[youtube_video] iK53oLFK3U8 [/youtube_video]
Video Transcription
Aloha! This is George Krischke with Honolulu HI 5 (company now called Hawaii Living). It is another fine day in Paradise and I am excited to present today the first video in our ongoing series called Real Estate Dynamics. This is where we analyze the observable evidence to identify any changes in the market place or any developing new trends. Let’s take a look. Here we’re going to take a look at activity and prices. This is a broad look at the historical data for the Oahu real estate activity and the associated price movement. The first slide shows as Closed Sales. This is activity defined as how many homes have closed. There are two lines. There is a red line and a blue line and the data goes all the way to the latest available data point which is March 2014 right here. First quarter of 2014 just completed and we go back all the way to 1987. The top line, the red line is the number of closed transactions for condos on the island of Oahu in each respective month. The blue line indicates the number of closed transactions for single family homes on the island of Oahu. Now there are a couple of things we notice. Number one, it appears that there are always more condos selling on the island of Oahu than single family homes in every month just about and that is because here on Oahu more people live in condos than in single family homes. We have Waikiki with a number of high rise buildings and we have other neighborhoods where we have a lot of condos on the island. We can also see there is some seasonality in the sales activity. We see during the summer there are more sales taking place, more closed transactions. Summer. Winter. Summer high point. Winter low point. Summer high point. Low point in the winter. We can also see clear defined peaks and valleys of sales activity here. In 1990 we see that the market sales activity peaked out and there was a steep drop in sales activity that a found a low point in 1997. This was a very slow market, very few sales. This downturn in sales activity was triggered by the start of the Japanese recession and possibly by the first Gulf war which started in 1990, which took place in 1990. In 1997, sales activity found the low point and sales activity was trending upwards to the next peak of sales activity which was put in place here in 2005 and then from 2005 there was a clear downtrend in sales activity that found a bottom in 2009. Now you may remember at the end of 2008 was the collapses of Lehman Brothers and things looked rather dire for the outlook for the economy and sales activity from the low point here in early 2009. Since then sales activity has been climbing on a somewhat slow but steady trajectory.
So let’s take a look at what prices have done during the same time frame. Here we see a graph that shows us the median sales price for single family homes here on the top, the blue line and for condominiums, median sales price for condominiums on Oahu showing here on the red line. This is the same time frame going up to March 2014 and going back all the way to 1987. So we see some clear peaks and valleys. There is no clear seasonality visible but we do see some defined peaks here back in 1990 and what I want to do is I want to go back to the other graph and take a look at what activity has done and what prices have done at those different inflection points. So let’s go back to Closed Sales. This is closed transactions. We saw a peak of sales activity in 1990 and the bottom of sales activity during that cycle was in 1997. What have prices done in that time frame? It appears prices have peaked out in 1990 for single family homes and for condos. Then they moved sideways. Maybe it looks like they overshot their target and then they oscillated for a few years, found a new plateau and sort of moved downwards up until 2001. Looks like 2001 was the bottom as far as prices. Notice that even though sales activity dropped dramatically from plenty activity down to very few sales, prices didn’t really collapse. Prices sort of moved overshot their target and then moved sideways and then sort of found a low point in 2001. No 2001 for the bottom of prices is right here we notice that sales activity already started to increase as of 1997. So there’s a lag time. So what we notice is that activity starts to change before prices start to change. In this case there is a lag time of up to about three years where activity started to climb but prices didn’t quite turn around until 2001. Going back to prices here 2001 low point and then prices started to climb. Sales activity peaked out in the next cycle in 2005 right here. 2005 sales activity a clear defined peak and then sales activity slowed down and dropped off until the low point in 2009. Remember Lehman Brothers. What have prices done during the same time frame? We notice prices peaked out not in 2005 which is right here. Prices actually continued to climb even though sales activity had already rolled over and prices peaked out in what we can identify probably the summer of 2007. Sales activity slowed down and then Lehman Brothers and then there was a low point in the sales activity in 2009. We remember that. Prices found a low point well for condos somewhere around here maybe 2011. So prices actually continue to retreat a little further. For single family homes the low point is probably right here 2001. Sales activity we mentioned has been increasing since the low point of 2009 and prices have also sort of moved up at least since 2011. We can see a clear trend that prices have been moving up. Let me first point out the drop as a result of a financial crisis from the peak that we put in place here in the Oahu real estate market in 2007 from the peak of the real estate market in 2007 to the low point in 2009, 2011 somewhere here. That drop represents a 10% retracement in price levels. That’s it folks. That’s all it dropped for the median sales prices on Oahu and that holds true for single family homes as well as for condos. Individual neighborhoods may vary but the overall median sales price dropped 10%. So where are we now today? Latest data point March 2014, we actually have reached a point of price level that is just about equal to the peak of the last cycle. So that is the trend that we’ve been observing at least since 2011 and that’s it for today. We’re going to have a number of more detailed videos going much more in depth in the market and showing details of the Oahu Real Estate Market and until then thanks for watching. Aloha!
[youtube_video] 6pDkTizWcDg [/youtube_video]
Video Transcription
Aloha. This is George Krischke with Honolulu HI 5 (company now called Hawaii Living). In our first video of the ongoing series of Real Estate Dynamics we looked at the broad market. We identified peaks and valleys in sales activity and price, historic price movement. In our second video we’re going to get a little more in depth, and we’re going to take a look at the two main factors, which are supply and demand, as well as other dynamics that define the market.
The first slide shows us the number of active listings in the Oahu real estate market. There are two lines. We see the number of condos up here, the red line, the number of condos in each respective month going back. This is a time frame of two years up to March 2014 and going back to April 2012. And, we have the blue line which shows us the number of active listings for single family homes in the same time frame.
If we try to identify any trend, well, we see active listings was a little higher two years ago. Then, it dipped down around January 2013, and it went up a little bit. But, it is for both single family homes as well as for condos. The number of active listings respectively is lower than what it was two years ago. We’ll keep a close eye on what’s happening with those, with the number of active listings.
This is supply. The next number is demand which is defined by the number of closed transactions on the island of Oahu. We see two lines again, condos as well as single family homes. The same time period – two years. We see there was a low point in activity around January 2013. But, overall we can identify that closed transactions is higher, trending upwards, in the last two years. We take a close look at that, how it will develop in the future months.
Median sales price, same time period, last two years. As of March 2014, the latest data point, the price for single family homes is trending upwards and is today higher than what it was two years ago. Median sales price for condos has been trending upwards as well.
Pending sales. Pending sales is the number of properties that have received an accepted contract in any given month. This is based on a 12 month rolling total. The graph is smoothed out, and it’s broken down into different price ranges.
This is for single family homes. We notice that most lines in the two year time period that we’re covering here are trending upwards. There are two exceptions. There’s the blue line here which is the price range of $350,000 and below, as well as the red line here which is the price range for single family homes of $350,000 up to $475,000 and that one is trending down as well – at least for the last year.
Why is that happening when all other lines are trending upwards? The reason is there are fewer and fewer homes that are available for purchase on the island of Oahu that are below $350,000 as well as below $475,000. We’ll continue to analyze the data as time moves forward.
Pending sales for condominium units on the island of Oahu. Same time period, two years. We can identify that all lines are… All price ranges… This is broken down into several price ranges. All price ranges are trending upwards during the two year time period.
Days on market until sale. This slide shows us the median number of days between when a property is first listed and when an offer is accepted. This is also a 12 month rolling median.
We see this is broken down. This is for single family homes broken down into different price ranges. We see that most lines two years ago most price ranges for single family homes sold within 30 to 45 days. Today, most price ranges are selling between 20 and 30 days. So, the market has been speeding up over the last two years.
Now, what is this lone range up here? There’s one line. This is the ultra luxury homes, home range $1.9 million and above. We know that single family homes above $1.9 million are in a different category altogether. They do take longer to sell, those high end properties.
Back two years ago they took for the most part somewhere around 80, 85 days. Now, those high end properties are selling also somewhat faster. It looks like they’ve been selling in about 50 days now. We will continue to take a look at this.
This is an indication of how fast the market is moving. Certainly, faster today than two years ago.
Same data for condos. Same time period, March 2014 going back two years. The different price ranges, $150,000 up to the high end which is $700,000 plus. We see all those fish are swimming in the same direction. It looks like the market is speeding up for condos for all price ranges at least during the two years that we’re covering here.
That’s it for today. In future videos we will get into more depth and analyze more data and more graphs. Until then, thanks for watching. Aloha.