situation where your agent must consider equally your and the seller's position. In neither case, is it likely that you will get a through market analysis of the properties in that area in order to make an informed decision as to what price you should offer (the list price is seldom the price that you should offer), nor someone to negotiate that price, the conditions and terms of the contract, and the myriad of other parts of the transaction in your favor.

Point number two: Don't get an agent by default. You may only be partially represented and at worst not represented at all. You will not get a lesser price by bypassing representation, the Seller knows the bottom price they are willing to accept and your bypassing knowledgeable representation only puts you at risk.

Assess and select the best agent to fully represent you and your interests before you start looking at properties. This is what I do for a living and I want to bring all my expertise and market knowledge to bear in one of the most important transactions in your life!!

Point number three: If I agree to represent you in a transaction involving a listing listed by my agency, I will insist that you sign an exclusive Buyer's Representation form so that I may properly represent you. I seldom agree to do this, and only for agents for whom I have the utmost respect. If you are already a client of mine (having already signed the Agreement), I will fully inform you of any conditions it imposes on my representation and refer you to another agent outside our office if you are not comfortable with my abilities to serve you. (So far, I've never had to do this as most of my clients are satisfied with my abilities to serve them beyond their expectations)

But market analysis for the price to offer, neighborhood knowledge to meet your criteria, process expertise to smoothly sail you through a transaction set up to protect your best interests are not the only considerations. What if you are driving around or looking in the newspaper for open houses and you come accross a FSBO (for sale by owner).

The seller may or may not have the expertise to close the transaction and transfer title to you successfully. Is the seller prepared to open escrow? Does he understatnd the Purchase Contract? Do You? If he is not using the Realtor's Purchase Contract (scrutinized and approved by all the legal beagles and the Honolulu and National Association of Realtors) What kind of contract is he using? Does he have a way to transfer the title to the property cleanly? (Without a clean registration of the title transfer in either the Regular or Land Court or both, you do not own the property no matter how much money has been exchanged). Worst case scenario - nobody is represented and all sorts of legal red flags are flying!

Point number four: If I represent you and you fall in love with a FSBO, I will inform you if you will have to pay my commission in order for me to represent you in the transaction. FSBOs sometimes offer cooperating broker fees and sometimes they do not. It is more work, as the seller doesn't have an agent to manage their side of the transaction, but if you are my client (with a signed agreement) and not just a customer (no agreement), my job is to find you the home of your dreams and close your successful transaction!

So use the internet to refine your search for a property, learn about the neighborhoods, and develop your criteria; but before you go - select an Accredited Buyer's Representative to be your agent. Going it alone or flitting from agent to agent only increases your risk of not getting what you want - a new home that meets all your needs.

Sign up at www.katebraden.com or http://bestoahurealestate.com and let me show you what I can do for you!