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The trouble with Hawaii is that it is a tourism economy. When the economy bottom is when people have the least money for travel/leisure. The economy has to pick up some steam, people has to have the extra bucks to throw away in order to visit Hawaii. That's when Hawaiian economy turn around.There is no telling when the economy will pick up. We have subprime mortgage that blew apart. We have re-mortgaged loan (from subprime) that is about blowing up (Failure Rate Rises on Mortgages Revised in Late 2008, U.S. Says - Bloomberg.com). In two months, Alt-A and Option ARM mortgage will begin reset. Not to mention job losses going through the roof. Not to mention that Prime mortgage will fall apart due to job losses. Credit card default will be widespread and not limited to mortgage problems. And I haven't mentioned commercial mortgage default.California won't bottom within 6 months and Hawaii won't bottom within 2 years. That's too optimistic. This problem will not be over until well into 2011, if President Obama handles it correctly. Else, there will be no "bottom" for a long while.
. . . California won't bottom within 6 months and Hawaii won't bottom within 2 years. That's too optimistic. This problem will not be over until well into 2011, if President Obama handles it correctly. Else, there will be no "bottom" for a long while.
Today's Honolulu Star-Bulletin disagrees with your observations, they say they think that Oahu at least has bottomed, citing a recent rise in the median price back to over $600,000. Isle housing bottom seen - Business - Starbulletin.com
I do think we are probably looking at a U-shaped recovery instead of the quicker V-shaped progress we'd prefer.
Below is a link to very interesting article about California Real Estate - Most of Hawaii's tourists come from California.
I was going to ask if that meant that most of Hawaii's tourists arrive from California airports, which would be an irrelevant statement, but then I read your post below. You can't argue with empirical data.
Quote:
Originally Posted by HankDfrmSD
I said that without checking, but decided, after your comment, that I'd get a little data. I have records on a vacation rental that go back about twenty years. They are in an old dos program that allows you to sort by various parameters. Here's what I found:
Total bookings in all those years: 385
From Colorado: 20
From Texas: 25
From Oregon: 10
From Washington: 14
From Nevada: 6
From California: 148
Today's Honolulu Star-Bulletin disagrees with your observations, they say they think that Oahu at least has bottomed, citing a recent rise in the median price back to over $600,000. Isle housing bottom seen - Business - Starbulletin.com
I do think we are probably looking at a U-shaped recovery instead of the quicker V-shaped progress we'd prefer.
Whynot...thanks for the article...very interesting. It seems that there are positive indicators out there, but, there does not seem to be an explanation for why the median prices have come back up. With all of the foreclosures you would think that the median price would trend downward. It makes no sense. Even if there are more sales...you would think that people would be buying cheaper....not the more expensive. Thoughts.....what's going on?
Prices are probably up on Oahu slightly because of spring increase in activity (a normal event depsite the economy; you have to ask is it compared to last year same period, or the previous month which is a different season and not as good a comparison), and perhaps more people migrating to Oahu for employment. And hopefully those on Oahu are gaining confidence, which helps the market. An Obama effect? It would be good! Neighbor islands are down:
Parts of California are now seeing multiple bids, an indication that many feel the deals are good even though more mortgage resets are coming. Unemployment is still increasing in California however.
The Hilo paper just had an article yesterday about the February tourism numbers being thirteen percent lower than last year which was a dismal year by itself. They said less than two thirds of the hotel rooms were occupied. I don't think we will see an upswing in employment on this island this year. That doesn't keep people from other places from buying houses here though. There are still a few folks who will buy a house in Hawaii - sometimes sight unseen, move over here and then expect to find a job to cover the mortgage. If they can bring mainland style employment with them, it might work. If they need a job, then it doesn't usually work since the wages are lower than comparable mainland work - if they can find a comparable job at all. The living expenses are higher, too, so the two ends just never meet but they will come, buy a house and struggle for awhile so the house sales numbers look a little better for a bit. This is mostly a winter/spring phenomenon.
Prices are probably up on Oahu slightly because of spring increase in activity (a normal event depsite the economy; you have to ask is it compared to last year same period, or the previous month which is a different season and not as good a comparison), and perhaps more people migrating to Oahu for employment. And hopefully those on Oahu are gaining confidence, which helps the market. An Obama effect? It would be good! Neighbor islands are down:
Parts of California are now seeing multiple bids, an indication that many feel the deals are good even though more mortgage resets are coming. Unemployment is still increasing in California however.
SkyBob, very interesting info!
These numbers are summarized, with new commentary, in this morning's (4/7) Honolulu Advertiser. More bad news:
One piece of information that I see as a positive for our Big Island market is that we currently have 272 homes in escrow. What happens with the individual sales remains to be seen, of course, but I think that this is an improvement over the last few months. This may be an indication that buyers are getting back into the market.
From the article above, re: the Big Island: There were 91 sales last month, compared with 103 a year earlier. The median price was $313,000 compared with $389,000 in the same period.
The housing numbers on Kauai, Maui and the Big Island are very scary. Question is, will the same happen on Oahu at some point.
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