Betty Sakamoto: Aloha and welcome to Betty's Real Estate Corner brought to you by Sakamoto Properties where "prestige is our business, reputation our foundation". In the studio today is Dean Otto.
Dean Otto: Hey Betty, how are you doing? Thanks for having me today.
B: Good to have Dean here. We've got a couple of interesting, we think it's interesting, ideas. We're going to fill you in, kind of, about what's going on in general on the market, some ideas that we've got, get a market update. We wanted to talk to you about some of the Craigslist things that seem to be going on that affected all of us and really are hurting people that really are trying to buy properties and rent properties. And we'll probably end up, if we have time, talking a little bit, again, about some of our current listings and what we think the great deals are and why you ought to be buying. So, Dean, you want to start us off with some market statistics?
D: Yeah, thanks Betty. Again thanks for having me, I appreciate it. Looking at the statistics, we actually ended up last year on a pretty good run. Pretty good rentals at the end of the year, particularly as it relates toward condominium sales. If you look at the first part of this year, you can see that there's been some pretty good activity in single-family homes. We've seen a good spike, we're up 26% in January, over the last January and the average sales prices are up 32% and that's a bump in the right direction.
B: That's really, that's all important for us. What's going on right now is that there's a ton of properties under contract all across the board in Maui, which I think is really exciting for all of us. There's been a lot of sales, obviously, that are happening. Prices are up and one of the biggest things that we see as changing our market is that the inventory is steadily going down. Everybody keeps talking about the market being flooded with inventory but you're going to see, when you come out to look at properties, that there's fewer and fewer properties currently on the market. And again, depending on the category that you're looking for, don't you think Dean? I mean inventory is going to be the key to prices going up.
D: It is definitely the key, that's a great point. You know, what's happening is that over the last few years we've been declining in our inventory at an average of about 20% per year and that is clearly driving the market. It's causing a tremendous increase in the number of showings and the activity. And you know, without really seeing an increase in prices, you know that's coming from the reduction in the inventory that's clearly a major factor in our market right now.
B: Yeah, I think that the more and more days on market go down, you're going to start seeing that we're going to see a kind of "bidding". We've had a few properties recently where we had multiple offers on them and again, that's a huge change considering where we've been over the last few years.
D: That's exactly right. If you look at the days on market for the recent sales you'll see that the average days on market right now are 125 days for a single family and that is substantially lower. I think the last time that I was on the radio show it was 180. So, everything is tightening up, homes are selling quicker, and it's all being driven by this reduction the 20% reduction per year in the inventory. And it's not just the reduction in inventory, it's that well priced properties are becoming very difficult to find something that is competitively priced and we're often faced with the predicament that buyers are coming in to the showings and looking at sales over the last twelve months. Our difficulty right now is finding listings that are going to be competitive to those recent sales.
B: Absolutely, that really is a trick. You know, one of the things and I've talked about this on the radio for the last few shows, well let's say since the first of the year in particular, but interestingly enough from the standpoint of properties that you can view right now in the million to $1.5 million range. We've had people really looking to buy a house with $1.5 million in either mortgage and down payment but you can't find anything for them anymore. And, nothing that they really want, you know. They're still looking for a great house, maybe a view, and $1.5 million isn't going that far in Maui again. Whereas for a while there, there were so many, there was a flood of inventory, now it's not happening. So, if you're looking or you're thinking you're going to look, hurry up and get out there because well you can contact us at (808) 669-0070, or check out our website at SakamotoProperties.com. But, get out there; give one of us a call. Wouldn't you say Dean, that this is the time.
D: I definitely agree, I think that the timing is ideal and I think that we're in for a good year this year, so I think it's clearly the time to buy. I think most savvy buyers are not looking to buy at the very bottom of the market, they're looking to see some progress in the market so that they can recognize some momentum and realize that they're not the only ones driving the market. So, clearly a great time to buy and the other thing that I noted that's pretty interesting is that when the market declines, land sales are the first segment of the market to decline and it's taken a little while to pick up again. I think that land sales is a good indication of the market because it's one of the last things to start moving. I'm noting here that land sales, the average price of the sale of land, is up by 88% and over a million dollars. So, people are in the market buying million-dollar properties again. And it's substantially more when you build your house, but people are spending and I think that's a great thing. The only difficulties in the last few months is finding properties in the million dollar range and there's clearly been a major reduction in the inventory. I actually have a couple of listings at The Vintage in Kaanapali, and The Vintage has become a very popular product right now because we have a few homes in that million dollar price range. I'm showing those as much as six times a day, so it's keeping me super busy and what that tells me is that clearly there's a demand in that million dollar range and a clear lack of inventory. So if you're a million dollar home-buyer, now would be a great time to start looking.
B: The Vintage if someone doesn't know exactly what we're talking about The Vintage in Kaanapali are free-standing homes with a two-car garage for each one of them, and there are three or four bedrooms. The key really is that they were done on a condominiumized type setup so that there is someone that is taking care of the exterior of your home, taking care of the swimming pool that is located in the common area, a workout room, so it really has all of the benefits of buying a condominium but it's a free-standing home. Fabulous location, in the heart of Kaanapali, people are able to drive their own golf cart around. So it's a its time has come, and these prices I don't think you'll ever see again and they're way lower than when the market peaked. So, someone can see in there and that's why we're showing them every day a lot of the time. You know Dean, one of the things we wanted to talk about today was Craig's List. And I know that everybody, and especially the younger group like Dean, you know, have kind of fancied the whole idea of Craig's List. It's definitely a great vehicle. But, we're finding more and more, and hearing more and more, scams coming out of there. So, we just wanted to alert people. I mean, certainly look at Craig's List, and get information if you want. I know that everybody believes, there was a television show yesterday about it, you believe that you're going to get to the individual owner of the property, you're going to rent it at a better price, you're going to keep the real estate brokers out of it, but in a lot of cases it's going to turn out that the person you're dealing with doesn't even own the property. So pay attention to some of these items. You had some comments too Dean, so maybe let's bounce it around a little.
D: Yeah. You know, I think you brought up an interesting example the other day, and you wonder "how could that possibly happen". What's happening is that a lot of properties that are sitting vacant may be foreclosure properties, which as we know takes a long time, with people showing up to these homes and bringing a locksmith with them to open them because they're pretending their keys don't work and they're showing people these properties as if they're their own. Then they take money from these people to rent and ultimately, these are people that have no connection to these properties at all, they're just breaking into, basically, foreclosed homes that are vacant and renting them out and taking the money and off they go. So, it's a difficult situation that's always hard to determine exactly who you're dealing with when you're dealing online. I personally think that it's very important to deal with a realtor, of course I'm biased, but I think ultimately the way to prevent this type of situation is to work with a professional and a professional would be able to guide you through this process and prevent these types of scams.
B: It is a frightening moment, we have one of our listings a while ago and we got a phone call from one of the neighbors telling us that somebody was there, getting ready to move in and they happened to know the seller and know our realtor that was involved in it. So, he went racing over there and these people had mailed, a couple of months rent and a security deposit, to an owner that was an international owner. And they sent him the money, he told them all they had to do, the key would be under the mat at the home, that's why he gave them such a great price, and the key would be under the mat and if there was a problem, go ahead and get a locksmith and he would reimburse them. So they got there, there was no key, they called a locksmith, and were kind of waiting and somehow the owner called us and our agent went racing over and immediately told them that whoever they're dealing with did not own the home. They were so flabbergasted by it, they were ready to call the police on us because they believed that they had already paid their rent, etcetera. It took a lot to take care of it but these people were definitely out thousands of dollars. And the deal that definitely sounds too good to be true, it is too good to be true.
D: And I think what happened too Betty, is that the industry has changed dramatically and a lot of this stems from the fact that there's a lot of information online and people have become so dependent on looking at everything online, as far as looking for real estate, and shopping online before they come over here so the internet is almost reduced the need for a realtor in a lot of people's eyes. With the information that's available people feel more comfortable dealing with an owner or more comfortable dealing with the listing agent because that might save you some money and certainly that's not always the case as we have learned. I learned the hard way the other day, and I can give you an example. I had a recent case where I had shown a client around a home for one afternoon looking at residential properties and had given them a list of lots for sale. Then, they went off on their own and drove through the community looking at all the different lots. And, they decided that it would probably be in their best interest to contact the listing agent directly and what eventually ended up happening was that they decided they didn't want to work with me and having communicated with the listing agent for the property a couple of days prior to getting back to me and were very shocked to learn that by the time we were able to get an offer in that the property had already been sold. What had happened was that the listing agent was with another buyer and when my clients rushed in, claiming to be very interested, all it did was result in the agent going and getting their deal together and putting it under contract before we could get our offer. So, it's not always what it's cracked up to be, I think that ultimately it's really important or even more important because the internet is so unreliable, it's really important to have your own agent so you can prevent these kinds of situations from happening.
B: Right, I think it's going to help everybody in the long run. Even some of these sites like Zillow will have someone that has gone on and on and they've done research upon research and sometimes you listen to them and go, "well they probably know more than I do at this point". But then you start hearing it and they'll say to you, "on Zillow it says that property is only worth" and they come up with a figure. I don't know how Zillow comes up with some of their figures but already, let's say, there's things in the same subdivision or in the condominium project we're talking about, that has sold for more. So they're getting information from somewhere, and it's not just Zillow, it's a lot of sites, and they're thinking that everybody is wrong but them. And either they end up not buying now, and then when they come back it's going to end up being way more than it is. The whole thing with Craigslist, isn't just rental properties, it's people who think they're buying a property and they're making large deposits, like $50,000 or more, sending it to someone so that they're first in line, they kind of have the first option on it, and it's not happening. The person doesn't even own the property. So, you've really got to start being more careful and remember that your real estate broker is working hard on your behalf and they have a lot of laws that they're covered by so they are going to do a great job for you. So get out there, meet some people, find a real estate broker that your comfortable with and get ready to buy a place. Don't go into a new town, whether it's Maui or anywhere else, and not see to it that you learn about a real estate broker that can help you and take care of your needs. I think these things are important Dean.
D: Yeah, not to pick on Zillow but I think there's tons of websites also, and what they're doing is pulling sales which is fair but when they don't have recent sales they're pulling assessed tax evaluations which are completely irrelevant to the market value. So there is some misleading information out there so it's important that you get to a professional to help you with that. I think the whole idea of the information being so available really has changed the industry, as I've said before. In the old days we'd get someone in their car driving around and looking at the different neighborhoods, but now we have people getting on a plane with their list of properties they want to see and they've already previewed everything online. It's changed the industry dramatically.
B: But, that's all good that they have previewed properties and maybe they're driving around, etcetera, but sometimes they're losing it themselves in that they aren't even giving you the opportunity to tell them what really is a good value. You know, somebody is just walking in and they've looked at everything, they've driven around and everything, they've listened to all of these different things online, and they may even know what they want to buy. They might want to buy one of these two places, but there are a whole bunch of other places that are a better value, but they won't even listen to you because they've done their own research. Again, don't lose sight of the fact that there's professionals in the area that you want to buy, and you should be listening to them because they're going to give you a lot better information rather than just trying to assess it yourself, then walking in with a preset notion of what it is that you should buy. Again, I know it sounds like we're kind of tooting our own horns on this, but it doesn't have to be us. There are a lot of real estate brokers in Maui and Hawaii. Listen to somebody before you allow yourself to make what could be a vital mistake.
D: I think one of the issues that are concerned with web searching is the fact that, what I've notice anyway, is that the people that come over here want to look at the properties that have the best photography online. So, it's become about who has the best photography and not as much about who has the best deal. And I think that is sort of an important thing to note too. I've spent half my life trying to get great photography and the best signature shots to be out there so that I'll get that kind of attention and I think that's kind of an important consideration because it's really not about the photography, it's about the value. And there are great properties out there that don't have fantastic photography so it's a little bit tricky but that could be a great segue into marketing.
B: Marketing it is. You know, we've always done a little segment of the best deals or what we're thinking right now are some of the best deals around. We have some fabulous listings, and in the multiple listings service there's more fabulous listings. So we will sit down with you and help you move in a direction but for right now let's just talk about what we think are some of our new properties listed and why we think they're great deals.
D: I've already touched on photography, which is becoming so important. I think the industry is changing and definitely becoming more web-based and the print marketing is not as popular as it was, certainly still important, but not as popular. It's certainly shifting in the direction of digital and web-based marketing so we're spending a lot of time right now working on our websites and making them look as good as you can. But, it's not just about your website looking good, it's about its content, and it's also about really how quickly you can respond to inquiries. I think that any marketing person will tell you that a website can be the best website in the world but if you don't respond quickly enough, you're not going to get the prospect to actually work with you. So, the timing has become a major factor and I know that just with my website I've been doing a lot of work trying to make it as efficient as possible. Considering that the timing of a response is so important, I've actually created an instant contact feature on my website so that when people are visiting my website they can text me questions right there on the spot and my phone also alerts me when someone has been on my website for more than 30 seconds. So, I can actually go on and text them a message and say for example, "I know that you're looking at this particular property, can I help you with any questions" I think it has been a very valuable tool for me, it allows me to get that instant contact, I mean you can't be any quicker than instantaneous. And while most people get these, and respond the next morning, I'm able to do it on the site and I think that's ultimately been a great tool for me. I know for a fact, it was the cause of a recent $4.2 million sale that I had after I met someone on my website, texting back and forth was the initial introduction. So, that's one of the features that I've been working on.
B: You know, that is an interesting thing. At Sakamoto Properties we are all working with as great information as, the greatest information that we can. We're doing everything that we can to accommodate that people that we have their listings. You know, Dean's website which is DeanOtto.com our website which is SakamotoProperties.com each of them have different things. I can't say that I'm immediately texting people, and I give Dean a lot of credit for doing it. I feel, I mean a lot of us right now, it's like this whole email thing, it is a lot of stuff and we're all doing our best to get immediately. I think Dean is totally on it and my hat's off to you Dean on that one. I keep thinking about doing it but I don't know, I don't think I'm going to be sitting there texting to them immediately but I wish I was.
D: Yeah, I'm a texting fool.
B: He is a texter. You see him, well you can't see him now, but if you look at him when he says "text" he gets his fingers going. So there's some show and tell here.
D: Right, and as I mentioned earlier, the texting is another option that I've been looking at real carefully too. So many of my listings, I have a specific MLS number that you can punch into your phone and I have my own dedicated texting number. So if you text the MLS number to my number, it will send you a mobile website to your cell phone. So if you're driving around Kaanapali for example and you see a sign that has one of my listings, it'll have a number to text and you can download on the spot a colored photo slideshow and all of the information that you'd normally get on a regular website. It's just mobile website marketing and texting, in my opinion, is going to be the future. I think emails are great but there's so many emails coming through that, I'm not sure if it's the same for you, but I'm not seeing all my emails. There's so many coming in that I'm skipping a lot of the information. So, that said, email is becoming a difficult way to market real estate because there's so much out there. I love this idea of texting because with texting, everyone answers a text, everyone opens a text, and with email now it feels like we're only getting about 50% hits on that email market. Texting is the new state-of-the-art tool that we're using in addition to the instant contact on the website. Those are two pretty nice features that we're using right now to be a little more state-of-the-art.
B: I think that's a great statement Dean. In the morning, every time I look at my email I probably have about 40 come up that I really have no need to answer or look at but they're there. And you kind of have to get them off, I'm usually looking first thing on my iPhone or Blackberry and it's really a difficult thing cause you really got to get them all off of there to get to the one you need. I agree with you that sometimes, you do Dean, when you're not answering something that you should have answered because it's all caught up in the spammy email. And I don't see any good spam protection at this point.
D: Yeah, it's a bit challenging. I think what happens is that people are skimming over the emails, and they're looking for a name they recognize or a subject that makes sense. So that can be kind of dangerous and I guess it's become more difficult to get attention in the email.
B: It is.
D: What I'm also working on, you know we talked about texting, we talked about websites, we talked about print, and what I've been looking for and working with an organization right now that has got a good program going with marketing. What they're doing is they're bundling all of these different options together and right now you'll see a new magazine publication and it's called Real Estate Maui Now. You'll see that I have some advertising in there right now, so I think it's a really interesting new option and I think what's happening is that they're bundling all the different media together: Texting technology, they have a really active website which is MauiNow.com, which is the number one visited website on Maui, they also have a radio station as a part of the Pacific Media Group. So when I advertise in Real Estate Maui Now, I'm also getting access to their leads on their website, I'm also getting texting interests, as well as them promoting these mediums on their radio station as well too. So, it's sort of bundling everything together in one program and I think that's a really interesting idea.
B: I think it is. The radio station that we're on right now is KAOI, Visionary Network, and I think that this is a great radio station. We've been fortunate to be doing this show for you for several years now. So, I agree with Dean, I think any one of these radio things that we're doing are major. And I think that anyone looking to advertise should be thinking about it. I think radio, in general, is one of the best kept secrets in the world because I think that dollar for dollar it's pretty amazing. So we're KAOI. I think Dean is right, that's another fabulous thing and it's amazing what they're doing with that new site. But we're now winding down pretty quickly and we're coming to the end where we're going to have Danny Couch coming back on. We haven't said any specific properties but call us. You can reach Dean shortly at (808) 870-7736 in his car. You can reach Sakamoto Properties at (808) 669-0070. You can get to SakamotoProperties.com.
B: Aloha and take a quick listen to Danny Couch.