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So, what do you all think is going to happen to real estate prices out here? They leveled off, and have dropped a bit. Sales volume seems to be low, and inventories high. Average DOM is up. The market seems to be following the precipitous drops in many mainland markets.
Anyone care to venture a guess as to whether prices will (1) continue to drop and never recover, (2) drop a little more, level off and eventually go back up, (3) drop a little more and stay there, (4) other?? Have prices dropped on the other islands as much as on Kauai? What's the market like on Oahu? Do you think it's getting (or will get) to the point where investors from non-US markets (Japan, Australia, maybe China) will start to see bargains in Hawaii, and drive the market back up? IS this drop precipitated by mainlanders being unable to sell their homes, and move their investment out here?
Great questions, Sweetbeet...I've been "banned" from lengthy computer sessions this weekend since we have guests on-island and we are enjoying our last two days in Puako, but I will share a few of my thoughts after the weekend.
Hope you are having a wonderful time during your visit here!!
So, what do you all think is going to happen to real estate prices out here? They leveled off, and have dropped a bit. Sales volume seems to be low, and inventories high. Average DOM is up. The market seems to be following the precipitous drops in many mainland markets.
Anyone care to venture a guess as to whether prices will (1) continue to drop and never recover, (2) drop a little more, level off and eventually go back up, (3) drop a little more and stay there, (4) other?? Have prices dropped on the other islands as much as on Kauai? What's the market like on Oahu? Do you think it's getting (or will get) to the point where investors from non-US markets (Japan, Australia, maybe China) will start to see bargains in Hawaii, and drive the market back up? IS this drop precipitated by mainlanders being unable to sell their homes, and move their investment out here?
In past real estate downturns (and I have owned RE in Hawaii since the mid-sixties), prices dropped about as much on Oahu as they did in California, but with a lag in time of one to two years.
Real estate prices in the harder hit areas on the mainland are already down about twenty percent, and I don't think we are near the bottom there.
The optimists say there is no reason for Hawaii prices to drop that much, but I think they may. In every RE market there are "flippers", who, in an up market, expect to buy, make some cosmetic improvements, and quickly sell at a profit. When it becomes obvious that such "flipping" is not going to work, all those folks leave the market.
I have been watching a particular condo complex in Waikiki, the Marine Surf, for about a year. They are studios, all the same. When I started watching, the lowest priced unit was $250,000, about a year ago. Today the lowest priced unit is $225,000. There are two for sale at that price, and two at $230,000 - one of them in escrow. That's a 10% drop.
I think RE prices will recover, no matter how far they drop. I just think you may have to be very patient.
This opinion is worth exactly what you paid for it.
The above article is a short update on Hawaii's ranking in foreclosure filings for January--we are near the bottom of the list, 42nd.
One of the trends we have noticed here on the Big Island is that developers seem to be holding back on homes in the middle price range (relatively speaking) and seem to be focusing on either the entry-level price range or the luxury market.
I posted this link a while back, but think it addresses many questions the OP has raised:
So, what do you all think is going to happen to real estate prices out here? They leveled off, and have dropped a bit. Sales volume seems to be low, and inventories high. Average DOM is up. The market seems to be following the precipitous drops in many mainland markets.
Anyone care to venture a guess as to whether prices will (1) continue to drop and never recover, (2) drop a little more, level off and eventually go back up, (3) drop a little more and stay there, (4) other?? Have prices dropped on the other islands as much as on Kauai? What's the market like on Oahu? Do you think it's getting (or will get) to the point where investors from non-US markets (Japan, Australia, maybe China) will start to see bargains in Hawaii, and drive the market back up? IS this drop precipitated by mainlanders being unable to sell their homes, and move their investment out here?
My crystal ball says "level off and go back up" with exeptions (see below). Prices have dropped on Hawaii Island's Kohala Coast, but no where near a return to 2002 prices. Yes, I am looking for the Australians. I believe the Chinese will head to Oahu as there is a sizable Chinese American community there. Japan's economy needs to stabalize before my crystal ball says they will return in any numbers. The Canadians are happily looking. I haven't reviewed the data to see how much they are buying.
Acording to local economists, Hawaii real estate has appreciated in a stair step fashion since the 1940s. A period of intense appreciation is followed by a level market. Here on Hawaii Island's Kohala Coast, the intense appreciation ended in 2005, and we are now in the level period. However, prices here are dependent on price range. The over 1-2 million dollar residences in my area don't seem to be correcting much, while the under 1 million market is seeing a slow correction. That said, the exact neighbrohood you prefer should be tracked closely to determine the trend relative for you. If you want to track your favorite market, email me off-list and I can help you do that easily.
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My crystal ball and West Hawaii real estate
