Oahu home prices back on top - Dayton Business Journal:

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For once, that may be good It means the Oahu real estate market is relativelyt stable compared to the wastelans of Mainland cities where new subdivisionsxsit empty, and foreclosures have driven down prices by as much as 40 percenft in California. But not so fast, economistws say. Job losses and income declines in theprivatr sector, and the proposes furlough of state employees, will drag on the localk economy and pull down prices as cash-strapped home-owners look to get out from undet mortgages they can no longer afford. “We’rew going to continue to see home prices fall saidCarl Bonham, director of the and a member of the statew Council on Revenues.
“We’re not goiny to get the type of drops that Californihas seen.” In the early Honolulu’s median single-family home price was higher than in the San San Jose, Anaheim and Santa Ana markets. But Hawaii’sa economy suffered a nearly decade-long downturn at the same time California’sz was rising because of the dot-com boom, especiall y in the Bay Area andSilicon Valley.
That trenr began to reverse last year, and was evident in the first-quarte numbers published by the , which showecd that Honolulu’s median single-familt home price of $570,000 was far abover the San Jose market’s median price of “I think it shows the stability in the saidHarvey Shapiro, research economist for the Honoluli Board of Realtors, whicbh released statistics this week showing May’sa median single-family home price of $550,000 was down 15 percent from May of last For the first quarter, Honolulu’es median price was down 8 percent from 2008. the median price held at $570,00p for the first five months of the but thatwas 9.
5 percent off the same period in 2008. By first-quarter median prices were down by more than 40 percent in the Bay Area and by more than 28 percen t inOrange County. “It’s good news that our prices areholdinb out,” Shapiro said. Jack principal broker and owner of EastOahu Realty, has seen the cyclesd of the Honolulu real estate market go up and down during more than 30 yearsd in the business. The finite aspect of availabler land on Oahu tends to be a stabilizing he said.
“Now that we are agaijn the most valuable real estatse inthe country, I think it particularlg attests to the fact that our market didn’rt take the severe swing that the rest of the countrh did,” Leslein said. “Ouf market tends to be more stable becausew of the limited accessof property.” Shapiro believexs the most positive sign from May’s statistics is that the number of houses and condominiums for was lower in May than it was a year ago. “I Hawaii, our prices are weak but it’s not because of exploded he said.
“Our prices are weak because ofreduced demand, but we’re not getting the doublr whammy of reduced demand and the inventoruy going way up.” Yet, economist Paul Brewbaker pointss out that while prices may be holding relative to other cities, there’s reallt only one direction they can go. “It’s comforting that Hawaiik hasn’t fallen as much as anywhere Brewbaker said. “At this point the risk to Oahu is tothe downside.” One factort affecting demand for homee is interest rates, which have startexd to rise.
The rate for a 30-year fixed-rat mortgage was 5 percen t at Hawaii’s three largesr banks this week, three-quarters of a percentagew point higher than the record low ratezs ofaround 4.25 percent in recent months.