Isle foreclosures down in first quarter

The distressed sales represented 13.7% of all transactions

By Andrew Gomes
Article from: Star-Advertiser

Sales of Hawaii homes that were in foreclosure slowed in the first three months of the year, but their impact on the state’s housing market remained relatively high, a new report released today shows.

There were 362 homes in foreclosure that were sold during the first quarter, which was down 25 percent from 480 sales in the same period last year, according to the report from RealtyTrac.

However, because there were fewer home sales overall, the share of foreclosure sales rose.

Foreclosure property represented 13.7 percent of all first-quarter home sales, or about one out of seven sales. A year earlier, the figure was 12.4 percent, or about one out of eight sales.

It’s unclear how much of the decline in foreclosure sales may be due to a pullback in foreclosure cases or reduced demand from buyers.

A new law requiring lenders to follow new foreclosure procedures and giving homeowners more options to avoid foreclosure was enacted this month, so it had no direct impact on first-quarter foreclosure sales.

During the quarter, the number of foreclosure filings declined 22 percent. Local foreclosure attorneys attribute the reduction to lenders holding back cases after their loan documentation practices were called into question.

Also during the quarter, overall home sales in Hawaii declined, according to RealtyTrac.

Foreclosure sales have a unique impact on the housing market, in some ways helping attract buyers but also generating downward pressure on prices.

Homes in foreclosure sold for an average $322,317 in the first quarter, according to the report. RealtyTrac said that was 18 percent less than the average for all nonforeclosure home sales.

In the first quarter of 2010, the average discount on foreclosure sales was 15 percent.

The discount, however, is influenced by a variety of factors including the condition, size and location of homes sold, which muddies the comparison between foreclosure and nonforeclosure property values.

RealtyTrac counts two types of foreclosure sales — homes in foreclosure that are sold by homeowners before a foreclosure auction, and homes sold by lenders either at auction or afterward.

Most foreclosure sales in Hawaii during the first quarter were by lenders. A year earlier, most were by homeowners.

Of the 362 sales in the recent quarter, 245 were by lenders. That was up 18 percent from 207 lender sales in the year-earlier quarter.

Homeowners made 117 sales in the first quarter, down 57 percent from 273 sales a year earlier.

RealtyTrac reported data on foreclosure sales from 38 states, but did not have sufficient data for 12 states.

Of the 38 states, 27 had a larger share of foreclosure sales among all home sales compared with Hawaii’s

13.7 percent. The average for 38 states was 27.5 percent, or one for every 3.6 home sales.

In Hawaii, the share of foreclosure sales was greatest on Maui and Kauai, at 29 percent and 25 percent of all home sales, respectively, in the first quarter. On Hawaii Island and Oahu the figure was about 9 percent.

5 mistakes homebuyers make

Even in this market, buyers can get tripped up. Here are a few don’ts for first-timers and buyers re-entering the scene.

By Sarah Max of The Wall Street Journal

Homebuyers are an increasingly rare breed. Many who were eager to buy a house raced to take advantage of federal homebuyer tax credits. When those government perks expired in April, home sales essentially went into deep freeze, plummeting to levels not seen in more than a decade, according to the latest numbers from the National Association of Realtors. (Bing: Find the latest information on monthly home sales)

Still, NAR projects that nearly 4 million existing homes will sell this year. First-time buyers, without the burden of a home to sell, could benefit from the foul market and record-low mortgage rates.

But woe to the overconfident buyer. Here are five common missteps that first-time homebuyers make.

1. Snubbing the real-estate agent
With so many websites offering plenty of data on listings, who needs an agent? Most people, actually.

Finding a house and figuring out comps — the price of comparable homes on the market – is the easy part. Managing the nuances of offers, inspections, financing and all the other pivotal steps to buying a home is where many new buyers tend to get tripped up, says Shii Ann Huang, an associate broker with The Corcoran Group Inc. in New York.

What’s your home worth?
When buyers hire agents to act as their representative, the agents are obligated to put the buyers’ interests first, even if their commission is paid by the seller and based on the sale price.

Skeptical? That’s all the more reason to find an agent on your terms. Ask friends and acquaintances for referrals and interview two or three candidates before deciding.

Find your next dream home
But don’t let the agent find you. Viviane Ugalde and her husband, both physicians, made this mistake when they bought their first home in Sacramento, Calif., nearly two decades ago.

“We stumbled onto an agent when she saw us peeking in the windows of an empty house for sale,” Ugalde says. The agent, who happened to live on the same block, came out of her house wearing pajamas, offered to show the couple around the neighborhood and ultimately helped them find a house. Then the agent, who was new to real estate, neglected to show up for the closing.

“It was scary and confusing signing what seemed like a thousand pages,” Ugalde says.

2. Guesstimating how much you can afford
Many buyers mistakenly take a do-it-yourself approach to financing. They use online calculators to estimate how much house they can afford, dive into the house hunt and then get a dash of cold water when lenders refuse to qualify them for that amount.

“The process is so different than it was four or five years ago,” says Diann Patton, a broker with Coldwell Banker in Grass Valley, Calif. Not only are lenders reading loan applications closely, she says, but they’re also verifying employment and running multiple credit checks during the process.

Meet a mortgage broker or banker before you get serious about your search, Patton says. Remember, too, that the costs of buying and owning a home go beyond the sticker price. Although online calculators do account for property tax and insurance, it’s up to you to account for maintenance costs, moving fees and association dues.

3. Letting charm cloud your judgment
No one will fault you for falling hard for a charming older home. But unless the house has been painstakingly remodeled or you’re prepared to pay for repairs and upgrades, an old house can quickly lose its allure.

In 2009, Alison Koop, a public-relations manager for the University of Washington, came dangerously close to saying “I do” to a seemingly fabulous midcentury home in northeastern Seattle. Koop was so smitten with the big windows and vaulted ceilings in the living room that she neglected to notice the exposed wires, shoddy roof and other structural problems. Any delusions Koop had were laid to rest in the guest bathroom.

“When the inspector turned the faucet on,” she says, “the spigot fell off, hitting the floor of the tub with an exclamatory thunk.”If you’re considering an old home, don’t let the inspection be your last line of defense, says Jay Papasan, vice president of publishing at Keller Williams Realty, based in Austin, Texas. “Negotiate a long due-diligence period,” he says. That gives you time to get estimates from contractors and back out, if need be.

Of course, new homes can have drawbacks. Many recently built homes have experienced serious problems with Chinese-made drywall, for example. Proceed with care, whatever the home’s age.

4. Focusing on the house, not the ‘hood’
In hindsight, many buyers say they wish they’d taken their due diligence a few steps further to understand all the perks, quirks and hassles of living in a particular neighborhood. You can always fix up the house, but there’s no easy remedy for annoying neighbors, oppressive homeowners-association rules and marathon commutes.

When Laurie Tarkan and her husband bought their first home in 2001, they were so infatuated with the circa-1924 three-bedroom cottage that — in addition to brushing over some of the headaches of an old house — they didn’t consider its somewhat out-of-the-way location about a mile from downtown Maplewood, N.J., a popular New York subur
“As a first-time buyer, you’re not aware of all the things you should think about that aren’t about the house,” says Tarkan, who after living in New York City for 17 years still hasn’t gotten used to driving everywhere.

Spend as much time as you can in your future neighborhood, ideally on different days and times. Eat in the restaurants, drop in on a yoga class and test drive your commute.

5. Making arbitrary offers
With housing inventory running high and sales at record lows in most markets, there’s no shortage of houses for sale and sellers desperate to get out from under them. It’s all the more reason to hold out for the right house and the right price.

But when you find that perfect house, don’t assume you can lob a lowball offer or make unreasonable demands. Even in hard-hit markets, nice houses in desirable neighborhoods are fetching multiple bids.

If the house has been on the market for months, you probably don’t need to worry about other buyers lining up behind you. Make an offer based on recent sales for comparable homes, foreclosure activity and market trends, and don’t be afraid to start the bidding low. If the house is new to the market or recently foreclosed upon, and other buyers are circling the block, put your best foot forward, but don’t get suckered into a bidding war.

**This was an excellent and insightful article by Sarah Max for The Wall Street Journal that was posted on msn.com. Please note that some of the points are based on national considerations – for questions specific to our Maui market place please call The Hansen Ohana at (808)879-3667 anytime.

Isle jobless rate dips to 6.1%

Unemployment was the lowest in two years during April, a state report says

By Alan Yonan Jr.
Article from: Star-Advertiser

The sluggish recovery in Hawaii’s labor market picked up speed in April with the unemployment rate falling to 6.1 percent, the lowest level in more than two years.

The improvement came after four straight months in which the jobless rate was stuck at 6.3 percent on a seasonally adjusted basis, according to a report issued yesterday by the state Department of Labor and Industrial Relations. April’s unemployment rate was the lowest since January 2009, when it was 6 percent.

The report also showed that Hawaii fared better than the nation as a whole, which experienced an increase in the average unemployment rate to 9 percent in April from 8.8 percent in March.

The number of employed rose to 596,900 in April, an increase of 2,900 from March, according to the report. At the same time the number of those who were unemployed fell by 1,400 to 38,500.

The labor force data are derived from a telephone survey of households conducted by the U.S. Bureau of Labor Statistics. A separate BLS survey of businesses in Hawaii showed that there was a net reduction of 300 payroll jobs in April from March. Despite the decline through the first four months of the year, job growth is running well above last year’s pace, according to the Bureau of Labor Statistics. As a result, Hawaii’s job market is expected to expand in 2011 for the first time in four years, BLS data show.

The BLS surveys of households and businesses sometimes give conflicting views of the job market from month to month, but over time they generally show a similar trend.

The University of Hawaii Economic Research Organization predicts payroll jobs will increase by 1.6 percent this year. UHERO forecasts Hawaii’s jobless rate to average 6 percent in 2011, down from 6.6 percent in 2010 and 6.8 percent in 2009.

Despite the overall improvement in the job market, there are specific industries, construction in particular, that continue to struggle. While the number of construction jobs increased by 400 in April from March, the industry is in the midst of a three-year decline, having lost more than 10,000 jobs since 2007. Construction jobs peaked that year when the industry employed about 39,100 workers a month.

That could change this year, in large part because of hiring associated with the rail project on Oahu, UHERO reported. The organization forecasts a 3.7 percent increase in construction jobs this year, with job growth focused on Oahu.

“Looking forward, the industry fortunes will differ considerably between Honolulu and the other three counties,” researchers wrote in the report, released yesterday.

“The beginnings of mass transit work will support an acceleration of construction job growth on Oahu over the next few years. While neighbor island construction will also begin to turn around, conditions will not warrant a rapid upturn in either residential or commercial construction.”

On a county-by-county basis, Honolulu County’s 4.6 percent jobless rate in April was the lowest in the state, the state Labor Department reported. Elsewhere, the rates were 7.1 percent in Maui County, 7.7 percent in Kauai County and 8.9 percent in Hawaii County. The county data are not adjusted for seasonal variations.

Besides the increase in construction jobs in April, the state reported an additional 400 jobs added in government, 200 in professional and business services and 100 in financial services.

Leisure and hospitality lost 1,300 jobs, in part because of the temporary closing of the Kona Village Resort and the Four Seasons Hualalai on Hawaii island that were damaged by the March 11 tsunami, the state reported. Trade, transportation and utilities lost another 700 jobs, according to the report.

Hawaii jobs expected to grow for first time in four years

By Star-Advertiser staff
Article from: Star-Advertiser

Hawaii’s job market is on pace to grow this year for the first time since 2007 and the visitor industry is expected to shrug off a drop in Japanese tourists, according to a state forecast released today.

Job creation, one of the last pieces of the economy to recover from the recent recession, is forecast to increase by 1.8 percent in 2011, the state Department of Business, Economic Development and Tourism reported. That’s up from a 1.3 percent rise predicted by DBEDT in its last forecast three months ago. The number of jobs generated by the economy had fallen in 2008, 2008 and 2010.

DBEDT revised downward slightly the number of visitors it expects to travel to Hawaii this year because of the natural disasters in Japan, but it revised upward the total amount of visitor spending.

“We note that visitor arrivals from the rest of the world are still growing, especially visitors from Canada and that cruise visitor counts are growing at double digits during the first three months of the year,” said Richard Lim, DBEDT director.

“We are also pleased to see jobs are growing again in the areas outside of tourism, such as information, professional and business services, and educational services,” he said in a news release.

DBEDT is forecasting the number of non-agricultural payroll jobs to grow to 603,900 across the state this year, up from 593,200 last year. However, the 2011 forecast is still far below the 624,900 jobs in the economy in 2007 before employers began cutting back as a result of the economic downturn.

Hawaii hogs list of places families will see in summer

By Erika Engle
Article from: Star-Advertiser

Hawaii’s beaches are among the top summer destinations for families, according to a Travelocity booking data review released in advance of Memorial Day, the unofficial start of summer.

That’s sure to be music to visitor industry players’ ears and bottom lines.

Orlando, Fla., and Cancun, Mexico, were ranked Nos. 1 and 2, respectively, but Travelocity explains that Honolulu, at No. 3, was only one of the four Hawaii destinations in the top 10.

Travelocity points out that “getting to the world-famous Waikiki (is) a breeze” since direct-to-Honolulu flights can be had from many mainland markets. (it calls them “U.S. cities” as if Hawaii is not part of the U.S. Doesn’t the Roaming Gnome remember that, after his trip here?)

Maui is ranked the No. 4 summer destination for families, despite it being known as a famous honeymoon spot.

The No. 5 spot on the Travelocity summer-travel-for-families list is occupied by Kauai, which it describes as the “perfect island choice for active families and nature lovers.”

The fourth Hawaii destination is Kona, at No. 7. Travelocity informs readers that Kona is “an excellent destination from which to explore … the state’s most diverse” island, with an active volcano and snow-capped mountains. “Yes, there’s snow in Hawaii!” it parenthetically exclaims.

OK, we in the 808 state all know that’s true, but your columnist feels the need to point out that Mauna Kea rarely, if ever, bears a snowy head lei in the summer.

The rest of the top 10 is composed of No. 6, the Bahamas; No. 8, Puerto Vallarta, Mexico; No. 9, Turks and Caicos; and No. 10, the Dominican Republic.

The Travelocity list also cites average daily room rates for each destination, with Orlando, Fla., bearing the lowest at $87 and Turks and Caicos the highest at $248. Travelocity reports Hawaii’s ADRs as $136 for Honolulu, $181 for Maui, $154 for Kauai and $141 for Kona.

The trouble with such popularity rankings is that not everyone is a trend or popularity follower, and some are in fact crowd-averse to the point of steering away from things “everybody else” is doing.