01-28-2008, 06:43 AM
Our realtors will educate us on this, but until then, I will just talk out of my hat:
The Hawaii market will respond to fact that the mainland real estate market is falling through the floor and into the basement because, as everyone knows, it is mainlanders who drove up the prices in Hawaii. However, I think this will be balanced in part in the short run by the fact that the currencies of other nations are stronger against the dollar. In particular the Canadian <<looney>> is at near historical highs against the dollar. When I considered retirement in Canada, the dollar there was worth 25 cents more in Canada. You could get a great deal in Canada. Now it is the reverse. This makes land in Hawaii cheaper for Canadians. The Yen is also doing pretty well, I read today.
But I think that the Canadians and Japanese may be supporting a slightly different slice of the market in Hawaii ---prime condos and vacation home type properties.
I kind of think we will see a reversing of the trend we have seen in recent years. The Big Island was the last to benefit from the property rush. I think it will be the first to feel the impact of the mainland housing crisis, and then it will move out from there to Kauai, Maui, and lastly to Oahu.
The other complication is that the "housing crisis" may just be part of a much larger economic crisis. Today, a mere acquaintance asked me whether she should be concerned because she has slightly over $100,000 in a bank and she heard that the FDIC insures only up to $100,000. She was wondering if she should take her money out. I referred her to someone competent to advise on such matters but the question scared the hell out of me.
For the first time in my life, an apparently lucid American citizen raised to me the prospect of a so-called "run" on a bank. I am not sure exactly why she was scared, or why she was thinking about this (and why she asked me!). But there is a lack of confidence out there in the economy. Collectively, we seem to understand something that individually we don't. Sort of like gazelles who sense a lion...or in this case, a bear!
There are small ancedotal signs that suggest this all could get very, very bad indeed. If that happens, the Hawaii real estate market will be affected, except to the extent that foreigners pick up the slack on properties that appeal to them.
The Hawaii market will respond to fact that the mainland real estate market is falling through the floor and into the basement because, as everyone knows, it is mainlanders who drove up the prices in Hawaii. However, I think this will be balanced in part in the short run by the fact that the currencies of other nations are stronger against the dollar. In particular the Canadian <<looney>> is at near historical highs against the dollar. When I considered retirement in Canada, the dollar there was worth 25 cents more in Canada. You could get a great deal in Canada. Now it is the reverse. This makes land in Hawaii cheaper for Canadians. The Yen is also doing pretty well, I read today.
But I think that the Canadians and Japanese may be supporting a slightly different slice of the market in Hawaii ---prime condos and vacation home type properties.
I kind of think we will see a reversing of the trend we have seen in recent years. The Big Island was the last to benefit from the property rush. I think it will be the first to feel the impact of the mainland housing crisis, and then it will move out from there to Kauai, Maui, and lastly to Oahu.
The other complication is that the "housing crisis" may just be part of a much larger economic crisis. Today, a mere acquaintance asked me whether she should be concerned because she has slightly over $100,000 in a bank and she heard that the FDIC insures only up to $100,000. She was wondering if she should take her money out. I referred her to someone competent to advise on such matters but the question scared the hell out of me.
For the first time in my life, an apparently lucid American citizen raised to me the prospect of a so-called "run" on a bank. I am not sure exactly why she was scared, or why she was thinking about this (and why she asked me!). But there is a lack of confidence out there in the economy. Collectively, we seem to understand something that individually we don't. Sort of like gazelles who sense a lion...or in this case, a bear!
There are small ancedotal signs that suggest this all could get very, very bad indeed. If that happens, the Hawaii real estate market will be affected, except to the extent that foreigners pick up the slack on properties that appeal to them.