STAR-BULLETIN / 2009 Shown above is the courtyard of a custom Hawaii Loa Ridge home that was put on the market last year by Coldwell Banker Pacific Properties.

Real estate markets are usually defined in terms of whether they are good for buyers or sellers. But what emerged last month on Oahu during the waning days of the federal homebuyers tax credit was more of a transitional market.

"It's a more difficult market to predict," said Chason Ishii, president and chief executive officer of Coldwell Banker Pacific Properties.

On the one hand, Oahu residential real estate sales posted a double-digit rise in April, according to results released yesterday by the Honolulu Board of Realtors. However, the median price paid for both single-family homes and condominiums dropped, HBR reported.

Some real estate analysts, like Ishii, see the market in a positive light; others view it rather negatively. The end result has left buyers and sellers confused and often at a stalemate. They need to know where the market is and where it is going to have strong negotiating positions.

"Buyers and sellers are both pretty bullish about their position," Ishii said. "The buyers hear that prices are dropping and the sellers hear that homes are selling."

This juxtaposition has caused many sales to fall out of escrow because neither side is willing to negotiate—sometimes over the smallest items, he said.

Buyer bullishness was evidenced by April's 52.9 percent increase in single-family home sales and the 48.3 percent rise in condominium sales.

The rush of buyers trying to take advantage of the tax credits that expired last Friday probably contributed to the activity as well. Sellers also benefited from continued inventory levels and low interest rates.

"Oahu residential home sales have continued to be strong, and prices have held pretty steady, which is a good sign that people have more confidence in the economy," said Brian Benton, HBR president.

But while there was more activity in the market, buyers still sought good deals, as evidenced by the slight decline in median prices. More than half of the single-family home buyers paid $563,000 or more for a home in April, which represented a 6.2 percent dip in the median price from $600,000 in April 2009. Similarly, the median sales price for a condominium fell 2.2 percent to $308,000 from $314,950.

"Given that last April was among the worst times for Oahu real estate, it's pretty alarming that (prices) are down at all," said John Riggins, owner of John Riggins Real Estate on Oahu's Leeward side. "It looks like a bit of a slowdown to me."

Real estate watchers have said that the price drops could worsen if sales activity plummets after the tax credit-related closings exit the market June 30. They also said that sales could drop if buyer confidence is harmed by rising interest rates or lingering unemployment, or if a glut of distressed properties come on the market at once.

"I don't think the market is rebounding," said Walt Harvey, a real estate agent with East Oahu Realty. "We could have a double dip."

It is not a good sign that Freddie Mac is beefing up listing agents for its Hawaii HomeSteps program, which markets distressed properties, Harvey said.

"The distressed market is about 70 to 80 percent of my business," he said.

If Hawaii foreclosures, which rose 111 percent for the quarter, do not abate, they could drag down the market later this year, Riggins said.

In Kapolei, one of the regions on Oahu with high distressed property levels, home prices have continued to fall, he said.

"Sellers have to match the price levels set by the short sales and the foreclosures," Riggins said.

What's going to happen going forward?

"It's anyone's guess," Ishii said.

NEIGHBORHOOD WATCH

Oahu single-family home and condominium resale data for April by neighborhood, with the percentage change from last year:

SINGLE-FAMILY HOMES

CONDOMINIUMS

Source: Honolulu Board of Realtors Star-Bulletin