09-21-2006, 06:26 PM
Prices are going to go back to about the early 2005 price range. We are all most there, and that is where they will stay for a while.
Interest rates are going DOWN, or moving sideways, not up, or not up very much. Normal home buyers and LONG term investors will jump back in as soon as data shows a 6 month sideways movement in prices.
Puna is beyond underpriced. I tell everyone I know about HPP 1 acre lots for $50k-$75k! I'm waiting for this correction to bottom out, and I hope to pick up another lot. The prices in Puna are just like having a real estate time machine, going back to 1990 real estate prices.
Buyers have about 5 more years to get in the best areas of Puna, then, no more $250-$450k homes. Speculators (house flippers) make up about 20% of the market. That accounts for the 20% drop in price. They got out starting around Sept. of 2005. By 2008, this will all be shaken out, and the prices will slowly start climbing until prices increase about 25-35%, maybe by 2012, or about $150k on top of CURRENT prices. At that point, those who bought just before the 20% dip and now find themself underwater in their mortages, will be able to sell and break even. If they hold on, say for 10 years, they will be happy. Long term investors know this. It will be a long time before prices soar again like 2002-2005. If we have another major terror attack, the fed may lower interest rates, (not as much as after 911, which is one of reasons the real estate boom began) and the market may heat up a bit more. Every new store, business, traffic light, curb, sidewalk, P.O. Box, Starbucks, all of it, builds the value of the Puna area to new comers looking for all the crap they left behind, and in a sad way, to the value of real estate.
Interest rates are going DOWN, or moving sideways, not up, or not up very much. Normal home buyers and LONG term investors will jump back in as soon as data shows a 6 month sideways movement in prices.
Puna is beyond underpriced. I tell everyone I know about HPP 1 acre lots for $50k-$75k! I'm waiting for this correction to bottom out, and I hope to pick up another lot. The prices in Puna are just like having a real estate time machine, going back to 1990 real estate prices.
Buyers have about 5 more years to get in the best areas of Puna, then, no more $250-$450k homes. Speculators (house flippers) make up about 20% of the market. That accounts for the 20% drop in price. They got out starting around Sept. of 2005. By 2008, this will all be shaken out, and the prices will slowly start climbing until prices increase about 25-35%, maybe by 2012, or about $150k on top of CURRENT prices. At that point, those who bought just before the 20% dip and now find themself underwater in their mortages, will be able to sell and break even. If they hold on, say for 10 years, they will be happy. Long term investors know this. It will be a long time before prices soar again like 2002-2005. If we have another major terror attack, the fed may lower interest rates, (not as much as after 911, which is one of reasons the real estate boom began) and the market may heat up a bit more. Every new store, business, traffic light, curb, sidewalk, P.O. Box, Starbucks, all of it, builds the value of the Puna area to new comers looking for all the crap they left behind, and in a sad way, to the value of real estate.