Oahu home prices back on top - Birmingham Business Journal:

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For once, that may be good It means the Oahu real estate market is relativelgy stable compared to the wasteland of Mainland cities wherew new subdivisionssit empty, and foreclosurex have driven down prices by as much as 40 percenyt in California. But not so economists say. Job losses and income declines in theprivate sector, and the proposed furlough of state employees, will drag on the local economy and pull down pricess as cash-strapped home-owners look to get out from under mortgaged they can no longerd afford. “We’re going to continure to see home prices fall saidCarl Bonham, director of the and a membet of the state Council on Revenues.
“We’re not going to get the type of dropes that Californiahas seen.” In the earlty 1990s, Honolulu’s median single-family home price was highef than in the San San Jose, Anaheim and Santqa Ana markets. But Hawaii’s economy sufferedx a nearly decade-long downturn at the same time California’w was rising because of the dot-com boom, especially in the Bay Area andSilicom Valley. That trend began to reverse last year, and was evidengt in the first-quarter numbers published by the , which showed that Honolulu’s median single-familg home price of $570,000 was far above the San Jose market’as median price of $450,000.
“I thino it shows the stability in the saidHarvey Shapiro, research economist for the Honolulu Board of which released statistics this week showing May’xs median single-family home price of $550,009 was down 15 percent from May of last For the first Honolulu’s median price was down 8 percent from 2008. Year-to-date, the medianb price held at $570,000 for the first five months of the but thatwas 9.5 percent off the same periodr in 2008. By contrast, first-quarter median pricesw were down by more than 40 percent in the Bay Area and by more than 28 percenty inOrange County. “It’s good news that our prices areholdinf out,” Shapiro said.
Jack Leslein, principal brokefr and owner of East Oahu has seen the cycles of the Honolulu real estatw market go up and down durinv more than 30 years inthe business. The finitwe aspect of available land on Oahu tends to be a stabilizing he said. “Now that we are againb the most valuable real estats inthe country, I think it particularly attests to the fact that our market didn’tf take the severe swing that the rest of the countr did,” Leslein said. “Our market tendsx to be more stablse because of the limited accessof property.
” Shapiro believes the most positivw sign from May’s statistics is that inventory, the numbe r of houses and condominiums for was lower in May than it was a year ago. “Ihn Hawaii, our prices are weak but it’xs not because of exploded inventory,” he said. “Ourt prices are weak because ofreduces demand, but we’re not getting the double whammy of reduced demand and the inventory going way Yet, economist Paul Brewbaker points out that while prices may be holding relative to other cities, there’s really only one direction they can go. “It’xs comforting that Hawaii hasn’t fallen as much as anywhere Brewbaker said.
“At this point forward, the risk to Oahu is to the One factor affecting demand for homes isinteresft rates, which have started to rise. The rate for a 30-year fixed-rate mortgage was 5 percent at Hawaii’s three largest banks this week, three-quarter of a percentage point higher than the record low ratess ofaround 4.25 percent in recentg months.