N Kohala Home Sales from December 2002 to December 2007

Aloha Len,

Our current market is alive and healthy (since the beginning of the year 131 homes have sold and 130 parcels have sold). We are working at less volume and lower prices.

In my opinion, we peaked around April or May of 2005. Two major forces brought about this peak and subsequent downward trend. Boomers and easy money. In review the boomer years are from 1946 to 1964. The easy money seems to have started around 2001 or 2002.

The leading edge that lead to this peak was caused by the boomer generation when they discovered the relatively low prices we had. They started a buying frenzy back in 2004. They had easy money from what I call warm body or 98.6 degree loans, or from equity they had from pulled out of their over appraised homes in the eastern 48. ("warm body or "98.6 degrees" seemed to be the only qualifications needed to obtain a loan from any lender). When the easy money dried up the demand went down. When demand went down, volume went down taking prices down also.

What makes Hawaii now very attractive to Canadians, Australians, Europeans, Koreans, Japanese and now the Chinese are: our home prices are down about 34% AND the US dollar is down by about 23%. In other words when we compare Hawaii land and homes in April of 2004 to our current prices we now at a discount of about 57%!

Don't be shy with any questions you might have about our market.  I would be delighted to share data with you.

John Petrella, REALTOR®
ABR®, GRI, Broker/Owner

Direct: 808.640.3953
Local@LocalHawaiiRealEstate.com

Local Hawaii Real Estate
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Hilo, HI  96720

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