EWA (KHNL) - Hawaii's real estate market is feeling the effects of the troubled economy, particularly on Oahu's west side. That's where much of the island's growth spurt is happening.
But big homes at affordable prices there has attracted risky lending and in these tough times, realtors say homeowners who committed to a loan they couldn't really afford are now seeing the consequences.
This home in Ewa has been on the market for a year. Despite attracting three offers, it's still up for sale because lenders aren't responding.
"It's the lenders that are swamped with short sales. The lenders are hurting themselves, so response times are taking longer. You may not even get a response from the lenders," said realtor Brenda Ching with Realty Pacific.
Ching says the surge of development in Ewa has pushed property values down, forcing homeowners to sell for less than what they paid.
And some are locked into subprime mortgages where you initially pay a low-interest rate, fixed for say, two years. After that, it resets to a higher rate. And with the troubled economy, realtors say some homeowners are finding themselves in a bind.
"Now it jumps up and you just don't have the income, now with fuel and gas and your electricity bill goes up, everyone is just feeling it. It's affecting everyone," said Ching.
Particularly on West Oahu, where new homes have attracted a lot of first time home buyers.
"First time home buyers really don't have a lot of money to put down so their down payment is low which leads to higher monthly payments and they're more prone to default," said Prudential Executive Vice President Dan Tabori.
But in real estate, a seller's loss is a buyer's gain.
"It's not a bad time to buy. You could actually get probably something today that you couldn't get two years ago, a bigger house for less," said Ching.