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+--- Thread: Real Estate Prediction (/showthread.php?tid=2600)
RE: Real Estate Prediction - JerryCarr - 02-05-2008
"The median price of a Big Island single-family home in January was $324,000, down from $405,000 during the same month last year, according to statistics provided by Hawaii Information Service." -- quoting from MSN bizjournal. (Thanks for the link, Damon.)
Wow, that's a 20% drop. Quite steep, even though it's just one month and a smaller sample size. Market timing is always dicey, but people seem reluctant to buy in a falling market because a) they think they may get something for even less in the future, and b) they don't want to end up owing more than the property will be worth in the short to medium time frame. Do I see a vicious circle here? The stock market ain't so great, either. Oh, well.
Hard to be cheerful about the economy, but at least it's raining less,
Jerry
RE: Real Estate Prediction - Kelena - 02-06-2008
That is an astounding drop, but in keeping with what we are seeing on the mainland. There has been no soft landing in the housing market -- a gentle decline to a point of stablization. The market here at least has gone over the cliff.
My theory about the market in Hawaii is that prices will slowly recede like the waves on a beach, island by island, beginning with Big Island. Nice condos on the beach and homes near a million will hold fast, as the people who can buy these homes have not been generally affected by the downturn. These are also subject to a more internationalized market. Prices in Princeville are holding very well, and even going up.
I don't think we have reached the bottom yet, because the economy in general has not reached bottom yet. I think we are headed for something that can only be called a modern version of the great depression. Good time to be on an island growing your own and drinking water from the sky, if you can get there.
Then again, I thought the lava would be at the junction of the Pahoa-Kalapana Road and Highway 130 by Thanksgiving!
RE: Real Estate Prediction - Bob Orts - 02-06-2008
A good real estate agent friend said that there is absolutely no real estate slump. The real estate market is still strong. There are still buyers for all homes being sold. Mortgages are readily available and at great rates. Real estate is still appreciating at a constant rate over the last 20 years. She said what's causing all this talk of doom and despair is the events from 2004-2006 where prices ran up so far above what anyone would ever consider reasonable (and people who were otherwise unqualified for a mortgage was getting them) that the current correction back to the normal is a hard pill for some to swallow. So instead of saying I overpaid for what I bought, I got into a debt I couldn't afford, my property wasn’t really worth those high prices, or I can't get the ridiculous prices of a few years ago, they look for something to blame it on but their own foolishness and greed.
There is a house for sale in my neighborhood. It sold in 1999 by the developer for $200,000. My agent friend said she can put it on the market today for $400,000 and get a buyer by weeks end or for $500,000 and wait for a long time. But it's still on the market for over 6 months because the owner can't accept that it's not worth the $550,000 he refinanced it for during the greedy run up. The house is still appreciating 10% or more each year, but because the owner appreciated their debt on the house in a single year more than the house appreciation, they are the cause of their own problems, not the real estate market.
She said she has just as many buyers as sellers, just not enough sellers willing to price what buyers are willing to pay. They are using the high prices of 2005 & 2006 as what they really think its worth, not what it would have been if the ridiculous events of 2005 & 2006 did not occur.