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March Madness in Oahu Hawaii Real Estate!

By
Real Estate Agent with Coldwell Banker Pacific Properties RS-48250

I can't believe it's April already! I'm seeing a definite shift in market activity here on Oahu. At least we are getting faster responses from sellers on offers we put in representing the buyers. The sellers are realizing that the market is still sluggish and if they don't want to hang on to their property for several months (while inventory is high and better priced properties are selling)...they need to jump on it.

With so much inventory on the market the sellers don't have the luxury of overpricing their properties.

March numbers are in and we still have a lot of single family homes and condos on the market, 1,901 and 2,582 respectively for a total of 4,483 units. That is a total of 15.5 months of inventory if no new homes come on the market, and last month another 489 SF and 709 condos joined the party. Only 188 homes and 248 condos sold. Homes are sitting on the market for less time than the first two months of '09 which reflects pricing more appropriate to market demand as opposed to being overpriced.

Sales are up over the first two months of the year. This indicates to me that buyers who have been sitting on  the fence to see how low the market will go have realized that if they can qualify and are ready to buy, THEY need to jump on it.

What buyers REALLY need to jump on right now is the First Time Homebuyer Tax Credit of $8,000. Buyers must not have owned a home for the past three years to qualify as a "first time buyer" and they are entitled to an $8,000 ( or 10% of the homes value, whichever is less) refund on their 2008 or 2009 taxes. To qualify, the purchase must be made between January1, 2009 and November 30, 2009. Some people think it's December 31 but that is incorrect.

Over on the Commercial leasing side office vacancy continues to rise Downtown to around 10%. Any time you have a vacancy rate close to 10% and up you have a tenants market. And the tenants are certainly calling the shots these days! Depending on the building, I'm seeing free rent, build out allowances and all sorts of goodies tenants were not able to get since the mid 1990s.

Class A office space is running around $1.30-$1.80 per square foot per month plus Common Area Maintenance. Average CAM charges rose by 4 cents to $1.18 per square foot, from $1.14 per square foot three months ago, a 3.5 % increase. Parking runs anywhere from $135 unreserved to $300 reserved per stall per month. I'm seeing some bargain basement prices on some nice subleases as companies are reducing their square footage or simply closing their doors.

Retail is very soft; there are a lot of vacancies. Small strip malls across the state have an average vacancy rate of 9 %. Retailers are continuing to struggle with losses and many are going out of business entirely. Some are just walking away from their leases and letting the chips fall where they may, particularly in the big malls that charge high overhead.

Even some of the Big Dogs are biting the bullet: Niketown in Waikiki is selling its flagship building and Chicago-based General Growth Properties just filed Cahpter 11. In Hawaii, General Growth owns Ala Moana Center, the largest open-air shopping mall in the world, and Ward Centers. These are two of the largest shopping centers in the state. And if you stroll around either one of them, you'll see quite a few empty stores...

Industrial is always a winner here because we don't have much land to sprawl out on, and really tight zoning keeps growth to a minimum. So we are getting roughly $.85- $1.50 per square foot. Some a little lower, some a little higher depending on the property and the use.

That's all for now. It's too nice a day here is beautiful Hawaii to be at  a computer!

Aloha,

Biz

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