Multiple Offers Demonstrating Strength Of Hawaii Market
The Hawaii real estate scene continues to sizzle with new listings “flying off the market” after the first open house and multiple offers coming in at over asking prices.
And, in most cases, the condos and single family homes generating the excitement are not what would ordinarily be described as “hot” properties.
Most of the action is occurring at price points below $800,000 and in neighborhoods convenient to commercial centers, schools, and other amenities. Features such as size and condition of the home, and, in the cast of single family homes, lot size, do not generally seem to be driving the enthusiasm of buyers lining up to sign purchase contracts.
Prudential Locations real estate agent Bob Cowan recently listed two single family homes, one in Moanalua Gardens and the other in Aina Haina, and received, respectively, 26 and 23 offers. “The Moanalua Gardens home, listed at $635,000, is a four bedroom, two and a half bath, approximately 40 year old home on a 6,876 square foot lot with some ocean view. It’s well maintained but in original condition…kitchen and baths had not been updated. When we first listed it about a month ago, we had multiple requests for showings from other agents. We held one broker’s open and one open house, had 40 to 50 groups come through, and about 30 agents showed it. It reminded me of the kind of activity we had back in 2004 and 2005. Within five days we had 26 offers, one was accepted by the owner, whom we presented with two backup offers, and the home is now in escrow.
“When I listed the Aina Haina home, which was priced at $749,000, I had 30 or 40 requests from other agents to show it in the first week. When we did show it, 70 to 80 groups came through. One of the 23 offers we received was sight unseen. This is a three bedroom, two bath home built in the 1950s and well maintained with some updating.
“Just about all the buyers who placed the offers on these homes were well qualified, solid buyers. A number of them told us they are checking the listings daily, keeping in close touch with their real estate agent, and literally scouring the area from Hawaii Kai to metro Honolulu.”
Larry Saito, an agent with Hawaii Resource Realty, recently went into escrow after nine offers on an 80 year old home in lower Manoa priced at $798,000. “This is a two story home on an average size lot that drew a mixture of offers including cash and financing. We showed the home to about 50 groups in one week, and what the prospective buyers, mostly business people, indicated attracted them was the location. A home that’s priced right in a good location will sell quickly in this market.”
Windward properties are also bringing multiple offers. Coldwell Banker Pacific Properties agents Mary and Chris Beddow received five offers on a one bedroom, one bath townhome in Haiku Point priced at $249,000 after holding one broker’s open. “We didn’t even hold an open house and the last sale of a comparable property was about $9,000 less. Anything priced under $300,000, regardless of size, will probably sell fast. The first time home buyers and the investors as well are out there looking to buy while the interest rates are still low. People recognize that real estate is a good investment in this economy and that Windward Oahu is one of our most consistently strong markets.” Realtor Chrystal S. K. Wong of Palace Realty this month listed an Enchanted Lake single family, three bedroom, two bath 48 year old home at $610,000 and sold it after only a few days on the market at $651,000. “We had over a dozen offers on this home,” Wong said. “Over 100 agents came to our one and only broker’s open, the owner accepted the best offer, and we immediately went to closing. I think that makes a strong statement about our Oahu marketplace today.”
The opportunities represented by short sales and foreclosures are also contributing to the brisk market activity. Adrienne Lally of RE/MAX Honolulu, who works with a team that specializes in short sales and distressed properties, has recently listed a one bedroom, one bath unit with an ocean view in the Ilikai at $259,000 for an owner who utilizes it as a vacation rental. “Rather than risk foreclosure, the owner has decided to go to a short sale. So far we have had 11 offers and they are continuing to come in. We’ve found that buyers who will place an offer on a short sale are willing to wait…the transactions are more complicated than with a traditional sale.”
Property Profiles President Berton Hamamoto, Past President of the Honolulu Board of Realtors and President Elect of the Hawaii Association of Realtors, said multiple offer activity has accelerated over the past month. “Although buyer response to listed properties varies by area, I believe realistic pricing is the key to a fast sale. We recently listed a single family older home in Waianae at $375,000 and went into escrow after one week. We are also getting multiple offers on a newer home in Kapolei that we just listed at $429,000.
“How quickly the transaction is finalized is often determined by the goals of the seller. Sometimes sellers want to wait for the best possible offer to come in and delay accepting offers until they get the highest possible price.
We often have to tell them that although inventory is down, the buyers may not choose to wait around for a decision if something else that looks good to them is available.
“Sellers are also concerned about the quality of the offers they receive. When we receive multiple offers for our client, we advise them to choose what appears to be the best one, but also try to provide them with back-up contracts. If the accepted offer falls through, we then go to the buyers we placed in back-up position and with whom we have also negotiated price and terms. Generally, when you have multiple offers at the same level, priority will go to the stronger buyer with the highest down payment. However, there can also be extenuating circumstances. We worked with a seller who accepted a lower offer simply because the buyer needed an apartment for their daughter so she could go to school in a particular school district -they sympathized with the buyer. Military sellers will often bend over backwards to accommodate military buyers.
“It’s important for sellers to understand that, even when they are experiencing a ‘feeding frenzy,’ how you handle the multiple offers is of critical importance. The school of fish will leave and move on to something that may be more appetizing if they perceive they are getting the run around. You may end up losing all your momentum and buyers and may have to drop the price to regenerate interest all over again. My advice to sellers placing a property on the market that has the likelihood of generating multiple offers is to work with an experienced real estate agent who will both understand timing strategy and be able to recognize the best deal when it comes along.”
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