Hawaii Real Estate Daily

It might be hard to persuade anyone that there is a national housing meltdown when the Multiple Listing Service offers deals on Maui like this:

“Two bedroom, 1 bath older home on a small lot that is zoned industrial - access to property is by footpath only. Being sold as-is - fixer upper. $200,000.”

The aggregate statistics for the third-quarter of 2008 released by the Realtors Association of Maui on Thursday also do not portray a cratering housing market.

True, the number of transactions for the first nine months of the year is down by about one quarter, but prices received for houses and condominiums that do sell are holding up.

For single-family houses, the median price this year is $594,500. That is down $44,000 from last year, but is only a 7 percent decline, compared to hard-hit areas of the Mainland where prices are down 15 percent, 20 percent and in some neighborhoods much more.

Average prices for single-family properties are down by the same percentage, but since Maui’s average was so high last year, $945,000, the fall as measured in dollars is $70,000, down to $876,615.

Condos averaged $783,000 last year and are up 21 percent to $947,000 this year, but thousands of Maui condos are not in the million-dollar class.

The biggest concentration of middle-class condos is in Kihei, where the average is up 9 percent this year to $493,000.

The median for condo units, the point where half sold for more, half for less, is up 7 percent, to $570,000 countywide, although only 5 percent to $415,000 in Kihei.

The most expensive condos are in Wailea-Makena, averaging $2,184,013 this year, which is up an impressive 37 percent, but that may reflect the late recording of sales contracts that were inked for new construction years ago.

Still, there is little sign that the South Maui luxury condo market is swooning. The number closing this year is 160, only 16 fewer than in the first three quarters of 2007.

As a resort, Wailea is an outlier, commanding room rates almost a third higher than any other luxury resort in the state. It may be an outlier in luxury condominiums as well.

The average condo sales price in Kaanapali this year is off 18 percent to $1,164,364, and the average in Kapalua is down 30 percent to $1,070,794.

In Kaanapali, the number of closings has fallen from 45 to 33, and at Kapalua from 27 to 17.

Lanai is also a market unto itself, where there were only two transactions, but for nearly $2 million on average.

Although prices received are waffling around what sellers received last year (which was down from 2006), the smaller number of transactions means the aggregate value of the turnovers is well down.

The total of condo transactions this year (672 closings compared with 916 at this point last year) is down by $80 million to $637 million.

The number of single-family closings is down from 893 a year ago to 706, and the aggregate transactions are off $226 million to $619 million.

Notice that the number of single-family closings topped the number of condo closings. That is a dramatic change from any year before 2006. when the number of condo sales was often nearly double the number of single-family sales.

The number of days on market is also down sharply from last year. In 2007, it ranged between 74 and 131 for single-family and between 73 and 115 days for condos.

This year, the wait has been between 57 and 95 days for house sellers, 48 and 95 days for condo sellers.

Terry Tolman, the chief staff executive of the association, said that the drop in days on market shows that “properties priced right will sell in a reasonable time frame.”

He also noted that the number of active listings “has grown considerably in the last 12 months,” though the rise has leveled off recently.

Active condo listings this month are up to 1,600, compared with 1,283 in October 2007. Active single-family listings are 1,114, up from 1,016 a year before.

Tolman said median prices in September were down across the board, which might be because buyers are now not able to qualify for as much or because sellers are willing to accept lower offers.

Credits: Maui News

The state Board of Education passed one of the deepest budget cuts in recent memory after hearing last-ditch pleas to save school programs and positions from the chopping block.

Board members last night struggled to agree on a $46.5 million budget reduction plan that falls well short of the $69 million mandated by Gov. Linda Lingle.

Board Chairwoman Donna Ikeda warned last night that by sending the governor a budget reduction plan short of the mandate that the governor and the state Legislature could cut into the schools.

“If the governor decides to take the ($69 million) cut, the money is coming out of the schools,” Ikeda said.

“That is something I will fight against. It is something that is going to affect all students … and it will be devastating.”

The board voted 11-1 to approve a budget reduction plan that eliminates about 240 state and district positions, including physical therapists to resource teachers to speech pathologists. Included in the cuts was money for athletic supplies and equipment, alternative learning centers and science textbooks.

Following pleas from educators and students, the board also reinstated cuts to several programs for at-risk youth, the Peer Education Program and funding for the Pacific and Asian Affairs Council.

The earliest the cuts could take effect is July 1, 2009.

Before the vote, dozens of educators, students and others expressed discontent with proposed budget cuts that could affect everything from state resource teachers to special education, from public charter schools to high school athletics. It was the second round of such testimony this week.

As board members heard testimony, they asked those who were addressing the board to explain possible adverse impacts of the cut they are concerned about.

But board members made no promises, and said cuts must be made.

“Any cutting that takes place should be as far away from the classroom as possible,” Roger Takabayashi, head of the Hawai’i State Teachers Association, told board members.

While BOE members deliberated on the budget cuts in the McKinley High School auditorium late into the evening, they acknowledged that a decision needed to be made to meet today’s deadline set by Lingle.

Tight schedule

Board members have been working under a tight schedule, meeting in a committee hearing Monday that lasted some 7› hours. That was the first time the BOE had discussed the budget reduction plan that the state Department of Education first released on Sept. 24.

High school students made impassioned pleas to save the Peer Education Program, which operates in about 25 schools across the state.

In the end the board decided against cutting $1 million to eliminate the program, which teaches students to help other students deal with health and social problems. Instead, the board decided to only cut 10 percent of the funding for that program.

Mark Shimabukuro, the peer education coordinator at ‘Aiea High School, said peer education is vital to the health and safety of students. “Unfortunately, today’s kids are making more and more risky choices,” he told BOE members. “The first thing I tell students is this is the most powerful program you will be involved with. I tell them, the choices you make are going to determine the rest of your life.”

Board member Mary Cochran said that the peer education program could still be funded through each school’s individual “weighted student formula” funding. “Cuts have to be made, unfortunately,” Cochran said. “But really, the peer education program is one that should be saved.”

The last time the DOE was asked to reduce its budget was in the mid-1990s when the state faced a $350 million shortfall. In total, the DOE suffered $24 million in cuts.

The proposed cuts make up slightly less than $46.5 million. That’s 15 percent of the DOE’s discretionary budget, but well short of the $69 million in cuts for a worst-case-scenario budget plan that Lingle asked the DOE to create because of the state’s declining tax revenues.

Loss of 244 positions

The DOE budget reduction plan includes cuts of 244 positions in state and district offices, but largely preserves school-level programs and staff.

The cuts are part of a request by Lingle that all state agencies come up with 10 percent, 15 percent and 20 percent budget-cut scenarios for their 2009-11 discretionary budget because the slowing economy has eroded state tax revenue.

The DOE already had cut about $20 million from its budget, including a $10.2 million cut by lawmakers in this year’s Legislature. The BOE recently approved

$9.3 million in budget cuts to meet 4 percent across-the-board reductions imposed by Lingle.

Natasha Chapel, the high school program director of the Pacific and Asian Affairs Council, testified in support of the program, which helps about 1,500 students a year. The organization offers a wide spectrum of classes and programs, from those for at-risk youth to students seeking college preparation.

Chapel said if the DOE cuts its roughly $47,000 in funding that the program risks losing an additional $300,000 or so that it receives through private sources.

Included in the budget cuts is some $3 million for teacher recruitment and retention programs. The cut would affect about 36 resource teachers who administer programs such as alternative teacher training, educational assistance and professional development, or who work with special education teachers.

According to the plan, the reduction could greatly hurt the DOE’s ability to comply with the state’s Reinventing Education Act and the state’s ability to meet federal requirements to reduce the number of nonhighly qualified teachers in the classroom.

Special Olympics

Also last night, the board reinstated some $119,000 for Special Olympics funding that had been previously cut from the DOE budget last month.

“This contract provides integral services to our special populations,” said board member Breene Harimoto.

Jasmine Fujiwara, a state resource teacher speaking on behalf of the 36 teachers, warned that the programs would be nearly eliminated.

“We are appalled that 90 — that’s nine-zero — percent of our section is being cut,” Fujiwara said.

“We risk falling out of compliance with both the Felix lawsuit (federal consent decree) and No Child Left Behind.”

The reduction also could hurt the DOE’s ability to coordinate professional development programs to increase student performance in reading, math, science and social studies.

Despite a failed attempt to cut the public school athletics’ budget in August, the DOE plans to cut about $800,000 for athletic equipment, supplies and transportation from the budget. League directors across the state collaborated to figure out areas within the budget that could be trimmed, education officials said.

Also included in the budget reduction plan are:

• About $2 million in science textbooks and learning materials.

• About $643,000 in cuts at nine alternative learning centers across the state, which help to educate at-risk students.

• About $1.6 million for speech pathologists, occupational therapists and physical therapists.

Credits: Honolulu Advertiser

House Price/Sales Data

Home Sales Hold Fast In Payette County. Idaho: “Median home prices in Payette County are at a manageable level for buyers. So far a total of 105 homes have been sold in Payette County during 2008 with the average, or median price, being $142,000 with prices in the area ranging between $120,000 and $160,000. Compare that to Ada County and Canyon County where the median home price is almost $250,000.”

Maui Home Sales And Prices Fall.  Hawaii: “Realtors Association of Maui: Sales of single-family homes fell to 65 in September, nine less than the same month a year ago… even though the median price dropped to $535,000 last month, $51,000 less than in September 2007. Maui’s slumping home prices follow similar sales on Oahu, where prices fell to the lowest point in more than 3 years, as well as on the Big Island and Kauai, where fewer homes sold despite a 20% drop in prices… Condo sales dropped 42.8% to 48 last month, the lowest level in five years, despite a median price decline to $388,500.”

Bend Home Sales Up In September. Oregon: “Bratton Appraisal Group: Bend’s housing market showed a positive sign in September when the number of single-family home sales rose to the highest level in more than a year… Seventy-six of the 120 homes sold last month in Bend, or 63%, were priced below $300,000. Median sales price per square foot… dropped from $157 in August to $139 in September in Bend, the city’s lowest level since April 2005. The city’s median sales price, meanwhile, dropped slightly to $276,000 in September, down from $283,000 in August. A year ago, the median price was $332,000 in Bend in September 2007.”

Economic Woes Hit Home. “Greater Las Vegas Association of Realtors: Realtors sold 2,783 single-family homes in September, compared with 2,545 sales in August and 990 in the same month a year ago. Sales of condos and townhomes increased 81.2% from a year ago to 386 in September. The inventory of homes on the Multiple Listing Service remained steady at 22,784 in September, compared with 22,710 in August. It’s down 5.9% from 24,218 in September 2007. The median single-home price slipped 7.1% to $195,000 in September, down 31.8% [y/o/y]…. Condos and townhomes were down 2.9 percent to $119,450.”

Home Sales Up 38%, Values Mixed. Florida: “The Orlando Regional Realtor Association reported a 38% increase in existing home sales in September, but a continued decline in home values. Members of the Realtor Association were involved in 1,335 home resales last month, compared to 970 during the same period last year. September’s median home sales price of $210,000 was 10.6% below September 2007’s $235,000, but 5% up from August 2008’s $200,000… Other Orlando market positives include month-over-month increases in the number of new contracts and in the number of pending sales, considered by housing economists to be a reliable predictor of future sales activity.”

Region’s Home Sales Rose In September. “Pikes Peak Association of Realtors: Single-family home sales in Colorado Springs in September rose 5.6% when compared with September 2007. The first year-over-year gain in monthly home sales since May 2006… September sales of existing homes… jumped 9.6% when compared with September 2007… For the first nine months of the year, however, combined sales of new and existing homes declined 15.9% when compared with the same period last year. The supply of homes for sale in September, meanwhile, dropped 10.8% compared with a year ago… The median price of homes sold in September fell to $200,000, a 4.8% drop when compared with September 2007.”

Area Housing Market Down In Third Quarter. “Central Penn Multi-List and the Greater Harrisburg Association of Realtors: The median home-sale price in Central Pennsylvania was down 3% during Q3’08. The median price of residential homes was at $168,000… compared to $173,000 in Q3’07… The number of residential housing units sold in Q3 also dropped 12%— from 2,411 units sold last year to 2,127 this year. Q3’08 listings stayed on the market an average of 70 days, up from an average of 57 days in 2007… While the median sale price declined, the average sales price went up, increasing to $194,074 — up from $182,028 for Q1’08.”

Pending Home Sales Surge. “National Association of Realtors: Pending home sales activity surged in August… The Pending Home Sales Index, a forward-looking indicator based on contracts signed in August, jumped 7.4% from July to August, and stood 8.8% higher this August compared to August 2007.  The index is, in fact, at the highest level since June 2007. Home sales are considered pending when the seller has accepted an offer, but the deal has not closed. Generally there is a one- to two-month lag before a sale is completed.”

Fort Myers-Area Home Sales Up. “Realtor Association of Greater Fort Myers and the Beach, Florida single-family homes sales in September climbed 4% to 756 from August’s 729. That’s about three times the number of sales for the same period last year of 275 homes… September’s median sales price slipped another 6% from August to $126,250. That’s 42% lower than a year ago at $218,000.”

NAR: Home Prices To Drop 8.3% In ‘08. “NAR: Sales of U.S. resale homes are projected to fall 10.9% this year compared to 2007, with the median price dropping 8.3%… Back in January, the group predicted that sales of resale homes would rise slightly this year and that prices would hold steady compared to 2007. The sales projection has actually been revised upward since the group’s previous forecast, released last month, which anticipated an 11.4% year-over-year drop in sales. NAR’s previous forecast called for the median price of resale homes to fall 7% this year, which is less than the drop anticipated in the [current] forecast.”

Home Asking Prices Fall: September Report. “Real estate research company Altos Research LLC: Asking prices for homes across the country fell 1.4% in September, bringing the total drop in the last three-month cycle to 2.9%… September findings of Altos’ 10-city composite listing price index… are based on market conditions in 26 major U.S. metropolitan statistical areas including - among many others - Boston, Cleveland, Dallas, Los Angeles, Miami, New York, Seattle and Washington, D.C. The Real-Time Housing Market Report, a joint publication between Altos and market analysis firm Real IQ, showed asking prices fell in 21 of these 26 metropolitan markets.”

Credits: Seeking Alpha