When you analyze the number of condo sales in Waikiki since the beginning of 2008, it's easy to see that sellers are realizing that it is more and more of a buyer's market these days.  It's taken some time, especially since Waikiki is very well balanced in terms of risk due to its exposure to buyers from all over the world.  I like to think of Waikiki as the "melting pot" of the Pacific which protects it from some dramatic losses that areas of the mainland are experiencing.

I've pulled in all the fee simple condo sales in Waikiki from the beginning of 2008 until the day of this blog.  I could analyze Waikiki based upon several factors, but the one factor that always gives you a finger on the pulse of real estate is the sales price.  However,  the sales price alone doesn't tell you much.  I could compare it to the sales price from a year ago, but that only really works if everything remains the same (i.e. no new buildings were built or no buildings converted from Leasehold to Fee Simple).  So, I figured what better way to analyze what's really happening in real estate then to compare it to the psychology of the seller.  Well, you're probably asking how I do that.  It's not as hard as you think, but it's not as deep as you might think either...

Every Seller I've ever met in my life has always cared the most about one thing more than any other thing when selling.  That one thing is Price.  They want the best price they can get for their particular scenario.  Most people have sold a property before, and if you've ever sold in a normal market or less than normal market than you're probably familiar with lowering the sales price of your property.  It's the point where you realize that you probably are not going to get what you want and that you're hoping to reduce your price as little as possible to where a willing buyer will buy your property.  When you get to that point you've just arrived at my theory about finding out what's happening in real estate by analyzing the psychology of the seller.  This is the point at which the seller (generally with reluctance) decides to give up on selling their property at a certain price and adjusts it to what they feel is a fair price.  This process could keep happening over and over until the seller finally gets to a sales price where a willing buyer commits to purchasing their property.  So, with that I bring you the numbers.

I have access to the original list price at which the seller first listed their property for.  I also have access to what the list price was at the time the seller accepted an offer from a buyer.  That list price is not always what the seller received.  To get the final price we need to add in the final sales price.  Without further ado... the results:

What can you take from this?  As you can see the average seller started out at $407,210 and then along the way has discounted their property 1 or more times for a total of 4.42% to $389,216, until they finally accepted an offer.  That offer came in another 3.91% lower than what they had their property priced for sale at the time they accepted that offer.  In total, the average seller in Waikiki this year has come down 8.16% from their original listing price. 

What does this all mean?  It means that this little melting pot of the Pacific is still pretty stable, but sellers are realizing that in order to sell their property they have to come down a little with their prices to find those willing buyers.

If you are looking to buy or sell anywhere in Hawaii please contact me and I will let you know how I go above and beyond for all my clients to make sure your real estate needs are met.  - Mahalo!

Brought to you by:  Rob Gerichs - RE/MAX Honolulu

Going Above and Beyond

(808) 284-4441 ~ www.HawaiiRob.com ~ Rob@HawaiiRob.com

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