As we had predicted a couple months ago, the Oahu housing market finished the year very strong. In December, there were 306 Single family sales, which was up 12.5% from last year.  For the year, there were 3051 sales, compared to only 2690 sales in 2009.

Condo sales did well too, though December was down by 9 sales compared to December '09, the 2010 total was up 10.3% to 3934 condo sales on Oahu.

The median price of Oahu homes was also up to $587k in December, compared to $555k at the same time last year. That is a 5.8% increase, and year over year, the prices were up 3.1% to $592,750.  I would say that all over Oahu, prices were steadily rising all year and continue to do so now.

Oahu condo prices had a $303k median, up just 0.2% since last year. Not entirely sure why condo prices didn't do as well as homes, though I would gues that there were a lot of foreclosures on Ewa Beach condos.

December Pending Sales: This number is the best predictor for the following 2 months, and the number was looking strong, with 234 pending single family sales, which is up 20% from last December.

Pending sales of condos were up 25.1% to 329.  A pretty huge increase, which means January and February should be very strong as well.

Days on Market: It took just 36 days to sell a house on Oahu in December, and 42 days to sell a condo. Those numbers are just slightly up from last year, which may mean the market is a tad slower.

Average percentage of list price received: The average Oahu home seller got 95.6% of the list price, and condo sellers got 94.4%. Roughly the same as last year. This is a great indicator of what buyers think the market is doing. When this number is low, buyers are trying to get a great deal because they believe the market is falling.  At 95% or better, it means buyers are anxious to buy. 

Inventory of Oahu real estate - Down 10% to 1301 homes while Oahu condos are down to 1874, a 3.7% decrease. There continues to be a decline in available homes. Every buyer I am working with is having a hard time finding a home they like.  A lot of the inventory right now is junk - needing total renovations just to be livable.  If you have  a nice condition home, it should sell quickly unless it's way overpriced. 

Bottom line is that Oahu real estate is still looking strong for 2011. The only variable right now is interest rates. Hopefully they stay low, but they can't stay this low forever. In fact rates are up from the low 4's to about 4.75% right now.  Which, by the way, is still ridiculously low. 

CNBC gave Honolulu some nice publicity:

"While Hawaii in general has a unique air concern known as VOG (volcanic smog) that can affect health, Honolulu regularly makes lists of greenest and cleanest cities, and Sustain Lane ranked it the best city for air quality."

Actually what they don't realize (probably) is that VOG is a problem mostly in Kona, on the Big Island, not in Honolulu.  The only time Honolulu has any VOG is when there is a South wind, which is only a few days a year, once in a while.

"Honolulu's water is filtered through volcanic rock and is known to be free of the chlorine taste of other cities' supplies. The nonprofit Environmental Working Group, based in Washington, D.C., rated the Honolulu Board of Water Supply No. 6 among big American cities for the following criteria:

    * Total number of chemicals detected since 2004
    * Percentage of chemicals found of those tested
    * Highest average level for each pollutant"

Pretty Cool!

When meeting with a real estate agent to search through your new home options, it is easy to get a bit confused by the terms that are used by real estate agents. While agents are not trying to confuse their clients, the reality is that certain terms are so common in the industry that it is easy for an agent to forget that everyone might not be familiar with that term.

One such term that could potentially cause some confusion is "spec home." In the simplest of terms, a spec home is a home that a builder constructs with the belief that someone will eventually come along and want to purchase the home.

In other words, the builder constructs the home based on speculation of what a buyer would look for. As such, these homes have already been constructed with a number of options that are already included in the price.

There are numerous benefits to purchasing a spec home.  Some of these include:

• These homes are usually at or near completion, which means the buyer can move into a newly constructed home in just 30 to 60 days rather than having to wait 6 months for the home to be built from scratch
• Numerous options are already included in the priceÂ
• Buyers can see exactly what they are buying before they make a purchase

Of course, there are some potential downsides to purchasing a spec home as well. For example, for those who are looking for specific options, purchasing a spec home may be a bad idea because the buyer does not have the option to choose his own options. Furthermore, purchasing a spec home generally is not the least costly option available for those who are interested in purchasing a newly constructed home.

When discussing new construction options with a real estate agent, he or she may use a number of other terms that mean the same as “spec home."  Some of these include:

• Featured homes
• Immediate delivery homes
• Inventory homes
• Move-in ready homesÂ

It's important to understand that the spec home market will differ from market to market, depending on how strong that real estate market is at the time. Just as in another Metro area like Austin's condo market will differ from Hawaii's, the spec home market in Austin will differ from Hawaii's.

That's why it's always important to contact a professional to find out what your specific sub-market is like. For those who are interested in purchasing a spec home, the best way to go about doing it is to contact a real estate agent in the area who specializes in new homes. By hiring an agent who is experienced with these types of transactions, you can be sure the agent will be knowledgeable about the different types of incentives that are available through the builders.

In addition, a real estate agent who specializes in new homes will be familiar with the new home communities that are available in your area.

About the Author: Eric Bramlett is the broker & co-owner of One Source Realty, a boutique real estate company in Austin, TX. Eric specializes in central & west Austin, and Steiner Ranch.

 Lost and Hawaii 5-0 star Daniel Dae Kim is selling his house for $2,430,000.  Located in beautiful Kahala on the East side of Oahu, the home has 5 bedrooms, 2.5 baths, and a large pool. It's a vintage Hawaii home in Oahu's most expensive neighborhood.  Best of all, it's about a block from Kahala beach! Check out the video. 

Just got this email from a lender:

The maximum loan amount was just updated to the VA Matrix for 2011 which includes a
loan increase for Honolulu
county of $741,250!  Other highlights include:

·       
620 FICO up to $700K no reserves

·       
Max loan amount of $1,500,000

·       
Split entitlement is ok

·       
Spouse can satisfy occupancy
requirements

·       
Case by case VA IRRRLs with no
appraisal up to $1,500,000*

·       
AVM (no appraisal) only if the LTV is less than 95%
for IRRRLs up $1,500,000*

*anything over $700K needs an exception

The VA loan is one of Hawaii's best financing options.  Without it, many military would never be able to buy a home. I have worked with many military families and I can say that the VA loan has really been a great tool for them. 

 It's 80 degrees, breezy, and the water is about 75 degrees.  Just another "winter" day on Oahu.  How is the weather where you are?  And WHY don't you live in Hawaii yet?

Here is the view out to the ocean over my neighborhood.  My house hidden in the trees.

I went through some of the Census data and tried to glean anything interesting for real estate purposes. 

Here are some highlights:

148,764 more people live in Hawaii today compared to 10 years ago.  Our State population now totals 1,360,301, up 12.3 percent from the 1,211,537 people who lived here 10 years ago. It's hard to even imagine where these people live, considering there haven't been very many new homes built since then.  No wonder there is a housing shortage! 

As the population increases, the Island gets more expensive. I've talked about this over and over, but the Census really drives that home.  If there really are 12.3 percent more people over just a 10 year period, we are going to run out of room very quickly.  More likely, they counted a little better this time, but still there was definitely a large increase. 

Hawaii is now ranked 40th in population size nationwide, up from 42th in 2000, according to Census data. Hawaii will continue to have tw

Hawaii has the 7th highest median household income in the nation, using a 3 yr average up to 2009. Hawaii's median was $61,055 in that period. The highest in the nation was New Hampshire with $66,654.  California's median was $56,862.  It's no wonder, because it takes a lot of money to live here. We also have one of the highest median home prices at about $600,000 this year. 

The per family median income is a different number, but Hawaii is still very high, with an estimated median family income as follows:

Overall average:      75,066
2-person families    63,143
3-person families    74,449
4-person families    85,190
5-person families    80,552
6-person families    94,304
7-or-more-person families    112,585

In comparison, California's average income is $67,038. Connecticut's average is $83,069.  New York's average is $66,891.

In summary, Hawaii's population is growing and making lots of money, which is all good real estate prices.

This year's Hawaii Kai Christmas Boat Parade was the best one yet.   The Hawaii Kai Marina Community Association held  the parade Saturday, and it was a great event for the whole family.  I took my family of 5 and found a nice secret spot along with about 50 other people. ;)

There were about 30 boats this year, all decorated with Christmas lights and various creative themes, some with a pretty amazing  amount of preparation involved.  The judges sat in the Towne Center behind the stage as the boats came around twice to show off their decorations. 

Mike Buck, host of the “Mike Buck” show on KHVH AM 830 was the MC again this year. 

 This boat featured elves that danced, sang, and told some corny jokes. 

By far the highlight of the parade was the Avatar boat, complete with Tree of Souls, 2 flying dragons and a robot guy on the front. Forgive me for not using the actual names.  Everyone on board had a choreographed dance set to raggae music.  This thing must have taken months to create.  It was amazing.  The only thing is, what the heck does Avatar have to do with Christmas???  

The boat parade will be a tradition for our family, and it's just one more reason to choose to live in Hawaii Kai. 

Did you ever think of your house as a financial safety net? 

I read a post this morning on Gigi Hawaii's blog, in which she explained that owning a home is about to save her life, so to speak. 

She writes, "We plan to apply for a reverse mortgage next month... If the reverse mortgage goes through, we will pay off our two mortgages and David's car loan, thereby saving $3,000 per month.  ... We have no choice but to do this. When he was
demoted in July, David had a $23,000 pay cut. We have been struggling
to meet our financial obligations ever since. With a reverse mortgage,
we will be able to breathe a sigh of relief. Thank God, we own a house.
Where would we be if we were renting?"

The answer to her question is probably - on welfare.  But yes, Thank God she and David saved their money, paid their mortgage, worked hard, and as so many lucky Americans do, they bought a house.  All those years of faithfully making payments, being financially responsible, and pursuing the American dream are about to pay off in the form of reverse mortgage payments for the rest of her life. 

In a reverse mortgage, the bank pays you the equity on your house as a monthly payment, and in the end, they get the house (unless you refinance or sell with equity.)  

David and Gigi are not lucky, they were wise.  They were responsible. They are fortunate and will reap the seeds of their financial sowing.  Good for them. 

Now they can continue to enjoy beautiful Hawaii sunrises like this, without financial burden.  Pic provided by bytemarks.org.

Next week, President Barack Obama will arrive in Oahu for his annual Hawaii vacation.  I've had several occassions to be in the vacation home that the President rents, since I had a few interested buyers when it was for sale for $9.5 million. 

This beachfront Kailua property has about half an acre right on the sand, and looks straight down Kailua beach.  The house is only 4 bedrooms, 5 bathrooms, and about 5000 square
feet.  Not too big, considering many houses on the mainland are triple that size. The
location on Kailua beach can't be beat.  This will be the 3rd year in a
row that the President has rented this house.  Make sure to read the full post to view all 30 pictures!

Lava rock style poolside

 This is the view from the living room!

 Back lanai outside the living room looks out to the beach.

 And there is the view down Kailua beach.

 Walk right out to the sand!

The President's kitchen!

 Another view of the kitchen

This is the great room.  Beautiful beams in the ceiling are not actually supporting the house. They are just for decoration.

 A small TV room. 

Pool side lanai complete with wall mounted TV

Look at those beautiful floors!

 A few bedrooms follow.

 Blue tile to match the blue water outside!

The hallways are covered, but not enclosed.