Oahu Real Estate December 2014 Year End Report

Transcription

1 Oahu Real Estate December 2014 Year End Report By: Mike Gallagher Real Estate, Inc. In order to view the next large Excel Spread depicting all Areas around Oahu and how they performed over twelve months ago you will need to click the below links: Oahu S.F.H. Executive Summary ALL December 2014 Oahu S.F.H. Executive Summary ALL Year End

2 Oahu Condo Executive Summary ALL December 2014 Oahu Condo Executive Summary ALL Year End

3 2014 (above) vs (below) 3

4 In the Upper Right Hand Corner Box of this map is general information pertaining statistics for all Oahu Single Family Homes (S.F.H.) and Condos for the Month. The first figures you will see are A.C.S. percentage figures for both SFH s and Condos. A.C.S. stands for Active Continue to Show. This category is assigned to homes that are in Escrow by the Honolulu Board of Realtors within 15 days of a home solidifying an Accepted Offer. This data is the newest, freshest data available, unlike Sold Data which is often 60+ days old. Therefore, when we look at A.C.S. data we can where we are going vs. Sold Data where we see where we have been. The A.C.S. percentage for SFH s is noted next to a RED Arrow and Condos next to a GREEN Arrow. The A.C.S percentage is derived by dividing the total inventory For Sale by the number of homes in Escrow that have a Just Accepted Offer. The percentage gives us an indication of the health of a particular market. The A.C.S. percentage can either rise or fall depending upon other influences such as the amount of inventory For Sale and how many homes are in the A.C.S. category. The higher the A.C.S. percentage will most likely indicate a high amount of buyers putting homes into escrow while there is relatively low For Sale inventory available. The opposite can happen as well which would result in a lower A.C.S. percentage when there is relatively too much For Sale inventory and a low amount of buyers putting homes into Escrow. Also in the Upper Right Hand Corner of this map with the A.C.S percentage you will find the Average For Sale and Average Sold Prices for both Single Family Homes and Condos. Please also note that all of the figures on the rest of the Oahu map are in Averages as well. I personally like to look at Averages vs. Medians as Averages will provide us with a much better picture of what is truly happening. As an example: The Kailua S.F.H. Median For Sale Price for the month last year was $937,000 but the Average For Sale Price of all Kailua Homes is $2,279,395. Big difference is it not? Beside each A.C.S. percentage box is the Area name or City name. Please remember that the RED Arrows are next to the A.C.S. percentage for Single Family Homes and the Average For Sale and Average Sold figures for these S.F.H. s are in GREEN / RED respectively. The Average For Sale Price and Average Sold Price for Condos are next to the A.C.S. percentage box where there is a GREEN Arrow which stands for Condos. The Average For Sale Price is in PINK and the Average Sold Price is in BLUE for Condos. The color of the A.C.S. percentage for each Area or City, as well as the direction of the Arrow for both S.F.H. s and Condos will be in RED if under the Oahu Average and the Arrow will be in a Downward position. If the A.C.S. percentage is above the Oahu Average the A.C.S. percentage will be in GREEN and the Arrow will be in an Up position. 4

5 The A.C.S. percentage has steeply climbed from the beginning of 2012 due to a severe inventory shortage and an interest rate driven buyer demand for homes.the year 2014 has brought us down to a much lower level of activity but a stable one. 5

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11 It is a given that many high end properties are coming onto the market and although they are selling, the majority of buyers are purchasing in the lower price ranges. This has been an ongoing trend since year

12 I am little concerned with the some of the numbers the Honolulu Board of Realtors issues as they just do not look correct. One concern I have are their Median Sold Prices. I professionally do not trust the figures issued from The Honolulu Board of Realtors as I have seen too many oddities when I calculate the numbers from the Board site. In short, when their figures do not make sense, they simply change them later down the road. 12

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14 The Honolulu Board of Realtors method of measuring Days On Market only measures those amount of days for Correctly Priced Homes since they count from day one on the market until it goes into Escrow, not how long the home was on the market in its entirety. 14

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16 The Honolulu Board of Realtors tracks statistics called List to Sell ratios. All real estate data is tied to the property address. Any changes in a listing for sale are recorded by the Board to the property address. Any changes in the listing price, price reductions, how many times the property is Re-Listed and by whom, etc. are all recorded to each Multiple Listing Service (M.L.S.) listing. Above is an example of Sold Listings and their List to Sell Percentage Ratios showing if the home was sold at 100%+, 100%, 90%, 80%, etc. These reports, produced by the Board DO NOT show how many times the property address was Re-Listed nor do they show price reductions. This is kept away from the General Public. The following graphs show what was reported by the Honolulu Board of Realtors as Sold At Full Price Or More and I have shown what the real figures show as Sold At Full Price Or More. Please pay particular attention the Days On Market for all of the homes Sold and compare it to the Days On Market for the homes Sold At Full Price Or More. It pays to price your home correctly. Immediately following the graphs titiled Percentage Sold At Full Price Or More you will see two more graphs of which one of them is for Single Family Homes and the other for Condos on Oahu. These graphs show exactly how the Major Brokerages on the Island of Oahu have done in selling their client s homes in obtaining their client s highest possible price versus the Listing Price. The performance is shocking to say the least and trust me you are going to be surprised. 16

17 Further investigation has to be done by a member of the Board, such as a Real Estate Agent with access to the M.L.S. to show the true story. In Reports circulated to the Public announcing the latest List to Sell Percentage Ratios, such as the graphs I created above, the Average amount of S.F.H. s sold in December 2014 reportedly sold at 100% Or More of List Price by the Honolulu Board of Realtors was 46% of all sold listings. This is not true. If you take out the price reductions and re-listings, the true figure is 35%. The Honolulu Board of Realtors reports that for December 2014 Condos Sold At Full Price Or More at 46%. This is not true. The true average is 36%. 17

18 It might also be said from looking at the two graphs above that in reality, Year to Date, 65% of Single Family Homes were priced incorrectly if only 35% sold at Full Price or more Year to Date and 66% of Condos were priced incorrectly. These numbers supplied by the Honolulu Board of Realtors, in light of what I have described to you above concerning Reductions to the Original Listing Price and the Withdrawn and Expired Listings for the same home, make the numbers for Homes Sold At Full Price Or More supplied by the Honolulu Board of Realtors completely false. 18

19 Unfortunately, the average has been steadily dropping as For Sale Prices are not sticking and Sellers are lowering their prices more frequently, which of course the Honolulu Board of Realtors does not want you to know. 19

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21 The graphs below tell an amazing story of the Top Four Unit Sales Brokerages on Oahu who do the most unit sales volume and just how many or how few they sell at 100%+ of Listing Price: 21

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23 This is a little scray is it not? It PAYS to check out the Brokerage and Agent you are contemplating in selling your home regardless of relationships. You deserve the most money for your home. I can do this for you. There are of course only so many homes that come onto the market each year and only so many that sell. Many of the homes that come onto the market go through Re-Listings or Price Reductions unless they are Withdrawn or the listings Expire and taken off of the market. Realizing your Odds of Selling will help you price your home or offer the right price for a home. Pay attention: The percentage or Odds are dropping! 23

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26 Another great graph I have recently come up with is what I call Multi-Graphs where you can see at a glance everything that is For Sale, In Escrow (A.C.S.) and Sold, all on one graph: 26

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28 I think we have hit Bottom! 28

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34 The Average Year to Date Months of Supply is highlighted in the Caption in the center of the graphs but the actually Monthly Months of Supply are shown in RED. The current month is compared with the same time last year and we can see the percentage decline in Months of Supply for both Single Family Homes and Condos all across the Island. Please remember: Inventory and Months of Supply are two separate things. Inventory is just the supply of homes on hand that are For Sale. Months of Supply is the supply of inventory For Sale measured in average units Sold. 34

35 Inventory is low for Single Family Homes and if you are a Buyer I recommend that you do not procrastinate in consumating an offer on the home you want before someone else does. The Real Estate Industry uses the six month level as a dividing line and has statistically proven that any inventory under the six months level is a Sellers Market and anything over the six month level is a Buyers Market. Months of Supply or M.O.S. is falling as unit sales pick up and but the reduction is even more attributible to the loss of New Listings and the overall reduction in inventory. It is a Shrinking Market where there is much less choices for most Buyers. Oahu December 2014 Months of Supply Oahu December 2013 Months of Supply 35

36 Last year it was going to be a Seller s Market for a long time to come. This year it is going it is still going to be Seller s Market for a long time to come. 36

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38 Now let us see where the inventory is: 38

39 The percentage of inventory for Single Family Homes For Sale priced above $1,000,000 is forty-four percent (+10% from last month). For Condos the percentage of inventory priced over $500,000 is thirty-four percent (+1% from last month). 39

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42 What has sold is really Looking Backwards. We see what Sold by Price Range for the Month but these homes that Sold started their sales process when they went into Escrow almost two months ago on average. Only sixteen percent of the Single Family priced at $1,000,000+ is in Escrow (+2% over last month) 42

43 Forty-two percent of the Condos priced $250,000-$499,999 are in Escrow. ( -7% from last month) At the end of the year it is not until I produce the Year End Reports that I fully understand what has happened during the course of the year and frankly, I could not have guessed it would have ended like this. Producing and seeing the results is always a surprise to me. Let us see how I well I predicted: Mike Gallagher s Famous Crystal Ball Predictions for Year 2014 Single Family Home Price will be Flat-Line (Actual: -2%) Condo Prices will Fall by 1-5% (Actual: -1%) Single Family Unit Sales Volume will be Flat-Line (Actual: +7%) Condo Unit Sales Volume will Increase by 5-7% and higher for the High End Condos (Results are Not in Yet. I still have to calculate) Single Family Home Days On Market will continue to increase (Actual: - 4%) Condo Days On Market will decrease (Actual: +15%) Single Family Home Inventory will be Flat-Line to +2% (Actual: -4%) Condo Inventory will increase by 1-5% (Actual: -4%) Much to my chagrin, I stink at yearly predictions. Out of eight predictions, I still have one unanswered resulting in I have two correct out of seven or 29%! Needless to say I am NOT going to present any predictions for year Let us all just hope that it is good one for all of us! 43

44 I hope that you have enjoyed this report and of course if you have any questions about buying or selling Real Estate in Hawaii please do not hesitate to call me. I know of no other Realtor or Agent on this Island of Oahu who knows the Market as well as I do and more importantly, where the Market is headed. If you really want to have the straight info on what is really happening in Hawaii Real Estate you will be refreshed by visiting my website and speaking to me, as I tell it like it is. I have been in this business for twelve years and I have helped buy and sell many homes for my clients. My references and knowledge are both excellent. 44

45 Mike Gallagher, Mike Gallagher Real Estate, Inc.-Principal Broker You may also want to visit at my website to learn more about various other Neighborhoods around the Island and see the comprehensive report for Oahu. A quick trip there will provide you with a wealth of Real Estate knowledge you never before even knew was available. I sometimes offer Videos of my Sales Reports but I only do these as time permits. What I do have available is on my website and Youtube.com 45