Kona has just about hit rock bottom, buy now folks (Honolulu: short sales, real estate)

[marcuskona]

long story short, in 2007 I bought a 8 acre mac nut farm with 2 homes in Kealakekua that was appraised at the time for $5m, I purchased for 3.5m. It was a great deal. I still have no regrets as its family land that will never be sold.





now 5 years later, market value is in the toilet. I strongly believe we have bottomed out and property values will begin to rise within the next 3 months.

BTW I am not a RE investor or pro by any means, I am in the Information Technology Field and the above statement is my guesstimate.


what are your thoughts?



Thank you

[PacificFlights]

I think the brunt of the problems in the Kona and Kohala areas have not even been seen. Maybe another 15% decline before it levels off and a few years before it really starts to rise.

[whtviper1]

I don't see a real rise in real estate for over a year.

There is a lot of inventory - especially on the Big Island.

The fed has stated rates will continue to be low - count on at least 18 more months of low rates.

To many short sales and foreclosure sales available.

Until prices on the mainland appreciate - it has an effect in Hawaii - lower real estate prices on the mainland has an impact on 2nd home or investor homes - that market needs to pick back up to 2007 levels.

Homes with premium ocean views will continue to be the strongest and have the best chance to appreciate.

So - I'm not an expert - I do think their are good cash deals if you are patient - but I think the bottom hasn't been hit yet.

I do think we are a lot closer to the bottom than 2008, 2009, 2010, or 2011.

[marcuskona]

Originally Posted by whtviper1

I don't see a real rise in real estate for over a year.

There is a lot of inventory - especially on the Big Island.

The fed has stated rates will continue to be low - count on at least 18 more months of low rates.

To many short sales and foreclosure sales available.

Until prices on the mainland appreciate - it has an effect in Hawaii - lower real estate prices on the mainland has an impact on 2nd home or investor homes - that market needs to pick back up to 2007 levels.

Homes with premium ocean views will continue to be the strongest and have the best chance to appreciate.

So - I'm not an expert - I do think their are good cash deals if you are patient - but I think the bottom hasn't been hit yet.

I do think we are a lot closer to the bottom than 2008, 2009, 2010, or 2011.

Originally Posted by PacificFlights

I think the brunt of the problems in the Kona and Kohala areas have not even been seen. Maybe another 15% decline before it levels off and a few years before it really starts to rise.

thanks for the opinions guys, I have been following the trends closely for the last 2 years, primarly due to me losing 3.1m in my home.

this information here Real Estate Sales Statistics, Economic Indicators, Forecasts & More has lead me to my guesstimate.


thanks for your input, I am considering investing in RE from HOVE north to Kealakekua. I dont want to miss the rock bottom boat.

[whtviper1]

Originally Posted by marcuskona

thanks for the opinions guys, I have been following the trends closely for the last 2 years, primarly due to me losing 3.1m in my home.

this information here Real Estate Sales Statistics, Economic Indicators, Forecasts & More has lead me to my guesstimate.


thanks for your input, I am considering investing in RE from HOVE north to Kealakekua. I dont want to miss the rock bottom boat.

I think if you are patient and don't buy on emotion - there are some deals out there. Also, regarding the bottom - it isn't likely isn't going to be a V shaped bottom and it is more likely going to be a trough we slowly grow out of. My only other concern - Iran and the impact it has on the markets if something happens.

[WaikikiBoy]

Hi MarcusKona,

Thanks for sharing so much info on your specific purchase. You indicate that you purchased the property for 3.5 mil in 2007 and that the Tax Assessed Value in 2012 (in ag property class) is about $750,000 when you combine property & building market values.

Would you be willing to share with us what the Tax Assessed Value was for the property in the year you purchased the property (2007). Then we can compare change in tax assessed value.

Personally, I don't expect property values to shoot up to 2006 or 2007 levels any time soon. I think those levels were an abnormal blip on the charts and not a norm that the market would quickly rise back up to.

But I also feel we're somewhere near the bottom (and this is real estate in general, not specifically regarding the Big Island). Maybe not at the bottom but somewhere around it .

Of course, if the looming federal debt crisis I keep hearing about could cause more problems if it does become a crisis. And I also expect the "bottom" to be a relatively long flat period (like a year or two) before prices slowly begin to rise again. But I"m not expert.

I did recently buy in Honolulu and I'm pleased with the purchase. But I'm also not looking for short-term gain.

[marcuskona]

Originally Posted by WaikikiBoy

Hi MarcusKona,

Thanks for sharing so much info on your specific purchase. You indicate that you purchased the property for 3.5 mil in 2007 and that the Tax Assessed Value in 2012 (in ag property class) is about $750,000 when you combine property & building market values.

Would you be willing to share with us what the Tax Assessed Value was for the property in the year you purchased the property (2007). Then we can compare change in tax assessed value.

Personally, I don't expect property values to shoot up to 2006 or 2007 levels any time soon. I think those levels were an abnormal blip on the charts and not a norm that the market would quickly rise back up to.

But I also feel we're somewhere near the bottom (and this is real estate in general, not specifically regarding the Big Island). Maybe not at the bottom but somewhere around it .

Of course, if the looming federal debt crisis I keep hearing about could cause more problems if it does become a crisis. And I also expect the "bottom" to be a relatively long flat period (like a year or two) before prices slowly begin to rise again. But I"m not expert.

I did recently buy in Honolulu and I'm pleased with the purchase. But I'm also not looking for short-term gain.

Aloha,

I cant recall exact numbers for the TAV in 2007 but it was about 4.4-4.7m

also building value is about the same as it was a few years ago, its the land value that took the hit. for example last years TAV was a little over 1.25m, if this continues by next year my land will be worth 25k

hope this helps.

edit* Free VOG Mask with Every House (http://honolulu.craigslist.org/big/reo/2931385135.html - broken link)

[gregir]

Not sure about BI statistics but what I have seen here in Virginia is that prices have been falling and there have been some bargains but there has been no statistical rise in sales when prices dropped. That implies that there are not enough buyers, too much supply, and the prices are not low enough to move buyers into the market. The latest statistics for Virginia show that for two quarters there has been moves in sales as the prices dropped. hopefully that means we are at or near the bottom and prices will start to recover at the same pace inventory drops or very slowly. The good news is that the market is now behaving "properly" according to supply/demand and price.
From what I have seen on the BI that has not occurred. One key element is having the bulk of foreclosures processed and at least on the market. Without that you will not see price/sales consistently moving the market.

[hotzcatz]

There are still a ton of foreclosures which haven't been cleared off the inventory yet. I don't have figures, but we can drive around and point out a lot of them.

[sadie123]

Marcuskona

Did your property taxes go down with the value of your property?