Coldwell Banker Pacific Properties is planning to reduce current asking prices on home listings starting Friday as part of a first-ever, nationwide event designed to stimulate the real estate market.

Nearly 100 homes, which represent about 15 percent of Coldwell Banker Pacific Properties’ listings on Oahu, will be reduced from 5 to 20 percent from Friday to Oct. 19.

The move is part of an initiative to jumpstart the local and national real estate market.

Oahu’s home sales slumped last month, according to statistics from the Honolulu Board of Realtors, even as median prices dropped to $590,000, its lowest point in 31/2 years.

“We felt this was perfect timing,” said Chason Ishii, president of Coldwell Banker Pacific Properties. “It’s our hope that the Coldwell Banker 10 Day Sales Event will move buyers off the sidelines and into the market.”

Ishii said due to higher inventory, historic low interest rates and declining list prices, this is a great time to buy a home on Oahu. First-time homebuyers also have the added incentive of a $7,500 tax credit due to recent legislation.

Oahu homes participating cover a broad range of neighborhoods and property types.

For instance, a two-story Wilhelmina Rise home, previously listed at $1.1 million, will participate in the event at a price of $990,000. A 4-bedroom Makakilo home, previously listed at $635,000, will participate in the event at a price of $604,000.

In total, the estimated list price reductions will amount to more than $4 million, Coldwell Banker estimates.

During the local sales event, participating agents will also collect donations for the Institute for Human Services, a nonprofit that runs homeless shelters and programs.

In a recent survey of 3,379 Coldwell Banker real estate professionals across the nation, 56 percent said listing prices in their market remain above where they need to be to attract qualified buyers.

The survey also found: 77 percent agreed the majority of sellers in their market still have unrealistic expectations regarding the initial listing price for their homes; 79 percent agreed appropriately priced homes in their market are attracting more buyers and moving more quickly; 76 percent feel that a 10 percent or less reduction in listing prices in their area is all it will take to help push these homes over the “tipping point” to a sale.

Credits: Star Bulletin

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Hawaii’s real estate sales and lending community took interest yesterday in a drop in interest rates and the news that Fed Chairman Ben Bernanke had hinted about further cuts.

Bernanke said in a prepared speech yesterday that, “The Federal Reserve will need to consider whether the current stance of policy remains appropriate.”

If the Fed approves a rate cut on or before its next central bank meeting on Oct. 28-29, such a move could spur real estate activity in Hawaii’s wobbly market, Hawaii real estate and mortgage industry professionals said. Still, given the current credit crunch and historically low consumer confidence rate, it’s hard to gage how much influence a drop could have on the beleaguered market, they said.

Hawaii borrowers reacted yesterday when mortgage rates fell to 5.5 percent and will continue to react positively if they cycle lower, said Rusty Rasmussen, vice president for Castle & Cooke Mortgage.

“We had some bad news and some good news yesterday,” Rasmussen said. “The stock market lost another several hundred points, but the good news is that interest rates went down.”

Rasmussen said he expects a pick up in business as a result of favorable interest rates and the Building Industry Association’s Parade of Homes this weekend.

“It’s gets people thinking about homes,” he said. “And, they’ll want to take advantage of dropping interest rates because the difference in their loan payment could be huge.”

Given the current economic woes, Rasmussen said that he would not be surprised if rates dropped to 5 percent in the next few months.

“This is an historic time, it’s never been this bad,” he said.

Donald Lau, president of the Hawaii Mortgage Brokers Association, said Rasmussen’s projection is not out of line. If drop of this magnitude were to occur it would do much to inspire consumer confidence, Lau said.

“It would greatly alleviate consumer fears,” he said. “Rates are good now, but people aren’t moving. Another drop would get them out circulating their money around.”

Lowered interest rates were a major catalyst during Hawaii’s last real estate boom, said Harvey Shapiro, real estate economist for the Honolulu Board of Realtors.

Interest rates started declining in 2000 and bottomed out in 2003 at a 40-year-low, he said.

“The Treasury index went down to 1 percent in 2003,” Shapiro said. “Cheap money was probably the driving factor for many people who bought real estate.”

The market has been more volatile recently, he said. Last week the Treasury Index fell to 1.59 percent from 1.95 percent the week before, he said.

While a drop in the Treasury Index rate would help widen credit options to Hawaii homeowners and investors, not everyone will be able to get relief, said Stephany Sofos, a Honolulu-based real estate analyst and small business owner.

“There’s a credit crunch and money is less available,” Sofos said. “I’m not sure that we’ll see any discernible difference in the market.”

Credits: Star Bulletin

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Home sales on the Big Island and Kauai declined in August along with median home prices, in line with trends on Oahu, according to the latest numbers from Hawaii Information Service.

Only 83 existing homes were sold last month on the Big Island, a drastic decline from 121 the same month last year. A 20 percent drop in the median home price to $320,000 from $400,000 a year earlier didn’t help boost sales.

The picture for Kauai’s real estate market was bleak as well, with only 21 home sales last month, 15 less than in September 2007. This was despite a 21.9 percent drop in the median home price to $525,000, down from $672,500 in September 2007.

Condos on the Big Island fared a little better, with a median price increase to $315,000 from $294,292 last year. But sales dropped by almost half to 24, down from 40 in September 2007.

On Kauai, condo sales last month were down to eight, 12 less than 2007 despite a 16.1 percent drop in the median price to $495,000 compared to $590,000 in September 2007.

Because the markets on Kauai and the Big Island are smaller than Oahu, a few sales can skew medians, but last month’s statistics were consistent with the downward turn statewide.

The median sales price for an Oahu home dropped to $590,000 in September, its lowest point in 31/2 years, while the median price for a condo fell to $296,000, its lowest point in more than 21/2 years.

“The neighbor isles have been off considerably on both the Big Island and Kauai pushing two years,” said Jim Wright, chief executive of Century 21 All Islands. “Honolulu’s just starting to react to the same pressures.”

In this kind of market, Wright said newly minted real estate agents who could list a property and get multiple offers during good times won’t find it so easy any more. But these times are also good for agents to brush up on skills and work on additional professional designations, he said.

Year-to-date, Big Island sales volume for homes dropped 45.7 percent to $438.5 million, compared to $807.9 million in 2007. On Kauai, the sales volume for homes year-to-date dropped 36.7 percent to $206 million compared to $325.6 million during the same period last year.

Credits: Star Bulletin

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Condominium sales on Kauai plunged 60 percent in September, compared to last year, while sales of single-family homes on the Garden Isle fell 42 percent.

Prices also fell in both categories, according to statistics from Hawaii Information Service.

The median price of a single-family home on Kauai last month was $525,000, a 22 percent drop from September 2007, when it was $672,500. Year-to-date prices fared better, declining by about 4 percent to $632,500, down from $661,000 during the first nine months of 2007.

The median price of a Kauai condo in September was $495,000, down 16 percent from the same month last year, when it was $590,000. Condo prices remained flat for the first nine months of the year, with a median price of $560,000, which was the same as for the same period in 2007.

There were only eight condo units sold in September, a 60 percent drop from the 20 units sold in September 2007. Year-to-date sales were down by 40 percent, with just 144 units sold during the first nine months of the year, compared to 241 units sold during the same period in 2007.

Single-family home sales fell 42 percent in September, with just 21 Kauai houses sold compared to 36 houses sold during the same month last year. Sales for the first nine months of the year were down 33 percent, with 226 homes sold, compared to 335 homes sold during the same period in 2007.

Credits: Biz Journals

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