Decline in Real Estate

[HiloHaole]

Around Atlanta, it would be the "end of the 7-percenters." About 20 yrs. ago, the biggest realtors came together and decided to get a 7% commission. Even though the Federal government came in twice and found them to be price-fixing, the realtors received a slap on the wrist each time and are still charging 7%. I know that in some areas of South Carolina the MLS members get to see the listings on the internet before the public does. I suspect this is to give any real estate agent the opportunity to buy the property before the public knows it's for sale. After all, most of the agents get into the business initially to be able to buy and sell real estate that the public does not know about.

[JerryCarr]

Aloha, HiloHaole. My partner and I sold our house in suburban Atlanta (West Cobb County)in 2005 though a 6% commission full-service realtor, Keller-Williams, who are relatively new to that area. The solid front of Atlanta realtors fixing commissions broke even before that, though. Agencies like HelpYouSell had begun offering discount services and flat rate listings a couple years earlier. The old line agencies are also facing sell-it-youself and internet competitive pressures.

We had purchased our HPP home several years earlier and moved to the Big Island the day we put the house on the market. We just didn't want to deal with the hassles of showing it ourselves and trying to find someone to do the legal work involved in the alternative selling methods. Sold the house in three and a half months and feel that the commission was money well spent. We did the closing by FedEx. I should note that some Atlanta area guys still try to get 7%. We interviewed four agents and two of them wanted 7.

Cheers,
Jerry



Edited by - JerryCarr on 09/07/2006 07:52:13

[JerryCarr]

Here is a link to an interesting article in todays Honolulu Star-Bulletin. Lead line is "Big Island home prices down 14%."
http://starbulletin.com/2006/09/08/busin...ory01.html



Edited by - JerryCarr on 09/08/2006 16:39:15

[Aaron S]

The median sale price on the Big Island slipped 14% in August
http://pacific.bizjournals.com/pacific/s...rround=lfn

"There were 145 vacant lots sold in August, but was that a fraction of the 597 that sold a year ago. A rush to buy lots in Puna district has lost steam -- 88 lots sold last month compared to 377 in August 2005. The same thing happened in Kau district, which saw 124 lots sell in August 2005 but only 24 last month."

[Aaron S]

http://aaronstene.blogspot.com/2006/09/m...crash.html

I was thinking about financial analysts predicting a "housing crash" in the near future today. With the median price dropping 14% in August 2006 (previously blogged here) on the Big Island, these analysts may be right. But at what cost,if the housing market continues tank, our overall economy in Hawaii (and nationwide is going to suffer). As those related industries that support housing, like construction, and real estate are going to be profoundly affected. It irritates me greatly that these "analysts" or "doomsayers" fail to see the huge human factor in the effects of their prognostications.

Another facet to this is, any downtown in Hawaii's economy is going to require the curtailment of government infrastructure projects and services. The last time this happened, in the mid 1990's,West Hawaii got the short end of the stick infrastructure wise.Thus when the economy ramped up again, the infrastructure could not meet the needs of the growing economy. Worse yet,whenever there is downturn in the economy, it seems Hawaii's government tries to re-zone tons of land in preparation of the next land rush. Is that appropriate government planning ?, I tend to strongly think not. Thus why Hawaii desperately needs to diversify our economy and not be catering to the whims of developers wishing to pave over this state.

[oink]

I have three small properties on the BI. Neither is my dream property I would have purchased if I had moved on it before the boom. One of my lots has probably lost value from what I paid and the other two are dropping to about what I paid. I hope prices drop more.

I will need to sell on the mainland before I build anything substantial on the BI, and my value has dropped a bit here on the ML, but it's still way more than I paid. What cost way less than 200k 17 years ago is now worth near a mil.

I believe speculaters have done a lot of damage in this area. Prices are out of reach for starting families without breaking their budgets. The affordable areas were overrun by the speculators and 5K lots became 100K lots in two years. Now there is a glut as there are many hundreds of spec homes in these areas sitting on the market. Some of the speculators might lose their asses. Prices need to come down or we won't be able to find any teachers who can afford to live here.

Commissions in this area have dropped as low as 4% but a good agent can still get 6% if he/she convinces the seller of his/her worth. I think, with it becoming a buyers market commissions will go back up. During the bubble anyone could sell a property, although I don't believe a real estate transaction without professional services is wise except for the few exceptionally knowledgeable people.

I wanted to move back(Maui & Oahu 70 to 75) to Hawaii primarily for the atmosphere, the laid back local life, but I love the weather too. Some of the talk here sounds too much like the old "rush, rush, money is all important" attitude I want to get away from. (Notice I didn't say "Yankee Greed". I wouldn't say that)
Edit
My Bad! "Yankee Greed" is actually largely the protestant work ethic that I readily admit is responsible for making the USA the dominant entity that it is. I think that many people are discovering that the pace of living that that "ethic" entails and the interpersonal relationships that go with it are not necessarily the healthiest or happiest possible.
End Edit

I long for the old island attitude, the one that makes it so easy for the islanders to be taken advantage of.

How's that for a newbie post.
S. FL Islander to be

Edited by - oink on 09/11/2006 05:45:31

[bystander]

quote:

---

But at what cost,if the housing market continues tank, our overall economy in Hawaii (and nationwide is going to suffer). As those related industries that support housing, like construction, and real estate are going to be profoundly affected. It irritates me greatly that these "analysts" or "doomsayers" fail to see the huge human factor in the effects of their prognostications.

---

You seem to think that what these analysts and "doomsayers" say is actually causing the decline by scaring people. I think they are just reporting the truth and their prognosticastions have no effect. Would rather hear the biased opionions of people like Rabi? Sure the whole economy will suffer greatly if the real estate market tanks but you're putting the blame on the wrong people. The analysts are not causing the decline by reporting on it.

[John S. Rabi]

bystander, there is no need to get personal, I never called your opinion biased. I know one thing, both all my clients and I have been laughing at skeptics for 14 years now. None of them and neither have I ever lost money in real estate.

Aloha,
John S. Rabi, ABR,CM,CRB,FHS,PB,RB
http://www.JohnRabi.com
Typically Tropical Properties
75-5870 Walua Road, Suite 101
Kailua-Kona, HI 96740
(808)327-3185

[Punamom]

What are you saying Bystander? You go on and on about people listening to biased Realtors and even post a link to an analyst and now you say people don't listen to analyst?
Of course people listen to analyst!!!
And that does control the market!!!
Analysts opinions are very biased!!!
The rich dad poor dad guy you linked to that says buy gold,OWNES a gold mine! I guess that would not be any conflict in your mind!

From what I can see BI RE prices "in some cases" did rise out of control (although a little to late, most missed the hysteria) and now they are comming back down to normal.
Last year in HPP a 1056 sold for 215k now they are selling for 230k thats a normal priced property not one of the overinflated ones, which are the ones that don't really sell anyway and just sit on the market till the price comes down and makes it look like the prices are coming down.
But really they are going up.(except for the guys listening to the analyst and panicking and selling properties cheap to get em sold quickly).
So as of now properties ARE still selling and interest rates are still low.So don't expect prices to come down too much as long as the buyers are there which they are!

[bystander]

We shall see what happens in a year or two. Perhaps Kiyosaki is biased but he was also hugely invested in realestate a few years ago but he got out.

Again analysts and pundits don't control the market. If you believe that they you are deeply deluded. You seem to think it works something along the lines of a democracy, if the majority of analysts think the market will go a certain way then it will because everyone will listen to them. It just doesn't work that way.