Mid-Year Oahu Report – 2009

• Click Here to download the 2009 Mid-Year Oahu Real Estate Report.
• For the rolling three-month period of April through June 2009, number of sales are down 10.9% for single-family homes and 27.6% for condominiums compared to the same period in 2008. However, the number of sales in the 2nd Quarter have increased over the 1st Quarter of 2009 for both single family homes and condominiums.
• Oahu median prices have also declined compared to the same rolling 3-month period last year. Median prices for single-family homes dropped 10.5% to $637,000 and condominiums have dropped 5.5% to $328,000. 

Technology is a culture

 

Amongst all of the challenges facing brokers in this market e.g. controlling costs, getting agents back to basics, recruiting, branding,  etc… , the most daunting and expensive challenge for many of us  is technology.   As the industry shifts marketing dollars from print media to online media, many brokers in our industry hesitate on where to start.   Do you make-over the website? Start a paid search campaign? Invest in a blog?  Test out Facebook? Integrate your website with your back-office?  

The risk and reality is that most Gen X and Gen Y buyers don’t use their “family broker”.  So where will your business land when the market recovers? That’s a tough questions because many broker/owners in this market are focusing on their own personal production to cover monthly expenses.  However now is the time to invest and prepare for the next cycle.  

Our industry is faced with the challenge that technology is no longer a one-time investment in a “nice” website and a few google campaigns.  Rather, technology has become a culture in our industry, because our clients and and our agents require that from us.  If technology is a culture of continuous investment, then you would agree that the cost of business and barriers to entry only increase, right?

 A bulk of our technology culture, at Prudential Locations,  is focused on customer intelligence, agent tools, and back-office productivity.  The result is that our agents know more about their clients, and our clients know more about their neighborhood and the sales process.  However, when one project is completed, several more fill the pipeline because the needs of our clients and agents continously evolve. 

Now lets suppose you increase your investment in online advertising and technology infrastructure.  The hard part isn’t capturing the lead, but tracking it and keeping yourself and your agents accountable to incubate and close the opportunity.  But that’s a whole other story.

Oahu Real Estate Report for January 2009

• Click here: January 2009 OREO to download the January 2009 Oahu Real Estate Report.
• For the current three-month period, Oahu real estate sales for single-family homes and condominiums are down 34.1% and 45.1% respectively, compared to the same period last year.
• Median sale prices are down 1.6% for single-family homes and down 6.3% for condominiums for the same rolling three-month period.
• Single-family home prices in the areas of Nuuanu-Makiki and North Shore have shown continual increases over the past three months, and for condominium prices, the areas of Downtown-Nuuanu and Kailua have shown significant price increases as well.
• This month’s report features information on how Seller’s can win in the current Buyer’s Market. Read more below to find out how and why.

   

2009 – State of Real Estate Report

Here are highlights from the report:

• Download Here: 2009-oahu-real-estate-forecast
• 2008 ends with 27% fewer sales than a year ago.
• Renters have more buying power in 2009.
• Low interest rates and higher inventories help owners upgrade.

Realogy reports losses

Realogy, the parent company of Coldwell Banker, Century 21, ERA, Better Homes, and Sotheby’s, reported a loss of $50 million in the third quarter of 2008.  For the twelve month period, ending September 30, 2008, that brings Realogy’s total losses to $803 million.  Basically Realogy was purchased through a leveraged buyout by the Apollo Management Group in 2007 for $6.5 billion. 

Now Realogy is sitting on a few billion dollars of debt.  In fact, they paid more than three times the amount on their interest alone ($153 million) than marketing ($50 million) in the third quarter.  If their earnings continue to drop they may be in violation of their credit agreements, which could accelerate the due dates on their loans.  Nevertheless, Realogy obviously has talented managers and agents amongst their corporate owned and franchise companies. 

Locally, CB Pacific Properties has a strong presence in many regions with dozens of well respected agents.  It is also important to note that Realogy’s troubles do not reflect the health of any of their independently owned franchises in Hawaii.  The local Realogy franchises are full with talent and expertise.  However, as a brokerage community, we are of course concerned about Realogy as a whole. At the very least we should be aware of how they manage this challenge.   For more data read the following:

• http://biz.yahoo.com/bw/081105/20081105006274.html?.v=1
• http://blogs.wsj.com/deals/2008/03/26/debt-junkies-realogy-pays-off-debt-with-yet-more-debt/?mod=WSJBlog
• http://www.realogy.com/media/pr/show_release.cfm?id=635

Third Quarter Report – Oahu Real Estate

Here are the September 2008 highlights:   

• Download Here: Third Quarter Oahu Report
• Home prices experienced a dip of about 3.8% to $625,000, and condominium median prices decreased by 1.5% to $325,000 for the first time this year compared to last year’s levels.
• Several neighborhood areas saw a considerable increase in median prices in the past three months for single-family homes and condominiums.
• September’s report also spotlights how changes in the real estate market affects the roles of buyers, sellers, homeowners, renters, flippers and long term investors.  

“O Canada”

Looks like Canada is not only interested in US real estate but also US corporations.  Today, Canada based Brookfield Residential Property Services, entered into an agreement to purchase GMAC Home Services LLC, which includes GMAC Global Relocation Services, GMAC Real Estate and GMAC Home Services Mortgage.  The merger will create one of the largest relocation companies in the world and will give Brookfield an attractive anchor in North America.  The state of our economy has reached the point when our friendly neighbors to the north need to participate in the bail out. Not good.

August – Oahu Real Estate Report

 

• Download Here: oahu-real-estate-report-aug-2008
• Real estate sales for single-family homes and condominiums are down in just about all areas on Oahu.
• Median prices continue to fluctuate by specific neighborhoods.
• Single-family home median prices for the past three-month period compared to the same period last year are down 5.2%
• In contrast, condominium median prices for the past three-month period compared to the same period last year are flat at -0.7%.
• August’s report also provides insight into the current government take over of Freddie Mac and Fannie Mae and what it means for buyers.

100% of Nothing

 

As I meet and speak with broker/owners in our market, I am continually alarmed by how much agents focus on their commission splits versus their clients.  Clients will expect new levels of service in this market and in the future.  It is a knee jerk reaction and a detrimental career move for agents to focus on high splits. 

Brokers painfully know this reality as volume continues to decrease and agents demand a larger piece of the pie.  The end result: Agents get less broker support, Broker’s profit margins dwindle, and clients get lost in the middle.  As an agent, if you are earning 100% of nothing, you might want to reconsider your career choice; next stop could be inactive status. Focus on the support your clients need first, and the income will follow.

Real Estate helps Google thrive.

While our industry feels the pressure on profits, we have all collectively (through competition) helped Google reach record earnings.   Google’s 2nd Quarter 2008 revenues were up 39%  to $5.37 billion.  Paid click advertising was up 19% from 2nd quarter of 2007.  Many brokers are throwing their ad budgets at Google paid advertising and expect magic results. 

The problem isnt in generating a click, conversion, and lead. The challenge is the follow-up process and incubation period of an online lead.  Creating an online marketing strategy is expensive and requires a large committment. Creating a pretty website and bidding on a few dozen keywords on Google, Yahoo, and MSN isn’t going to pay the bills.