Are we there yet?

One of the first questions I receive when I meet people and they find out I am Realtor is, “Are we at the bottom yet?”.  My reply is always, “Well, if I could tell for sure, I would not be selling real estate.”  (Delivered with a big grin).  I just follow the numbers and try to make sense of them.  Recently, we have received good numbers in the form of national existing home sales numbers courtesy of the National Association of Realtors and the Case-Shiller index.  But, what about Hawaii?

Well, let us look at the numbers from October single-family home sales in the areas that I work in the most: Metro area of Honolulu, East Oahu, and the Windward side of the island.

1.  Metro Honolulu has seen a median sales price decline just in the past year of 8.2%.  Inventory of available homes has shrunk by 20% and most importantly the number of months of available inventory has fallen from 8.6 to just 4.4.

2.  East Oahu‘s ( includes Diamond Head, Kahala, Hawaii Loa Ridge, Aina Haina, Hawaii Kai, Portlock, and Koko Kai) median sales price decline has been 7.5%, but the available inventory has shrunk by almost 40% from October 2008 and now the number of months of available inventory is only 3.7 months down from a huge 14 months.

3.  Windward Oahu‘s ( includes Kailua, Lanikai, Kaneohe, Waimanalo) median sales price decline from last year was the smallest of these three at 6.6%.  Inventory has shrunk by about 29% and the number of months of available inventory is 5.6 down from over 9 months.

At under 6 months of available inventory, there is hardly room for the vast majority of listings to become stale on the market.  Buyers are having to move a little more quickly to get what they want.  All of this supports the median sales price which did see a slight increase from $600,000 to $605,000.  It is not much, but it is a start.  Some may say that it is a result of first time home buyer tax credits and this may be in part true, but these are the three most expensive areas on the island.  Finding something to get excited about under $800,000 is very challenging in these three regions.

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