The 2010 Hawaii Real Estate Forecast seminar took place on January 22, 2010, at the Hawaii Convention Center where a few hundred professionals gathered to hear our local industry leaders speak on behalf of their sectors and how they expect 2010 to play out. I would like to share some of their forecast with you now.
Paul Brewbaker of TZ Economics explained that the indicators for Oahu Single Family Homes reflects that prices"hit the bottom"in May 2009 as did the mainland markets. Andour Oahu condo prices "hit the bottom" during the 3rd Quarter of 2009 after our Single Family Homes. Since then, sales have increased and inventory has been absorbed. Brewbaker predicts that Residential Real Estate will maintain its stability for 2010 and by 2013 prices could begin increasing steadily again. History tells us that housing is the "first one in and the first one out" of feeling the effects of a recession so based on Brewbaker's analysis the recession has ended.
Mike Hamasu of Colliers Monroe Friedlander spoke regarding the Commercial sector with less optimism due to the fact that lenders are more reluctant to mortgage commercial properties today. Hamasu's projects the commercial sector may get worse before it gets better due to the large number of balloon loans that are expected to come due but with limited commercial financing available, few businesses will be able to meet their lenders expectations. Local business owners will feel the pinch the most as they will have to cut costs in order to keep doors open.Unemployment is projected to hold at current levels.Again we look to history which tells us that unemployment is usually the "last one in and last one out" of feeling the effects of a recession. Businesses and landlords will have to ride this wave while the economy pulls itself free from the dwindling grips of recession.
Mark Bratton also of Collier Monroe Friedlander spoke regarding the Retail sector and C. Kalani Schrader of CB Richard Ellis spoke regarding the Office sector. Both predicted vacancies to increase as more business are forced to either down size or close. However Retail and Office Price Per Square Foot is projected to maintain current levels. Decreasing unemployment will be the indicator when we can expect to see an improvement in the Retail and Office sectors.
C. Mark Ambard of Ambard & Company Real Estate spoke regarding the Industrial sector which has been the hardest hit for some time. Ambard stated Industrial rents have decreased returning to 2003 and 2004 rental rates. Industrial vacancy period is expected to be as high as 10 to 14 months vacancy before finding a replacement tenant. Since land prices have dropped, Ambard predicts the Industrial sector will most likelybe stagnant during the next 3 to 4 years before improving.
Joseph Toy of Hospitality Advisors LLC spoke on behalf of the Tourism sector with surprising news that 2009 ended slightly better then projected. Toy projected visitor count will increase in 2010 as well as visitor spending. This is good news for our local economy.
All and all said... 2010 is the mark of a new decade! Be sure to check our web site for the latest residential reports. Our market snapshot provides a quick means of determining whether our inventory is being absorbed faster than it is being replaced as well as how list prices and sales prices are trending.
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