Hawaii Real Estate

Thursday, May 17, 2012

New condos are a coming…

The coming condo boom?

The promise of an improved economy is driving plans for six — maybe seven — new residential towers

By Andrew Gomes

Late last year there was one. Now there are two. Soon there may be three or more developers unveiling high-rise condominium plans for Honolulu’s urban core. UP AND COMING As many as seven residential towers on six sites have been unveiled or are in the works within Honolulu’s urban core, which was ground zero for high-rise condo development during the last market boom in the early 2000s.

IN THE PACK:  Location: 605 Kapiolani Blvd. >> Status: Developer Franco Mola has an option to buy the property and is exploring plans for two condo towers on the site of the former Honolulu Advertiser, but has not filed an application with the state authority governing high-rise development in the area.

EARLY STARTER:  Location: 1189 Waimanu St. >> Status: Alexander & Baldwin Inc. launched sales efforts in December. The 340-unit tower called Waihonua could break ground later this year on the undeveloped site between existing Hawaiki and Koolani towers.

COMING SOON:  Location: 1555 Kapiolani Blvd. >> Status: Local developers MacNaughton Group and Kobayashi Group are working with a Texas company that owns the rights to build a 210-unit condo tower on top of the Nordstrom parking garage at Ala Moana Center. Sales efforts are slated to begin before the holiday season.

CLOSE SECOND:  Location: 850 Kapiolani Blvd. >> Status: San Diego development firm OliverMcMillan and local landowner Joe Nicolai submitted a permit application recently for a 400-unit tower called Symphony on this undeveloped site Ewa of Blaisdell Center. Construction could begin by the end of the year.

JUST PURCHASED:  Location: 2121 Kuhio Ave. >> Status: A California development firm recently bought this parcel. The site is on the Diamond Head-makai corner of Kuhio Avenue and Kalaimoku Street.

LINED UP:  Location: 604 Ala Moana Blvd. >> Status: Alexander & Baldwin Inc. has an option to buy this site formerly occupied by CompUSA. The company envisions building a tower here after it finishes another one on Waimanu Street slated to break ground by the end of this year.

Monday, December 12, 2011

Time to bring out the cranes?

One of the best economic indicators of a turn-around in real estate is when developers start to build!  The past month has marked the announcements of the new Waihonua project by Alexander and Bladwin which will be 345 condominium residences in Kakaako.  This is an interesting one as they will have to overcome the fact that there are sandwiched in between 5 other high rises as their neighbors!  More at:  http://www.waihonua.com

Another project is The Cove Waikiki.  Interestingly this project, too, is amongst some giant neighbors as it is essentially behind the Windsor building.  However, this one is a low-rise project:  http://www.thecovewaikiki.com

On the flip side of this, the new proposed Hale Ka Lae in Hawaii Kai has been halted and deposits cancelled due to slow sales:  http://www.staradvertiser.com/news/breaking/135068263.html?id=135068263

So we will see what the absorbtion rates are for these newer projects…

Thursday, August 25, 2011

21% of sales in Q2 were foreclosures?

Pacific Business News
Date: Thursday, August 25, 2011, 7:02am HST

Homes that were in some stage of the foreclosure process accounted for more than 21 percent of all residential sales in Hawaii during the second quarter, according to new data from RealtyTrac. 

There were 743 foreclosure sales in Hawaii between April 1 and June 30, which was a 4 percent increase compared to the same period in 2010, according to Irvine, Calif.-based RealtyTrac. 

Nationally, more than 31 percent of all residential home sales were in some stage of foreclosure, either with a notice of default, a notice of auction or bank-owned property. 

However, the total number of foreclosed homes sold in the United States — 265,087 — represented a drop of 11 percent from the second quarter in 2010, RealtyTrac said.

In Hawaii, more than 39 percent of all sales in Maui County during the second quarter were foreclosures. The 250 foreclosure sales on Maui, Lanai and Molokai represented an 8 percent increase from the second quarter in 2010.

Foreclosure sales on Kauai represented 33 percent of all sales. However, the number of sales, just 57, was a 26 percent drop from 77 sales during the second quarter of 2010.

The Big Island had 164 foreclosure sales in the second quarter, which was a 19 percent increase from 2010, and represented 27 percent of all residential sales.

The 272 foreclosure sales on Oahu represented 13 percent of all sales, and a 2 percent decline in number from last year.

Nationally, the average sales price of a bank-owned home or one in foreclosure was $164,217, which was a 1 percent decline from a year ago.

Hawaii’s average price was more than double that, the highest in the nation at $347,428. However, it was a 7 percent drop from $375,264 in the second quarter of 2010, according to RealtyTrac data.

Wednesday, June 01, 2011

Hawaii Business Magazine’s Top 100 Realtors

On May 27th, I was honored to be recognized as one of Hawaii Business Magazine’s Top 100 Realtors.  We have been fortunate enough to achieve this distinction every year since the awards inception.  Only 24 Realtors, of the more than 10,000 in the State of Hawai’i, have achieved this.

I want to extend a big “MAHALO” to all our clients and friends who have made this possible. 

- Trevor

Friday, May 06, 2011

Pacific Business New’s Top Real Estate Firms

Benn Pacific Group is honored to be named the 26th largest real state brokerage in Hawaii by sales volume according to Pacific Business News.

Tuesday, January 11, 2011

Outlook and rants for 2011

Aloha!  I apologize for the lapse in blogs.  It has been quite a hectic 4th quarter of 2010 and an exciting beginning to 2011. 

Let me start by sending a big MAHALO to all our loyal clients and friends who made 2010 one of the best years ever for our business despite the economic uncertainties!  I am equally grateful for our exceptional agents who continue to display their outstanding professionalism and steadfast duty to their clientele. 

As we begin the New Year one of my tasks is to re-examine the marketplace and try to position our clients to benefit from what we believe will be the long term movement of the real estate and financing markets.  This is one part art, and one part science.

That being said, one of the first observations that comes from the past month has been the marked upwards move in the stock market.  This, coupled with the large movement of investors out of the bond market, signifies an important change in consumer sentiment and likely means the end to the recession.  It also may signal the possibility of mortgage interest rates rising.  Without getting into details that would have the quants out there roast me… suffice it to say that there are forces at work that could push interest rates higher.  (Remember that interest rates have been artificially low for sometime from the stimulus, etc.)

So what does this mean?  In my opinion there is generally an inverse relationship between real estate prices and interest rates.  As interest rates rise, the Buyer’s buying power diminishes and they can afford to pay less for their purchase.  When this happens the Sellers must meet the Buyer’s expectation level by reducing their price. Couple this with a somewhat unknown amount of pending foreclosures or “shadow inventory,” as it is being widely referred to, and we are faced with another possible period of pricing pressure right?

Not so fast.  Here’s the rub if you live in my neck of the woods.  In case you didn’t know, Oahu is an island.  So, inventory is much more finite than other parts of the US and we have an organic need for housing units as the adult children finally move out of grandma and grandpa’s house!  We will never have the issues we are seeing in markets like Nevada or Florida, for example, simply due to our inability to find more developable dirt and our less mobile residents (i.e. we can’t get in a car and go to the next town where land is cheaper). 

But what does that really mean in plain English?  In my humble opinion we are in the middle of a flat line.  How do I know this?  Because if you look at median prices on Oahu for both condos and single family homes from 2006 and 2010, it is largely unchanged (which is to say the difference over that period is between 3-8 percent downward, which, to me, falls under the category of “who cares”).  So, what happened to the doom and gloom of the mainland?  The 20-40% price declines?  It really never came…unless you were buying condo-hotels in Waikiki (for which financing dried up) or homes on the Ewa Plain (for which foreclosures and short sales hit the hardest).

So enough already…tell me what to do?  If you are a Buyer…buy now.  You have extremely low interest rates historically so even if the market moves down a bit it’s not as significant as an interest rate hike.  AND, as I stated before, nothing is a better inflation hedge than a 30 year fixed mortgage at some ridiculously low rate.  If you are a Seller…sell now.  You can still get a very fair price on your property and upsize or downsize from there.  If you are an investor…well, here is where it gets interesting.  I think you have to buy prudently.  Rental yields are still pretty anemic so you have to look for distressed assets or other interesting low-hanging fruit.  Some of those very assets I mentioned in the previous paragraph as being hit the hardest are some of the best poised to recover back to the mean!

Aloha to all,
Trevor.

** Disclaimer:  These are the opinions of Trevor Benn and may or may not have any basis in reality.  You are advised to form your own opinions and seek advice from people smarter than Trevor.  No investment decisions should be made based solely on what you read here… one should always consult the oldest member of the village first.

*** Real disclaimer:  DISCLAIMER

Friday, October 15, 2010

Foreclosure Freeze

From http://www.msnbc.com:

From msnbc.com news services on 10-14-10

Lenders seized more US homes this summer than in any 3-month stretch since the housing market began to bust in 2006. But many of the foreclosures may be challenged in court later because of allegations that banks evicted people without reading the documents. A total of 288,345 properties were lost to foreclosure in the July-September quarter, according to data released Thursday by RealtyTrac, a foreclosure listing service. That’s up from nearly 270,000 in Q2, the previous high point in the firm’s records dating back to 2005.
Banks have seized more than 816,000 homes through the first 9 months of the year and had been on pace to seize 1.2 million by the end of 2010. But fewer are expected now that several major lenders have suspended foreclosures and sales of repossessed homes until they can sort out the foreclosure-documents mess. On Wednesday, officials in 50 states and the District of Columbia launched a joint investigation into the matter.

Rick Sharga, a senior vice president at RealtyTrac, noted that legal challenges to foreclosures are likely. But he doubts many will be successful in overturning foreclosures. He said he expects foreclosures to resume and predicts about 1 million homes will be taken back this year. “The bottom line is not that those properties won’t be repossessed,” Sharga said. “They simply won’t be repossessed as quickly. We’re simply delaying the inevitable.” Experts say if lenders resume foreclosures in a couple of months or so, the delay will amount to a temporary lull followed by a spike in home repossessions early next year.

But if the crisis drags on for months and more lenders stop seizing homes, the foreclosure delays could last well into next year. That could have a severe effect on home sales and prices. A freeze in foreclosure sales between now and December by a majority of lenders could amount to removing 30% of all home sales for that period, Sharga suggests. “You would virtually guarantee that tens of thousands of properties would miss going to market in time for the spring, which is the peak buying season for real estate,” Sharga said. Nearly 600,000 bank-owned homes are not yet on the market, according to RealtyTrac.

The states most affected by the foreclosure freeze accounted for 40% of all foreclosure activity in Q3 and 36% of homes taken back by lenders, the firm estimates. Sales of homes by lenders made up 18% of all US home sales in September, the firm said. Other experts say delays from the foreclosure documents problem won’t end up having a huge impact on home sales or housing values. Foreclosed homes that would have been sold by lenders now will be sold 7 or 8 months from now, and prices will start going declining about 3 to 4% nationally, on average, when those sales take place, said Andres Carbacho-Burgos, an economist at Moody’s. That’s good news if you’re a homeowner looking to sell in the near term, because there won’t be as much competition from deeply discounted foreclosed properties, Carbacho-Burgos said. “But if you were looking to sell further down the line, that’s not so good news,” he said. Economic woes, such as unemployment or reduced income, continue to be the main catalysts for foreclosures this year.

Yesterday, we reported on the 49 state probe.  Thankfully, Alabama has jumped on board and now all 50 states and DC have united to launch a combined investigation into the still growing foreclosure scandal. So far, JPMorgan Chase, Ally (GMAC Mortgage), Bank of America and Wells Fargo are the major players implicated in the investigation

Monday, September 27, 2010

What is Quantitative Easing?

Today’s entry is simply a look at a term…QE, or Quantitative Easing.  We keep hearing the financial whiz’s on TV speak of this process by our government so it led me to ask… What the hell does that mean?

In simple terms…once you get to the end of the rope on lowering interest rates (can’t go past zero percent of course) you are left with Quantitative Easing.  This is an action taken by a government to manipulate the monetary supply by crediting itself “extra” money or, in essence, they “print more money” (these days it’s just done electronically).  They then take those funds and buy government bonds, mortgage-backed securities, corporate bonds, etc.  This adds liquidity to those markets and takes those assets off the hands of the banks and turns them into cash for them to loan out to stimulate the economy…hopefully.  Unfortunately, so far banks have been hoarding cash to offset the massive defaults in their loan portfolios. 

What’s the opportunity here?  Well, the negative effect of increasing the monetary supply too much can be inflation or hyperinflation.  Right now we are deflationary so it seems unlikely in the short-term but if the long-term effect is inflation you would look to hedge against it with… real estate of course!  Wouldn’t you want a fixed 30 year mortgage at 4% when inflation hits?  Your payments are FIXED while your rental income is rising with the rise in goods and services.

Thursday, September 09, 2010

Change in Hawaii.

I was recently sent this video featuring Dick Gushman speaking about the major changes occurring in Hawaii right now in a very short period of time and some of the impact these changes will have.  Great video that I wanted to share as we all try to “look around the corner.”

Wakeup Keynote at the Recovery + Transformation program from Jay Fidell on Vimeo.

Wednesday, August 25, 2010

Price is the most important factor!

Realtors can assist in prepping your home, advise you on a selling and marketing strategy, walk you through the home selling process, help you avoid pitfalls, negotiate with your Buyer, and do a multitude of other services….but what we cannot do is control the market.  In an efficient market the value of an asset is what someone is willing to pay for it and any point in time.  Despite all we do, pricing remains the biggest driver for why properties sell or don’t sell.  Here’s a cut and paste of a recent article on pricing:

By J.W. Elphinstone AP Real Estate Writer | Posted: Sunday, August 15, 2010 12:00 am

NEW YORK (AP) - The good news for sellers: Your house will sell. The bad? Only if the price is just right.

That could mean biting down hard and slashing tens of thousands from your ideal listing price if you’re serious about selling. And you should be prepared to get even less than that.

The recently expired tax credits for homebuyers gave sellers a boost. Home sales surged and values edged up. The worst appeared to be behind us. But since the deadline passed at the end of April, housing has faltered. Job insecurity, tight credit and consumer confidence are undermining a sustained recovery, despite the lowest mortgage rates in decades.

In June, sales of previously occupied homes fell 5.1 percent, while new home sales posted the second-weakest month on record. And many economists expect prices to decline another 2 percent to 10 percent followed by “a long, flat bottom,” said Stan Humphries, chief economist at real estate website Zillow.com.

That means sellers must set their price with precision or risk languishing on the market.

Here’s the disconnect facing sellers: The vast majority of sellers believe their homes are worth more than what their real estate agent recommends, according to HomeGain.com. At the same time, most buyers think for-sale homes are overpriced.

So how do you find the sweet spot?

Analyze your market first. Determine how many houses similar to yours are up for sale. Consider neighborhood, school district, size and price point. The more homes there are, the more it becomes necessary to list at the lower end.

“I want buyers to ask why is this house priced so competitively,” said Ron Phipps of Phipps Realty in Warwick, R.I. “I want the answer to be an offer.”

Foreclosures and short sales, where the owner sells for less than what’s owned on the property, complicate matters. Be honest. Are the foreclosures or short sales in your market a reasonable alternative a buyer would consider? Some won’t be because they are in disrepair. But others, especially short sales, are often in good condition and can be priced 15 percent to 25 percent below a comparable home.

So you’ve got the right price, or a price low enough to attract bids. Don’t be disappointed when an offer comes in below the listing price. And don’t send back a token counteroffer that’s only a few thousand dollars below what you want.

“Buyers are not interested in back-and-forth negotiations these days,” Phipps said. “They are less emotional and more disciplined. They will walk away.”

If no one shows up for an open house, if no one calls and if there are no offers, then the price is too high. That means it’s time to make a meaningful price cut. You won’t be alone. Almost a quarter of all listings on the market at the beginning of July had at least one price reduction. The average discount from the original listing price? Ten percent, according to Trulia.com.

And cut with a machete and not a butter knife. Too many dinky reductions become a scarlet letter on your front lawn and would-be buyers will think you’re not serious.

Sellers are always chasing falling prices, said Jonathan Miller, president and chief executive of real estate appraisal and consulting firm Miller Samuel Inc.

But there’s a challenge. “They want to sell for more than what they owe or they want to get the money they put into the house,” he said. “The market couldn’t care less about your personal situation.”