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Yeah, I know I was being a little flippant, housing markets I think are best described with Heisenberg's Uncertainty Principle. We all try to buy low and sell high, though we're rarely able to do so at the absolute lowest and absolute highest, we just aim for it
Thanks for letting me know about your situation, I wish I could just jump a plane today or send a surrogate, but alas I'm stuck, so I'll use one of my favorite phrases that I picked up in the Middle East, I'll buy a house while the market is still near bottom, Insha'Allah, meaning if god wills it.
I agree with you,K-Pono. I dont think anyone can "time" the market. From my perspective, I just weigh the costs and decide what's best for my circumstances. Everyone's situation is different and consequently has a different perspective. That's what makes a market.
Personally, I think the market for real estate seems very small in Oahu. Compared to other locations and markets (particularly on the mainland), there doesn't seem to be a comparable volume of transactions. Danny-Diver, compare the number of yearly RE transactions completed in Seattle/King County to all of Oahu. I'd guess the yearly sales of the combined Bellevue-Redmond-Kirkland areas
only are likely greater in number than all of Oahu. Frankly, I consider Oahu (Honolulu) to be pretty much a small town.
Unfortunately, the west side (Oahu) is often ignored. If you are working in Honolulu, the commute is
a killer, but there are some great, little appreciated beaches. The people living there are generally pretty nice, and a little more down to earth. I don't live there (yet) but I like going to the west side.
When I sold my mainland house last summer, I was totally sweating the closing as every week, I'd see the Zillow approximation of value drop lower and lower and lower, and I was so afraid the buyers would abandon their deposit and leave me stuck with it. Lucky me that they were young first-time home buyers with stars in their eyes. It appraised at the sales price (THANK GOODNESS) and I am now totally free of any and all real estate encumbrances.
OMG I just looked it up and it's supposedly worth $48K less than I sold it for; and I sold it for half of what it was worth during the crazy RE price peak.. I hope the buyers decide to live in it a very long time, as the market will eventually recover.
I find the HI real estate market rather complex to forecast with: (1) each island being so different from the others, (2) some of the property being vacation rentals, (3) some not, (4) insufficient locally generated income to support the current prices, and (5) a non-trivial % of the homes & condos are owned by foreign nationals, notably those from Japan.
With Japan now at the point where it has a debt-to-GDP ratio of (roughly) 200% and a shrinking population , it is hard to forecast what will happen to HI real estate once Japan experiences its version of the Greece crisis. Will many Japanese nationals sell as they get old and move back 'home'? Will their home country finances getting squeezed add further selling pressure?
As rentalman notes, the US economy also has a significant 'Greek' element to it. The current path is unsustainable both due to excess debt and demographics. For example, when Social Security began, there were 16 workers paying in to every person taking cash out. Today, that ratio is roughly 3:1, and it's headed toward being 2:1. A 2:1 ratio is not sustainable. Either tax rates skyrocket and/or benefits get cut dramatically. Both of which, all else equal, could easily put downward pressure on HI real estate prices.
Of course, the Federal Reserve may erode the value of the currency gradually over the decade or two, and there's nothing like inflation to drive home prices upward.
I see powerful forces acting in both directions.
The only conclusion I draw is that an individual should be very careful taking on any new, large debts.
I find the HI real estate market rather complex to forecast with: (1) each island being so different from the others, (2) some of the property being vacation rentals, (3) some not, (4) insufficient locally generated income to support the current prices, and (5) a non-trivial % of the homes & condos are owned by foreign nationals, notably those from Japan.
With Japan now at the point where it has a debt-to-GDP ratio of (roughly) 200% and a shrinking population , it is hard to forecast what will happen to HI real estate once Japan experiences its version of the Greece crisis. Will many Japanese nationals sell as they get old and move back 'home'? Will their home country finances getting squeezed add further selling pressure?
As rentalman notes, the US economy also has a significant 'Greek' element to it. The current path is unsustainable both due to excess debt and demographics. For example, when Social Security began, there were 16 workers paying in to every person taking cash out. Today, that ratio is roughly 3:1, and it's headed toward being 2:1. A 2:1 ratio is not sustainable. Either tax rates skyrocket and/or benefits get cut dramatically. Both of which, all else equal, could easily put downward pressure on HI real estate prices.
Of course, the Federal Reserve may erode the value of the currency gradually over the decade or two, and there's nothing like inflation to drive home prices upward.
I see powerful forces acting in both directions.
The only conclusion I draw is that an individual should be very careful taking on any new, large debts.
There are never any guarantees with anything in life really. You only have one life to live. So if you can swing it and you really want to do it, I wouldn't worry about all the possible global issues that hypothetically could cause a problem. I'd just say do it if you've done your research and you can afford it. You have only one life to live.
Waikikiboy, I gave you a positive rate but I'd like to add that sometimes people are more peripatetic than they think they are. I thought the "owning is cheaper than renting" paradigm was true until I lived it. It's highly unlikely that we will ever be owners again...that huge loss when you have to move and sell cheap has occurred way too many times in my life.
There are never any guarantees with anything in life really. You only have one life to live. So if you can swing it and you really want to do it, I wouldn't worry about all the possible global issues that hypothetically could cause a problem. I'd just say do it if you've done your research and you can afford it. You have only one life to live.
Thumbs up for this one!
Reasonable precautions should be taken but you can end up with paralysis-by-analysis. ITA with the research stuff. When you find yourself triple- and fourple-checking what you've already researched to the max it's time to call it a day and decide one way or another. Move along, nothing more to see here.
But don't count on there being no bumps in the road no matter how much and how long you've researched and however sure you are that you've covered all your bases. The bumps are inevitable and they will come. They will happen and how you handled bumps in the past just might be an indicator of how you will probably handle them here. Illnesses (both here and involving loved ones on the mainland), job loss, sudden expenses, loneliness, etc. Last but not least, one S.O. likes Hawaii a lot less than the other (we're talking "OMG what did we do I wanna go HOME" kind of lot less) and is miserable. Who compromises and what effect does that have on the one who feels they are on the short end of the compromise, not to mention the relationship?
IME (and I have seen many many come and go here) it's very often the ones who think they've got it all covered who are most thrown by the dreaded monkey wrench(es).
Simply put, crap happens. One either rides it out and changes gears and survives and hopefully prospers or packs up and goes home. I've seen both scenarios.
For us, we planned on renting until we were sure about where we wanted to live. About six months later we bought a house. That was it and it turned out to be an excellent plan. We could have bought a house here and rented it out quite easily but really....I wanted to MOVE, lol. In my business I see so many who had fabulous plans that were never realized because life reared its ugly head and smacked them down. So sad.
I had this quote taped to my refrigerator before we moved here---my very favorite quote in the world. My personal words to live by:
"Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do.
So throw off the bowlines.
Sail away from the safe harbor.
Catch the trade winds in your sails.
Explore.
Dream.
Discover."
– Mark Twain
I'm a never a fan or a believer when people into real estate call it that the 'housing market has bottomed out'.
They assume that that's a good thing. That we all have a ton of money, and are just waiting to buy when houses are at the bottom, and we're all in it for profit and a quick buck.
The reality is that housing, as high as it is, and unaffordable to most in Hawaii, really shouldn't be at it's bottom right now.
I agree that no one can accurately call the bottom of a market. I had friends call the bottom of the market in 2009 and bought. People really need to understand and be willing to accept the risks if their decision doesn't work out. And that decision could be the decision to buy that doesn't work out. But it also could be the decision not to buy that doesn't work out and costs you more in the long run.
Because so many people around the world are drawn to Hawaii, the market there is very different than most other markets, I know we all know that.
My personal opinion applies to those who want and can afford to buy, and equally to those who want or need to rent: If you do your research, know yourself and can afford it, then don't forget to factor into your equation the only one real fact that will not change: you only live once.
My personal life is full of regret at this moment for not following my own advice. There are a number of things I always thought about doing but they were not particularly practical. I was always putting it off for that reason. Now I've lost my long-time "significant other" and the prospect of doing any of these things without him seems empty.
This has changed my outlook a bit and pushed me to remember to factor into the decision the only one thing that is certain: you only live once, so consider that equally along with the other factors you look at in your research to make any large decision.
Just my opinion of course and certainly not professional advice for anyone.
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, it is hard to forecast what will happen to HI real estate once Japan experiences its version of the Greece crisis. Will many Japanese nationals sell as they get old and move back 'home'? Will their home country finances getting squeezed add further selling pressure? 
