Oahu’s January home prices rise 10.8%

Median sales price in Jan. was $597,500; Kapahulu-Diamond Head area saw biggest increase

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By Andrew Gomes
Advertiser Staff Writer

O’ahu’s housing market started the year on a positive note, as the median price of previously owned single-family homes sold in January jumped 10.8 percent to $597,500 from $539,500 a year earlier.

Last month’s gain was only the third time in three years in which the median price for any month rose over the same month a year before, according to Honolulu Board of Realtors data.

The two previous gains were 1.7 percent in September 2009 and 2.7 percent in December 2008.

It would be hard to say that prices have hit bottom and are on their way back up based on only one month’s performance.

A University of Hawai’i Economic Research Organization forecast published in September predicts the median price for O’ahu single-family home sales this year will decline 2.4 percent. Last year, the median price was down 7.9 percent to $575,000. The median price in 2008 was down 3 percent to end eight consecutive years of annual increases.

The market, however, since mid-2009 has been attracting more buyers fairly consistently. January marked the fifth consecutive increase for the number of single-family home sales, with a 32.8 percent rise to 162 from 122 a year earlier.

Brian Benton, president of the Honolulu Board of Realtors and an agent with Prudential Locations, called last month’s results encouraging.

“Competitive pricing, current inventory levels and the extension of the federal tax credit seem to be turning house hunters into first-time homebuyers,” he said.

The median sale price increase was spread over much of the island. Of 17 submarkets defined by the Honolulu Board of Realtors, the median price was up in 12 and down in five.

The biggest increase was a 73 percent gain in Kapahulu-Diamond Head where the median was $940,000 on 13 sales last month compared with $542,500 on four sales a year earlier.

Observers note that the type of homes sold is often the reason for such dramatic swings, especially in areas that include large concentrations of luxury mansions and older smaller homes. In one month, there could be a number of high-end or modest homes sold that can push up or pull down the median, which is a point at which half the sales are above the price and half are below.

In O’ahu’s largest submarket, the ‘Ewa Plain, the median price was down 9.8 percent to $435,000 on 32 sales last month compared with $482,000 on 19 sales a year earlier.

Real estate brokers say foreclosures are a bigger problem in the ‘Ewa Plain and has contributed to downward pressure on prices there.

In the condominium market on O’ahu, the number of sales was up but the median price was down.

There were 227 condo sales last month, up 42.8 percent from 159 a year earlier. The median price was $299,000, down 2 percent from $305,000.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.

Market Update: Sales of existing U.S. homes increased more than forecast in October to the highest Level since February 2007, spurred in part by a tax credit that lured first-time buyers. Purchases rose 10.1 percent to a 6.1 million annual rate from a 5.54 million pace in September, the National Association of Realtors said today in Washington. The median sales price decreased 7.1 percent from October 2008, the smallest decline in more than a year.  Cheaper homes and stimulus such as the $8,000 incentive, extended and expanded by the Obama administration this month, have revived an ailing housing market that contributed to the worst economic slump since the Great Depression. Further improvement that would aid the economy’s recovery depends on an easing in unemployment and foreclosures.  “It’s an impressive increase and shows a lot of pent-up demand for housing,” said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York. “Buyers have enough  confidence to take the plunge. The housing market recovery will be a durable one.”

Quotes of the Day: 

I like the dreams of the future better than the history of the past.
Patrick Henry

Reputation is what men and women think of us; character is what God and angels know of us.
Thomas Paine

In prosperity, our friends know us; in adversity, we know our friends.
John Churton Collins 

eBay founder, wife pledge $50 million to Hawaii charities over six years

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Advertiser Staff

Internet entrepreneur Pierre Omidyar and his wife Pam have pledged to donate $50 million over six years to the Hawaii Community Foundation.

The foundation said it believed the donation is the largest single gift by a living donor in Hawaii’s history. The investment will be used to launch several community initiatives over the six-year period as well as support the Omidyars’ ongoing philanthropic interests through the Omidyar Ohana Fund at the Hawaii Community Foundation.

“Pam and I are privileged to call Hawai`i home. Given the economic crisis and hardships throughout the state, we felt it was especially important at this time to expand our philanthropy in the Islands,” Pierre Omidyar said in a news release.

Omidyar, whose net worth was estimated at $4 billion earlier this year, is the founder and chairman of eBay Inc. Pierre attended eighth and ninth grades at Punahou School, and Pam grew up in Hawaii Kai. The Omidiyars and their three children moved to Hawaii in 2006.

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Foreclosures dip 5.5%

The total fell in April but still was the second highest in more than a year

By Erika Engle

POSTED: 01:30 a.m. HST, May 13, 2009

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Hawaii foreclosure filings took a breather in April from the previous month but still soared 216.7 percent over the year-earlier period.

The 684 filings last month was a 5.5 percent dip from March, but it still was the second-highest total in more than a year, according to data released today by RealtyTrac, an online marketplace for foreclosure properties.

There were 724 cases in March.

In April 2008 there were 216 filings, according to RealtyTrac’s latest statistics, a slight discrepancy from the 210 that the company reported a year ago.

Daren Blomquist, RealtyTrac’s marketing communications manager, said that when there is a spike one month, such as the more-than-500 percent year-over-year increase posted in March, it is common “for there to be a pullback the next.”

The 5.5 percent month-to-month dip is not necessarily a sign that the trend is reversing, said Harvey Shapiro, research economist with the Honolulu Board of Realtors.

“I wouldn’t put too much into that” decrease, he said. “I think it’s just timing.”

The nearly 217 percent increase “is something to be concerned about, but I still think we’re in better territory than most other cities.”

Hawaii’s lower number of subprime mortgages could be a factor in other states’ rates being higher than ours, Shapiro said.

Last month Hawaii had the 23rd-highest rate of foreclosures among the 50 states, with one in every 741 housing units undergoing some form of foreclosure activity. Hawaii ranked 36th in April of last year.

“Hawaii has been one of the states that’s been posting the biggest increases,” which could be because “a lot of those homes are second homes or are non-owner-occupied, (which) could be skewing the numbers higher,” said Blomquist.

A large percentage of Hawaii’s foreclosure cases, 46 percent, involve second homes or vacation homes that are not owner-occupied. That figure has risen sharply since the last time RealtyTrac checked — it was at 27 percent in October, Blomquist said. The national average is 30 percent.

Nevada, Florida, California and Arizona have led the nation in foreclosure rates for at least a year, Blomquist said.

Nationally the 342,038 foreclosures in April marked a second consecutive month with a record high. One in every 374 housing units was the subject of a foreclosure filing, the highest monthly rate since RealtyTrac began issuing its report in January 2005.

Separately, Honolulu’s median home prices are “back on top” of the nation, Shapiro said, citing a National Association of Realtors report issued yesterday.

Honolulu’s first-quarter median home price was $570,000, “and the next highest was $100,000 below us,” he said.

That would be the $450,000 median in the San Jose-Sunnyvale-Santa Clara, Calif., metro area.

“I was kind of shocked that the switch occurred so rapidly, and it’s not because Honolulu went up; it’s because the other major cities experienced major, major drops,” Shapiro said.

Foreclosures are a factor, as they “compete against existing properties” and are priced at 20 percent below the market, which brings the whole market down, he said.

That enables “akamai” buyers to find “bargain basement prices … but the important point is that properties are still moving here,” Shapiro said.

Another important message, Shapiro said, is that when it comes to home prices, “Honolulu is much more stable than any of the other cities.”

Hawaii foreclosure filings took a breather in April from the previous month but still soared 216.7 percent over the year-earlier period.

The 684 filings last month was a 5.5 percent dip from March, but it still was the second-highest total in more than a year, according to data released today by RealtyTrac, an online marketplace for foreclosure properties.

There were 724 cases in March.

In April 2008 there were 216 filings, according to RealtyTrac’s latest statistics, a slight discrepancy from the 210 that the company reported a year ago.

Daren Blomquist, RealtyTrac’s marketing communications manager, said that when there is a spike one month, such as the more-than-500 percent year-over-year increase posted in March, it is common “for there to be a pullback the next.”

The 5.5 percent month-to-month dip is not necessarily a sign that the trend is reversing, said Harvey Shapiro, research economist with the Honolulu Board of Realtors.

“I wouldn’t put too much into that” decrease, he said. “I think it’s just timing.”

The nearly 217 percent increase “is something to be concerned about, but I still think we’re in better territory than most other cities.”

Hawaii’s lower number of subprime mortgages could be a factor in other states’ rates being higher than ours, Shapiro said.

Last month Hawaii had the 23rd-highest rate of foreclosures among the 50 states, with one in every 741 housing units undergoing some form of foreclosure activity. Hawaii ranked 36th in April of last year.

“Hawaii has been one of the states that’s been posting the biggest increases,” which could be because “a lot of those homes are second homes or are non-owner-occupied, (which) could be skewing the numbers higher,” said Blomquist.

A large percentage of Hawaii’s foreclosure cases, 46 percent, involve second homes or vacation homes that are not owner-occupied. That figure has risen sharply since the last time RealtyTrac checked — it was at 27 percent in October, Blomquist said. The national average is 30 percent.

Nevada, Florida, California and Arizona have led the nation in foreclosure rates for at least a year, Blomquist said.

Nationally the 342,038 foreclosures in April marked a second consecutive month with a record high. One in every 374 housing units was the subject of a foreclosure filing, the highest monthly rate since RealtyTrac began issuing its report in January 2005.

Separately, Honolulu’s median home prices are “back on top” of the nation, Shapiro said, citing a National Association of Realtors report issued yesterday.

Honolulu’s first-quarter median home price was $570,000, “and the next highest was $100,000 below us,” he said.

That would be the $450,000 median in the San Jose-Sunnyvale-Santa Clara, Calif., metro area.

“I was kind of shocked that the switch occurred so rapidly, and it’s not because Honolulu went up; it’s because the other major cities experienced major, major drops,” Shapiro said.

Foreclosures are a factor, as they “compete against existing properties” and are priced at 20 percent below the market, which brings the whole market down, he said.

That enables “akamai” buyers to find “bargain basement prices … but the important point is that properties are still moving here,” Shapiro said.

Another important message, Shapiro said, is that when it comes to home prices, “Honolulu is much more stable than any of the other cities.”

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10 Lending Myths too Many Realty Experts Believe

Published on Thursday, April 16, 2009, 10:57 AM Last Update: 13 hour(s) ago by Mildred Wilkins

Tags: commission myths short sales

Myth #1: That the lender/servicer is obligated to pay you a commission if you have procured a possible buyer through your marketing efforts.

Reality: The servcier may change the amount of commission which you will receive at any time, including just before and up to the time of the closing.

Reality: Maybe you are; maybe you aren’t.  Most importantly, can the person who signed the listing contract afford to pay the commission if the new purchaser does not offer enough to cover all closing expenses, including commission?

Myth #5: That there should be no ethical concern if you inform the co-op agent at the time the lender approves a short sale that there isn’t enough money there to pay the percentage of commission which your brokerage firm advertised.

Reality: If you have advertised a co-op fee to promote the sale of a home, then you should be prepared to pay whatever you advertise.  If you do not do so you are begging to be taken before the Ethics committee.

Myth #6: That it is okay to list a home even though the consumer has filed bankruptcy because the attorney told you (or your client) to do so.

Reality: When a consumer files a bankruptcy petition all creditors are now prohibited from having any interactions with the borrower or their representatives.  All borrower assets (including the aforementioned house) are frozen.  Nothing is to be liquidated without the express approval of the trustee of the court.

Reason: All of the things stated above; additionally, it would be unfortunate for you to have a listing which is a “frozen asset” by a Federal court which someone wrote an offer on. Check the questions on your state “Seller Disclosure Form”: “Is there any threatened or pending litigation?” The trustee may put the consumer into a Chapter 13 or may require they sign a deed-in-lieu.  In either case, there is now no house to be sold.

Myth #7: That the lender should not have anything to say about the short sale transaction since the consumer still owns the house.

Reality: The lender/servicer does not have anything to say about whether or not a borrower sells their home.  They do, however, have a lot to say about whether or not they will release the deed to facilitate such a transaction if they are not being paid the full amount the borrower committed to pay under the terms of the mortgage.

Reason: Quite simply, the borrower MUST have the lender’s approval because the lender is being SHORTED.

Myth #8: That the consumer does not have to worry about a deficiency if the lender agreed to a short sale.

Reality: The fact that a lender/servicer allows a short sale does not automatically grant the consumer protection from a deficiency judgment in the future. The only automatic provision for such protection is if the loan were insured by FHA

Myth #9: That processing a deed-in-lieu of foreclosure is such a simple process that there is no need to involve an attorney and pay their high fees.

Reality:  While the deed-in-lieu process is exceedingly simple (the consumer  simply signs the one-page document produced/presented by the lender, gets it notarized and sends it back) the process has MAJOR, POSSIBLY DIASTROUS consequences for the borrower.  Therefore, it is never a good idea for a consumer to relinquish a property via deed-in-lieu without adequate legal and insurance counsel.  Real estate professionals should have nothing to do with this simple, disaster-prone activity.

a)   Any number of things could happen between the time the borrower MAILS notification of a title transfer to the lender/servicer and the time when that transfer is, in fact, recorded.  The Ohio Attorney General’s Office has shared with me that the office has received numerous complaints of the lender’s failure to do so for MANY months.  In the meantime the borrower remains responsible for any damage, costs, injuries, etc associated with the property.

b)  Lender/servicer may claim to never have received the MAILED deed-in-lieu if the problem which has arisen is a particularly expensive one.

c)  Acceptance of the title to the home does not absolve the consumer of the financial obligation for the full indebtedness; i.e. possible deficiency judgment.

d)  Additionally, there is always the possibility of a tax liability associated with eventual transfer to a new purchaser if the home sells for less than full pay-off plus costs.

The risks are substantial:  Hiring a competent attorney is the only smart thing to do.  REALTORS are advised to keep your nose out of this.

Reality: One of the most common myths out there and nothing could be farther from the truth.  Just because a borrower cannot:

1. find the right office to accept their money
2. pay the 8 months they are behind plus attorney’s fees
3. understand the process well enough to know who to go to when they keep getting snatched around like a rag doll.

Page | US Markets » Residential Real Estate

Foreclosure and Short Sale Discounts Weigh Down Metro Area Median Prices

Posted by NATIONAL ASSOCIATION OF REALTORS 05/12/09 10:00 AM EST

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(WASHINGTON, D.C.) — First-time home buyers responding to improved affordability conditions, and lower prices of foreclosures and short sales, impacted metropolitan area median home prices in the first quarter, while existing-home sales remained sluggish in many parts of the country, according to the latest survey by the National Association of Realtors.

With first-time buyers accounting for half of all purchases during the first quarter, 134 out of 152 metropolitan statistical areas reported lower median existing single-family home prices in comparison with the first quarter of 2008, while 18 metros had price gains.

Many buyers sought deeply discounted distressed sales - foreclosures and short sales - which accounted for nearly half of transactions in the first quarter and weighed down median home prices in most markets.

The national median existing single-family price was $169,000, which is 13.8 percent below the first quarter of 2008 when conditions were closer to normal.  The median is where half sold for more and half sold for less, but distressed homes typically are selling for 20 percent less than traditional homes and are downwardly skewing median prices.

Charles McMillan

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said there are two levels of pricing in the current market. “Traditional homes in good condition have held their value much better, so owners shouldn’t be overly concerned about median prices.  Most sellers can expect a good return if they’ve been in their home for a normal period of homeownership and haven’t excessively tapped their equity,” he said.

“Given the unusual mix of conditions around the country, the expertise and negotiating skills of a Realtor® have never been more important,” McMillan said.  “Unparalleled knowledge of local markets is crucial for consumers.”

Total state existing-home sales, including single-family and condo, were at a seasonally adjusted annual rate of 4.59 million units in the first quarter, down 3.2 percent from 4.74 million units in the fourth quarter, and are 6.8 percent below the 4.93 million-unit pace in the first quarter of 2008.

Seventeen states experienced sales increases from the fourth quarter, and six states were higher than a year ago; complete data for one state was not available.  Sales in the first quarter do not reflect an impact from the first-time home buyer tax credit.

Lawrence Yun, NAR chief economist, sees the market in a lull before an upturn.  “Over the past couple months, contract activity for home sales, buyer traffic and inquiries about the $8,000 tax credit have all increased,” he said.  

Lawrence Yun

“Close to 455,000 buyers purchased their first home during the first quarter, and those are likely just the first wave of new buyers coming into the market - they’re critical for a housing recovery,” Yun said.   “Housing affordability conditions are at record high levels and we expect a measurable increase in home sales during the second half of the year, which would help stabilize prices in most areas.”

According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage fell to a record low 5.06 percent in the first quarter from 5.86 percent in the fourth quarter; the rate was 5.88 percent in the first quarter of 2008.

Yun said some areas showed dramatic drops in home prices.  “In areas with the biggest price declines, we also see much higher levels of distressed sales which are distorting the data,” Yun said.  “We are very much in a bifurcated market with sharp differences between foreclosures and short sales on one hand, and traditional homes on the other.  In many cases homes are selling below replacement construction costs, which speaks to great value in the current market.”

There were bright spots in the first quarter.  The largest sales gain from a year ago was in Nevada, up 116.8 percent, followed by California which rose 80.6 percent, Arizona, up 50.2 percent, and Florida with a 25.0 percent increase.  Virginia and Minnesota also experienced double-digit sales increases.

The largest single-family home price increase in the first quarter was in the Cumberland area of Maryland and West Virginia, where the median price of $114,900 rose 21.1 percent from a year ago.  Next was the Davenport-Moline-Rock Island area of Iowa and Illinois at $100,300, up 13.8 percent from the first quarter of 2008, followed by Columbia, Mo., where the median price increased 6.0 percent to $152,600.

Median first-quarter metro area single-family home prices ranged from a very affordable $30,300 in the Saginaw-Saginaw Township North area of Michigan to $570,000 in Honolulu.  The second most expensive area was the San Jose-Sunnyvale-Santa Clara area of California, at $450,000, followed by the Anaheim-Santa Ana-Irvine area of California at $435,800.

Other affordable markets include Akron, Ohio, at $50,100, and the Youngstown-Warren-Boardman area of Ohio and Pennsylvania at $51,200.

In the condo sector, metro area condominium and cooperative prices - covering changes in 56 metro areas - showed the national median existing-condo price was $172,800 in the first quarter, down 20.2 percent from the first quarter of 2008.  Five metros showed annual increases in the median condo price and 51 areas had declines.

The strongest condo price increases were in Portland-South Portland-Biddeford, Maine, at $196,900, up 11.2 percent, followed by the Wichita, Kan., area, where the median condo price of $113,900 rose 6.8 percent from the first quarter of 2008, and Bismarck, N.D., at $132,400, up 6.0 percent.

Metro area median existing-condo prices in the first quarter ranged from $75,200 in Las Vegas-Paradise, Nev., to $345,900 in San Francisco-Oakland-Fremont.  The second most expensive reported condo market was Honolulu at $300,000, followed by the New York-Wayne-White Plains area of New York and New Jersey at $282,300.

Other affordable condo markets include the Palm Bay-Melbourne-Titusville area of Florida at $90,600 in the first quarter, and the Sacramento-Arden-Arcade-Roseville area of California at $93,800.

Regionally, existing-home sales in the Northeast fell 10.3 percent in the first quarter to a pace of 693,000 units and are 20.1 percent below a year ago.

The median existing single-family home price in the Northeast declined 15.9 percent to $235,500 in the first quarter from the same period in 2008.  The best gain in the region was in Syracuse, N.Y., where the median price of $113,700 rose 3.1 percent from the first quarter of 2008, followed by Buffalo-Niagara Falls, N.Y., at $99,200, up 2.7 percent, and Binghamton, N.Y., where the median rose 0.5 percent to $110,300.

In the Midwest, existing-home sales slipped 2.2 percent in the first quarter to a pace of 1.04 million and are 13.1 percent below a year ago.

The median existing single-family home price in the Midwest was down 6.8 percent to $132,400 in the first quarter from the same period in 2008.  After Davenport-Moline-Rock Island and Columbia, the next strongest metro price increase in the region was in Springfield, Ill., where the median price of $111,400 was 3.9 percent higher than a year ago, followed by Topeka, Kan., at $106,500, up 3.1 percent, and Bloomington-Normal, Ill., at $153,800, up 1.9 percent.

In the South, existing-home sales declined 2.5 percent in the first quarter to an annual rate of 1.70 million and are 12.7 percent lower than the same period in 2008.

The median existing single-family home price in the South was $146,600 in the first quarter, down 10.8 percent from a year earlier.  After Cumberland, the strongest price increase in the region was in Beaumont-Port Arthur, Texas, with a 5.0 percent gain to $129,100, followed by Oklahoma City, at $129,900, up 4.0 percent, and Shreveport-Bossier City, La., at $136,000, up 3.4 percent.

Existing-home sales in the West slipped 0.9 percent in the first quarter to an annual rate of 1.16 million but are 24.3 percent above a year ago.  

The median existing single-family home price in the West was $237,600 in the first quarter, which is 19.8 percent below the first quarter of 2008.  The strongest price gain in the West was in the Salt Lake City area, where the median price of $230,100 rose 1.9 percent from a year earlier, followed by Farmington, N.M., at $191,200, up 0.7 percent.

The National Association of Realtors, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

For more real estate industry news and trends from the National Association of REALTORS, visit www.Realtor.org.

Realtor ranks shrinking

License renewals dropped by 21 percent for 2009-2010 period

By Nina Wu

POSTED: 01:30 a.m. HST, Jan 28, 2009

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It’s tough to make the cut as a real estate agent these days.The rank and file of Realtors in the isles are diminishing as the real estate market slows down, and competition gets stiffer.

The Hawaii Real Estate Commission saw a 21 percent decline in license renewals this year, with only 17,325 issued for 2009-2010, 4,659 less than the last renewal year period of 2007-2008.The licenses, both active and inactive, must be renewed every even-numbered year. The deadline to renew was Dec. 31, 2008, at a cost of $180 ($153.50 if done online). But those numbers may not reflect the worst downturn in the market — yet.

Membership at the Honolulu Board of Realtors, as well as neighbor isle boards, are also expected to drop anywhere from 10 to 20 percent this year.

While it is a career with a high turnover rate, a slowdown in the market makes it that much tougher to survive. Deals are no longer falling into anyone’s lap, and dabblers and part-timers typically drop out.

Bill Chee, chief executive of Prudential Locations, cited the following 2008 statistics as an example of the cutthroat business. Of all Honolulu board Realtors, 44 percent made no sales, and only 18 percent made one sale, last year.

“Even in an up cycle, a neighborhood of 25 percent don’t make a sale,” said Chee. “There are few really successful people in the business.”

Those numbers mean the majority of real estate agents have no cash flow, said Abe Lee of Abe Lee Realty. One sale is not likely to cover costs, said Lee.

Nevertheless, Lee encourages students who have completed his course to enroll in his referral program as an alternative. To be in the program, individuals must have an active real estate license, but won’t have to pay board membership fees or insurance.

Instead of showing homes or writing up contracts, they simply refer potential clients to agents, and get a small commission if the deal closes.

Lee is hoping to grow the program in the next five years — even offering to foot license fees along with complementary continuing education courses if a member makes a successful referral once every two years.

Enrollment in classes at Coldwell Banker has dropped slightly, according to president Chason Ishii, but those that are coming are more serious than during the boom.

“If you can be successful in this market, you will be successful going forward,” said Ishii. “If you’re joining in an up market, it tends to give you a false sense of security and create bad habits.”

The majority of top producers at Coldwell Banker today, he said, started in a down cycle. The firm still has about 475 agents today.

“To make it today, you have to be a hunter, not a harvester,” he said. “You have to be proactive, not passive and reactive.”

At Century 21 All Islands, tougher times resulted in the closure of four offices last year, leaving the company with 10 in the state. Century 21 last year closed offices in Hilo and Kona on the Big Island, Koloa on Kauai, and Kailua on Oahu.

The company also lost about 100 real estate agents, leaving it with a solid 350 statewide, according to chief executive Jim Wright.

However, the referral program tripled in the last year. There are still students enrolling in Century 21’s pre-licensing courses — though fewer — and some new agents coming on board.

The upfront investment is significant — at least $2,500 for the license, membership, insurance and other costs, plus he recommends having at least six months of living expenses in the bank.

Wright considers a newly minted Realtor in this market to be tried-and-true.

“If you start in this market, you learn much better and develop your craft much better,” he said.

It’s tough to make the cut as a real estate agent these days.

The rank and file of Realtors in the isles are diminishing as the real estate market slows down, and competition gets stiffer.

The Hawaii Real Estate Commission saw a 21 percent decline in license renewals this year, with only 17,325 issued for 2009-2010, 4,659 less than the last renewal year period of 2007-2008.

The licenses, both active and inactive, must be renewed every even-numbered year. The deadline to renew was Dec. 31, 2008, at a cost of $180 ($153.50 if done online). But those numbers may not reflect the worst downturn in the market — yet.

Membership at the Honolulu Board of Realtors, as well as neighbor isle boards, are also expected to drop anywhere from 10 to 20 percent this year.

While it is a career with a high turnover rate, a slowdown in the market makes it that much tougher to survive. Deals are no longer falling into anyone’s lap, and dabblers and part-timers typically drop out.

Bill Chee, chief executive of Prudential Locations, cited the following 2008 statistics as an example of the cutthroat business. Of all Honolulu board Realtors, 44 percent made no sales, and only 18 percent made one sale, last year.

“Even in an up cycle, a neighborhood of 25 percent don’t make a sale,” said Chee. “There are few really successful people in the business.”

Those numbers mean the majority of real estate agents have no cash flow, said Abe Lee of Abe Lee Realty. One sale is not likely to cover costs, said Lee.

Nevertheless, Lee encourages students who have completed his course to enroll in his referral program as an alternative. To be in the program, individuals must have an active real estate license, but won’t have to pay board membership fees or insurance.

Instead of showing homes or writing up contracts, they simply refer potential clients to agents, and get a small commission if the deal closes.

Lee is hoping to grow the program in the next five years — even offering to foot license fees along with complementary continuing education courses if a member makes a successful referral once every two years.

Enrollment in classes at Coldwell Banker has dropped slightly, according to president Chason Ishii, but those that are coming are more serious than during the boom.

“If you can be successful in this market, you will be successful going forward,” said Ishii. “If you’re joining in an up market, it tends to give you a false sense of security and create bad habits.”

The majority of top producers at Coldwell Banker today, he said, started in a down cycle. The firm still has about 475 agents today.

“To make it today, you have to be a hunter, not a harvester,” he said. “You have to be proactive, not passive and reactive.”

At Century 21 All Islands, tougher times resulted in the closure of four offices last year, leaving the company with 10 in the state. Century 21 last year closed offices in Hilo and Kona on the Big Island, Koloa on Kauai, and Kailua on Oahu.

The company also lost about 100 real estate agents, leaving it with a solid 350 statewide, according to chief executive Jim Wright.

However, the referral program tripled in the last year. There are still students enrolling in Century 21’s pre-licensing courses — though fewer — and some new agents coming on board.

The upfront investment is significant — at least $2,500 for the license, membership, insurance and other costs, plus he recommends having at least six months of living expenses in the bank.

Wright considers a newly minted Realtor in this market to be tried-and-true.

“If you start in this market, you learn much better and develop your craft much better,” he said.

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Bankruptcy filings ease after March’s record high

The bulk of the filings in April were by people seeking to liquidate

By Erika Engle

POSTED: 01:30 a.m. HST, May 01, 2009

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A total of 249 bankruptcy cases were filed last month in Hawaii compared with 158 cases in April 2008 — a nearly 58 percent increase.

But last month’s total was an 8 percent drop from March’s 270 total cases — the most monthly bankruptcy filings since October 2005, according to records from federal court.

The bulk of April’s filings were the 191 Chapter 7 liquidation cases.

Although businesses can file Chapter 7, most of the cases filed last month were filed by individuals and couples.

Chapter 7 cases rose 54 percent over the 124 filings in April 2008.

The sole Chapter 11 business reorganization case last month was filed by Reliable Foods Inc. of Maui.

The most dramatic jump in filings, 72.7 percent, came with the 57 Chapter 13 cases, which allow individuals with regular income to establish plans to pay creditors over time.

The cases marked a sharp increase over the 38 Chapter 13 filings in March.

The last time so many Chapter 13 cases were filed in a single month was last September.

Since 2004, the only month that saw a higher number of Chapter 13 cases was October 2005, when 86 cases were filed.

That month there was a rush to file before a new law took effect making it costlier and more difficult to seek bankruptcy relief, and 1,463 cases were filed.

A total of 249 bankruptcy cases were filed last month in Hawaii compared with 158 cases in April 2008 — a nearly 58 percent increase.

But last month’s total was an 8 percent drop from March’s 270 total cases — the most monthly bankruptcy filings since October 2005, according to records from federal court.

The bulk of April’s filings were the 191 Chapter 7 liquidation cases.

Although businesses can file Chapter 7, most of the cases filed last month were filed by individuals and couples.

Chapter 7 cases rose 54 percent over the 124 filings in April 2008.

The sole Chapter 11 business reorganization case last month was filed by Reliable Foods Inc. of Maui.

The most dramatic jump in filings, 72.7 percent, came with the 57 Chapter 13 cases, which allow individuals with regular income to establish plans to pay creditors over time.

The cases marked a sharp increase over the 38 Chapter 13 filings in March.

The last time so many Chapter 13 cases were filed in a single month was last September.

Since 2004, the only month that saw a higher number of Chapter 13 cases was October 2005, when 86 cases were filed.

That month there was a rush to file before a new law took effect making it costlier and more difficult to seek bankruptcy relief, and 1,463 cases were filed

Crescent Communities Releases Hottest Home-Building Trends for 2009

by Peter L. Mosca

Crescent Communities identified the hottest new home trends expected for 2009 after compiling information from buyers and prospects in all its Charlotte-area luxury communities.

“These are the most requested items from our discriminating buyers,” said Craig Martin, sales manager for Crescent Communities. “These trends are reflected in the custom and Ready to Customize (RTC) homes being built in our communities.”

Here are the top nine trends expected in 2009:

Less Square Footage: Buyers are examining their lifestyles and the most important aspects of their new homes. The result is a smaller home that maximizes the square footage. But, a smaller home does not mean sacrificing on luxury. You’ll find that these homes still have expected luxury features — granite countertops, top-of-the-line appliances, upgraded trim packages and luxurious owners’ baths. Even in the largest, most luxurious homes, you’ll find that one room or more has been eliminated to reduce the square footage.

Room to Store: In the old days, closets were scarce. As the years have progressed, homeowners have demanded more storage space. The trend is for bigger, walk-in closets with built-in storage systems and packing islands. The idea is to avoid wasted space and maximize the square footage of the home. Built-in niches and attic storage rooms provide a purpose for otherwise unusable space.

Outdoor Living: The past few years have seen a steady rise in the popularity of outdoor living space. This trend doesn’t seem to be going anywhere anytime soon. It’s especially true in the South, where suitable outdoor space can be used for at least three seasons. And, many homeowners are requesting screened porches so they can enjoy the outdoors as long as possible. Others request open patio areas that feature fireplaces and built-in kitchens.

Universal Design: Features like sunken living rooms, spiral staircases and tall cabinets were once popular, but those days seem to be behind us. Today’s homes (and likely tomorrow’s) are easy to move around in, regardless of the physical limitations you or your family members might have. Wider hallways and doors, fewer stairs (and even elevators in larger homes) seem to be standard. Architects often use the phrase “universal design” to describe homes with features like these because they are comfortable for people of all ages and abilities.

Designing for Women: It’s no secret that women are the driving force behind most home-buying decisions. So, it stands to reason that homes are designed around features that are important to the fairer sex. Drop zones help keep the home’s main spaces free of clutter. Extra-large laundry rooms, luxurious spa-like owners’ baths with inviting tubs and state-of-the-art security systems are features important to women.

Green AND Healthy Homes: Buyers are increasingly savvy to environmental friendliness as it pertains to their homes. The green movement is not only a trend, it’s becoming more of “the norm.” Buyers are seeking improved ways to make their homes more efficient and reduce utility costs. And, buyers are ready to go a step further. The use of paints with low levels of volatile organic compounds (VOCs), carpets that emit no or lower gas levels and recycled materials on the job site all help make a healthier home. Also, a better insulated home not only saves energy, but it also keeps dangerous allergens out of the home, thereby helping to keep your family out of doctors’ offices and drug stores.