1. Market Update for Hawaii Developer’s Council July 21, 2005 Harvey A. Shapiro Research Economist Honolulu Board of Realtors Email: harveys@hawaii.rr.com

2. HDC Why is the Oahu housing market soaring? 7/21/2005 High Demand for Housing Extremely Limited Inventory Low Financing Costs

5. Results for the First Half 2005 HDC7/21/2005

8. Increased demand has resulted in HIGHER PRICES HDC7/21/2005

9. $577,800 $257,000

12. Residential properties are selling faster: Median number of days properties were on the market before sales agreement (listing date to contract date) YearSingle Family HomesCondominiums 1995 7282 1997 6780 1999 5667 2001 4542 2003 2627 2005 2 nd quarter 1717 HDC7/21/2005

14. PREMIUMS are being paid for residential properties: Percent of Properties with sales prices > asking price YearSingle Family HomesCondominiums 1995 1.72.2 1997 4.04.5 1999 7.14.7 2001 11.28.9 2003 18.2 10.4 2005 2 nd quarter 28.0 26.2 HDC7/21/2005

15. Inventory is extremely limited The number of available listings being actively marketed is now only a fraction of what was available in the early 1990’s! HDC7/21/2005

17. Historically low mortgage rates HDC Watch Out – They’ll be rising! 7/21/2005

19. However, Oahu properties are currently more AFFORDABLE than they’ve been! HDC7/21/2005

22. Estimate

23. In Summary… Residential sales expansion for thirty-two (32) quarters Sales in 2005 will be similar to last year’s and prices will increase about 20% - 25% Another EXCELLENT year for residential real estate! Properties are selling significantly faster Price appreciation continues Premiums paid above asking price Inventory availability continues low HDC Affordability is still very favorable 7/21/2005