At its scheduled meeting today, the Federal Reserve again cut interest rates, this time by 50 basis points, or one-half percent. This follows the emergency move of three-quarters percent just last week and lowers the benchmark rate to 3.0%.

The Fed is reacting to risks in the financial markets and this latest move should help the stock market or at least slow down the bleeding. What will be hurt is the value of the US dollar which will sink compared to foreign currencies.

The effect on the O`ahu housing market? Financing costs should go lower for US buyers and non-US buyers will see our prices dropping due to the enhanced exchange rate.

Prices here have been very stable compared to other US cities. Our borrowers have been more conservative and have avoided the sub-prime loan markets which have caused the instabilities in financial markets.

In all, I believe this is a favorable move for the housing market. What do you think?

Single family homes resales in Waipahu have been solid. For research purposes, the Honolulu Board of REALTORS® defines this geographic area as Tax Map Key , Zone 9, Section 4, although part of Section 4 is classified as Mililani.

There were reported sales of 320 dwellings in 2007, a 9.9% decline from the number sold in 2006, which was 355. Much of this decrease appears to have occurred in the month of December where there were only 16 sales, compared to 33 a year earlier.

The median price paid for the homes that changed hands in 2007 was $577,300. This price was a very slight increase from the $575,500 paid during 2006. In December, the median price paid was $550,000, a decrease of 1.6% from the price paid a year ago in the same month. The highest price paid for a home in Waipahu was $980,000 which, interestingly, was the only single family home area on the island in 2007 that did not have a sale above $1 million.

Sales speed, which is measured from the time that elapses from listing to a contract, was 48 days last year, a one day drop since 2006. This statistic compares favorably with the overall O`ahu number which was 47 days in 2007.

For further information about how your specific neighborhood performed, check out the Honolulu Board of REALTORS® website www.HiCentral.com or contact a REALTOR® in your area.

Everyone has been speculating on what effect the three-quarters of a percentage point drop made by the Federal Reserve this week will have on mortgage rates. Mortgage rates will drop also!

According to the latest weekly survey of lenders done by the Honolulu Board of REALTORS® , the 30-year fixed mortgage rate has already slipped below 5.0% at some major local lenders. And, the cost of the 1-year ARM product is very near the same as the fixed 30-year loan for the first time in a number of years. The 1-year ARM offers you an initial teaser rate which allows you to get into your loan at a lesser cost.

Don’t forget that many lenders set their rates for this week’s survey BEFORE the Fed move so rates will probably go even lower next week. You can view the survey results now on the Board’s website at www.hicentral.com/mortrate.htm , as well as see it printed in this weekend’s editions of local newspapers.

This mortgage rate decline is good news for both buyers and sellers in the O’ahu housing market. As I’ve noted in a prior missive, lower financing costs mean more home (or condo) for your hard-earned dollars.

I will be appearing on Everybody’s Business on PBS this Friday night at 7:30 pm. The show is hosted by KGMB business guru Howard Dicus and will also be rebroadcast on Sunday at 3:00 pm. If you are an Oceanic cable subscriber with analog service, the show is on channel 10. Hi-def subscribers can see the show on channel 1010.

The interview should be about the O’ahu housing market, but one never knows with Howard. My guess is that the recent rate drop by the Federal Reserve will also be discussed.

You can check out the PBS website at www.pbshawaii.org/home/index.php for further information.

Be sure to watch and let me know what you thought of the interview!

Mililani is located in the central O`ahu area and is defined by the Honolulu Board of REALTORS® for research purposes as Tax Map Key Zone 9, Section 5 and part of Section 4. Mililani was developed by Castle & Cooke .

In 2007, there were reported sales of 456 condominiums in Mililani through the Board’s Multiple Listing Service (MLS) computer, a decline of 13.0% from the prior year. During the month of December, 37 of these sales took place.

The median price paid for a Mililani condominium was $308,500 in 2007, which represents a decrease of 2.1% from the price in 2006. At the end of the year, in December, the median price was $315,000, compared to $305,000 at the same time in 2006. The highest price paid in 2007 for a condo in this area was $665,000.

The speed of sales in Mililani was 33 days, which was among the fastest for any condominium area on the island. The sales speed is the time that elapses from when the listing was made available in the MLS until a sales agreement was reached and excludes escrow time.

For further information about how your specific neighborhood performed, check out the Honolulu Board of REALTORS® website www.HiCentral.com or contact a REALTOR® in your area.

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Fed Cuts Rates

The Federal Reserve chopped interest rates by three-quarters of a percent this morning, the largest cut in 23 years! Further, this rate decrease was done before the regular meeting at the end of next week, on January 30-31. More on this move by the Fed in another blog.