Sakamoto Properties

Hawaii Foreclosure Real Estate
February 7th, 2012

Betty Sakamoto: Aloha and welcome to Betty's Real Estate Corner brought to you by Sakamoto Properties. Sakamoto Properties sponsors this show, and just so that everybody realizes it I am Betty Sakamoto and I approve of this message. Okay here we are it's an interesting day, we've been stuck in traffic. Dean Otto is supposed to be here and should be rolling in shortly. With the wind it looks like in West Maui there's been, we drove by it not just looks like but a fishing boat, it appeared to be, is on the rocks and a lot of emergency equipment out there so the traffic is pretty much at a standstill. So it's kind of a difficult time for somebody who was on that boat and the whole community watching what's happening, so our best to all of the people that are there trying to help out, the policemen, the firemen, and our prayers go out to them and to whoever was on the boat. So Dean should be strolling in here shortly or calling in, however it works for him. So I'm a little bit stuck here by myself trying to figure out what I should be talking about today. So a couple of little things, one of the things that I've been on, off and on, on this show is what's going on with foreclosures and how it's all working and why it's working this way. And I know a lot of you have been stuck with either short sales or properties that have been foreclosed on or that you've turned over to the bank. And I know there's some things going on right now that people are still trying to get help from the lenders, etcetera but I think that any of you that are in that position should take a moment and send letters to your senators, congressman, etcetera, and keep working with the banks to see if we can finally get them to help. The thing I still don't get is why a lender will allow a short sale so that let's say a property is, there's a million, let's say $1,100,000, or a million dollars is owed, you owe on it but it's going to go to a short sale because that seems to be something that will be approved by the lenders so it goes to somebody else. A new family comes in and they buy it for $750,000, $250,000 less, they work on an arrangement where the current owner ends up walking away and there's no deficiency judgment, again typically. But why can't the current owner find a way to negotiate that deal with the lender so that they get the benefit of the "short sale" or "short payoff" or whatever it would take. I think something's wrong with what's going on and it's very unfair to people that are in their communities, they've got children going to school, they do all sorts of things, you know the parents are coaching and taking care of things in the community, they're girl scout leaders, boy scout leaders, and they're losing their home and it is nice for the guy who comes in now and buys it for $250,000 less but in a lot of cases the guy who has the mortgage right now could keep his home. So again, I'm going to get off that bandwagon for the moment, but I think that a lot of people should be taking a moment and trying to figure this out with their congressman or their senators or councilman, I mean let's all talk about it and see if we can help the people that really want to stay in their homes and their community. Having said that, the good news is that we're currently having a pretty big upswing in properties and it seems that everybody is busy across the board, every agent is busy, we're all showing properties as quickly as we can, I mean it's almost, I don't want to say too busy because the minute you say that we end up not busy again but it's like so nice if we could just average it out a little bit better because right now we're just all pretty crazy. But, last week we had a, basically, a six-million dollar day. So we had two sales in one day, both from the Iron Woods at Kapalua that totaled six-million dollars. So I think that's an amazing turn of events, both properties were on the market for a lengthy period of time, one of them sold for $3,425,000 and the other basically for $2,450,000 so a little short of $6,000,000 but one of them was probably one of the best properties, probably the best location in the Ironwoods and it had a million dollar remodel. So I think again value wise it was a great value for the buyer, the other property again was really in great condition, still could use some additional remodeling but easy enough for someone to walk in with their toothbrush and use it just the way it is and do nothing to it, beautifully furnished, fabulous wool carpeting, great, great property. And again, the Ironwoods there's still some great values in there so give us a call (808) 669-0070 if you're interested in taking a look at the Ironwoods. We have a second floor unit available, we have one on the ground floor that also had a million dollar remodel. So we've got some great exciting properties that you can look at there. Other than that, let's see where should we be going. Pineapple Hill, I mean everything at Kapalua today, you know we had a great sale at the Golf Villas at Kapalua for $575,000 which was full price but somebody came and they were looking for something to live in, they had already done a really, really great remodel there so that they went ahead and decided that they wanted it, they could move right into it, and they paid full price. So again, it's an exciting time at Kapalua and throughout the island. I think we've got somebody checking in with us. Hello there.

Dean Otto: Hi Betty, it's Dean, how are you doing?

B: Good, are you still stuck in traffic or where are you?

D: I'm stuck in traffic unfortunately, but I pulled off to the side of the road and I'm sitting on the beach and I'm looking at this great view so I'm not doing too bad.

B: Good. Isn't that the best, I mean can you imagine for different people listening to this, I know it isn't quite around the world but can you imagine the idea in Buffalo, New York that somebody is sitting basically on the beach calling in to a radio show. It's the best.

D: Well quite frankly, I couldn't imagine it. But listen, I did bring some information with me that I was hoping to bring up during the radio show today and there's nothing critically important other than a little bit of market update information and I don't know if you've already covered that but I thought at least generate some pretty good news out there in regards to the market and how the market performed last year in relationship to years past. I think that even though it's hard to feel the progress, I think if you look at the statistics like we do I think you'll see that there has been some progress. For the first year in many years we've had pretty good statistics to show that the market has improved over the prior years. So if you look at single family sales as an example for the island of Maui we had 10% more sales than the year before, the average sale price was up 5%, and the total volume for the year was up 16%. So while they're not hugely improving numbers they do show improvement if you look at the previous year-end. You'll see that while there may have been an increase in the number of sales there was a dramatic decrease in the average sales price. So this is the first year really in some time that we've seen all three categories in a positive trend and I think that's really good news.

B: I think that's huge news, the only thing that I had touched on so far in market statistics was just what's going on at the Ironwoods and what a great week we had at the Ironwoods last week. But again, I think the market statistics are important. The other thing Dean, that I was touching on, and if you have any comments on it before we go to a little more market, is what's going on with the lenders and why it is that if you owed one-million dollars on a mortgage you can short-sell it to another person for maybe $750,000 but the lender will not give the benefit of that short sale, typically, to you, the current owner.

D: Right, I think that's a good point and it doesn't make a lot of sense. I think if you look at the efforts that's being made by people that are trying to contest these situations, the people that are trying to go through and to get some reform, you'll see that what people are proposing is that why don't we appraise the property and get the market value for the property today and take 80% value and adjust the mortgage down to 80% of the current value and I think that would go a long way to keep everyone in their homes and it'll solve a lot of heartache and expense in the foreclosure process and take care of a lot of these situations. And the short sales, that can take up to six months just to get a short sale approved, and I think there are much easier solutions out there, and I think that you've raised a good question, and I think that a lot of people are asking the same question right now.

B: You know one of the things, I mean you and I have both seen a number of properties that are in a position right now of a short sale, and the families are out of their minds with worry. It's almost like 'just get me out of this, even if I lose my credit, I lose whatever, I can't stand the stress anymore', but they would, like you said, at 80% of the appraised value which will be way below what they owe they can stay in their home, they can continue to raise their kids and to go to school. You know, some of the people that I know are coaches, they're coaching little league, or they're coaching football, and something is wrong with this picture. And I know they're working -

D: Well, they generally end up selling for about that price anyway.

B: Yes, or less. The lender is not a winner in this, something is wrong. In some cases they're saying that there were issues where the Federal Government was coming in with one of the lenders Indy Mac or OneWest Bank and that there was some sort of protection that they got so once they foreclosed they still get some additional funding. I don't know how true it all is but I wish I could see something change because I know that so many people are hurting.

D: Right, it is a complicated situation and I think that Hawaii is additionally complicated by the fact that we're a "Recall State". So ultimately these banks, when there's a short sale or foreclosure where there's a deficiency amount that the bank is losing they have the right in the state of Hawaii to attach that deficiency to the borrower, so it creates a really difficult situation. In most cases when people are short selling, they don't really have the assets and the income to contribute and to pay that deficiency. So a lot of the time it's waived by the bank and ultimately they do hold people that do have assets accountable and they require a participation waiver. The selling party of the short sale need to verify their assets, they're requiring that they participate in the settlement. It gets really complicated and I'm not sure where it's going but it's a real big issue here.

B: No, I'm not sure where it's going but I think that there should be more help and in a lot of cases the people don't have any assets. They've used tons of their assets just trying to keep their head above water at times when people's income went down or they lost jobs or unemployment or no unemployment. But I guess that's enough of that, are there any other statistics you brought along?

D: Yes, I'd say for sure there were two things that I thought were interesting was, and also a good indication of an early trend, is the improvement in land sales. All of a sudden you'll notice that contractors are getting excited again, architects are busy, and I think that the results are a fairly good year in land sales last year. I think we ended up about 10% in land sales and that's a pretty significant increase in sales prices by about 25%. So, you know, again, that's not a tremendous volume of sales but I think finally we're seeing land selling and construction starting and I think that's a really good sign. Also, because it does put some pressure on, you know when you have no new homes built and homes selling at reflection costs it becomes difficult for the market. But people are now choosing to buy land and build homes again and I think that's a great fact.

B: One of the things that makes that happen too, and even though we're only up a small percentage from price, there have been enough sales that in a lot of the places that we're working Dean, like let's say Kaanapali Hillside, Pineapple Hill, anywhere along the lower road, the inventory is changing so quickly that for a long time you could buy a really great house for less than you could buy a lot and build a house. But all of a sudden, I think that is starting to switch. You've got contractors that are really looking to work and are really getting somewhat negotiable in some cases so that somebody can buy a really great lot and build a house that really suites their needs and it's because the prices of all the other homes in the market are starting to edge up I think it does make it profitable to go ahead and build.

D: Right, exactly and I think that's one of the shifts in the market. The market does seem to be trending in the right direction, it just is pretty gradual and sometimes it's hard for us to feel it yet. The other thing that I thought was really important good news to share is that there has been a pretty substantial decline in the inventory. And so if you look at the statistics last year, inventories are down 18% in the last twelve months. So if you look at the last two or three years you'll recognize that inventories are down as much as 50% over the last three years. So all of a sudden with inventory shrinking and construction and land sales starting to pick up I think we have a recipe for a pretty strong market over the next several years. It's a very gradual process at this point.

B: Yeah, I think that the change in prices is going to be somewhat gradual but I still think over the last ten days, two weeks, we've actually seen enough of a change that someone's coming in and they aren't just looking for the deal. For instance, I mentioned a bit ago, but just the people that bought the Golf Villa and there's some other people that are coming in right now on a different one. But they're really buying the properties for their own personal use, they're not looking for a short sale or necessarily for the best deal, they want something in really great shape, they want a great view. So again, it's changing and people are ready or thinking of buying this year they should be stepping up now before the inventory gets depleted or the prices are really going back up again.

D: Right, and one of the big shifts that we're seeing is the reduction in the number of REOs and short sales. I think you'd be really surprised to find out that short sales and REOs are only 4% of all condominium sales in the last twelve months. That's a pretty big number ?

B: But wait a minute, the short sales are only four percent.

D: Say that again?

B: The short sales and foreclosure type properties, they're a very small percentage of the current inventory.

D: Exactly, and I think part of the progress that we're seeing is all of a sudden the REOs and short sales are being removed from the market and they're not going to be as much a part of the market as before.

B: Okay, yeah I think you're right Dean.

D: That's the progress that we're seeing so that's what I mean by gradual progress. Nothing to get too excited about at this point but ?

B: Oops, well I think we just lost Dean Otto, I think the wave got him. He may check back in with us but again it's been a wild weather day I think. Now compared to the people that are on the East Coast where they're freezing, etcetera, it's a beautiful sunny day but the waves are churning and it's very windy. You know, way more windy than would be normal so it's kind of an exciting weather day. There could be a little bit of a storm tonight, it was pretty more windy, well kind of stormy, we live in Kapalua, and I would say last night was a storm quality and the wind. We had to close doors that we've never closed etcetera so it was, you know, the weather by itself is kind of interesting. A couple of other things, you know, we've got a new listing on a property in Kahana that we're going to have available and we're going to tell you more about on the next show so that you can be looking for it, 43 Kahana Place. I don't have any details for you right now but if you're interested, it's a really great Kahana home. It's got ocean view, very private Ohana, it has an Ohana. Give us a call (808) 669-0070, check out our website that will be coming out shortly on the website also with some photos so I think it's going to happen very soon. But we'd love to have you call us and ask, we don't have anything like I said that I can give you right now but our website SakamotoProperties.com has all of our listings and that's going to be one of our favorite properties. And I think we'll sell it right away. Excuse me, I think I'm talking too fast and I forgot to bring water because I got here so late. We're waiting still, I think Dean maybe ? I guess a radio show of one may be a little bit difficult, I didn't realize that until just this moment. Usually I'm right on time, I get here early, I have a moment to get ready, I have a glass of water and usually I have a partner in crime. My husband would be here, Roy Sakamoto, and again right now that just isn't working so if I sneeze again I am really, really sorry. A couple of other interesting things, you know, we've been out of the country a couple of times to Singapore and to Shanghai which were really exciting. We've got a variety of people there that are thinking of getting into the market here ? excuse me ? and we're heading back to Shanghai to meet with a group that are hoping to come over here and in one case they're looking to buy a small hotel that's in Honolulu which they would end up timesharing. But we have located a property for them and we're going to be going back and giving them a lot of details on it but we're only going to be able to do it for 2 days so I think we'll be in the air longer than we'll actually be in Singapore. But between Singapore and Shanghai we've made a couple of trips because there's so much interest in what's going on in Maui. Another, one last Kapalua property that I think would be worth talking about is 1212 Summer Road which is right on the golf course, huge, huge view, it's listed at $7.9 million, eight-bedrooms, eight and a half baths, 1,600 approximately square foot swimming pool. This house has the best of the best of everything. It was filled with an ear toward doing that, you know, seeing to it that everything was perfect. It was built for the owners use, it wasn't built as a rental home, it was really built to have it be a second home. They thought at one point that it might be a first home, you know, their principal residence. But you know, it's a fabulous home, fairly easy for me to get you in to take a look at it and for the person looking for a large property to live in this one could be the one. It has a really great media room, office, and pretty much everything was designed perfectly. Architect, Rick Ryniack, so again, a property that I think will be really worth getting a look at depending on where you're at in the market and what you've got in mind. It does seem again like I'm talking about all of the upper price range listings rather than some of the others but again, we do handle everything. We've got a couple right now that are looking for a principal residence that have got some offers in on Napili houses that are great values, there's some newer developments down in Lahaina that we've had people looking at and I think those are really worth it. The developer there is coming up with some great packages for lending so I think there's so much happening in and around Maui that I think this is it, this is the time to be buying. We're looking at some of the others that I was hoping to get to. We still have a fabulous property Upcountry which has huge acreage, and it's got several thousand acres. Sorry that I don't have it right here now, but we're kind of throwing you off on that one so I think I'm going to stick again back at Kapalua and throw in a couple of others. If anyone is looking right now to get into real estate I think you should be calling us first of all, let us go through the list with you whether you're looking for a hundred thousand dollar property or a time share, we've got one of our agents that has a couple of great timeshares at the Whaler. Or let us sit down with you, get you to a lender, go over all of the different possibilities for what you can afford, get you with an understanding of exactly what kind of a mortgage you can qualify for. And I think that's really a key, starting in that area. So if you come in and talk to us (808)669-0070, I'm available, Roy's available, one of our agents will be happy to spend time with you. It's the way you get started and we're happy to talk to you even if you're not ready to buy today, even if it's going to turn out that it's a year from now or two years from now. So check in with us. We're going to be shortly coming back up with Danny Couch and "I Love Hawaii" and today I couldn't love Hawaii anymore, as I said just driving over here even though, as I said, it was a huge traffic thing, the waters churned up and the wind was blowing and the sky was blue and it really is a perfect, perfect beautiful day. And tomorrow, I'm sure we'll end up with no wind and it'll be an even better day. So welcome to Maui if you're here visiting and aloha from Sakamoto Properties. Thank you.

Mailing Address:
Sakamoto Properties
P.O. Box 10068
Lahaina, HI 96761
Contact:
Phone: (808) 669-0070
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Info@SakamotoProperties.com
Office Address:
Sakamoto Properties
Napili Plaza
5095 Napilihau Street #203
Lahaina, Maui, HI 96761
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