Everyone's talking about the "BUBBLE" and how we are in a changing market. The media, Local newspapers, and even professional realtors. Is it really happening???
Historically in Hawaii our busiest times for real estate is during the summer months and will normally taper off early September. Personally I must say that this has been the slowest summer I've seen especially comparing it to last year. But does this mean we are in a bubble? I really don't think so at this point. Don't get me wrong, I'm not saying we will have another record breaking year but I do think the market will level off and sustain its current values in majority of our market places. Some markets with limited interest will suffer a decline in prices but I don't expect a repeat of what happened here in the early 90's.
Let's break it down a little. Are prices coming down? Is there more inventory? Answering these questions myself I must say yes. Wait don't flame me yet. Yes prices are being reduced and yes we do have much more inventory than the past 5 years. But let's put this all in perspective. Prices are coming down mainly for the fact that we have lots of Sellers and Realtors that are just not realistic. Overpricing their homes for $50k + higher than the last sale and not entertaining any realistic offers being submitted. With this we've been seeing the days on market increase, lots of price reducing, and much more inventory.
All in all our market in Hawaii historically has 10 year cycles which are 5 years up and
5 years sideward. What happened in the late 80's early 90's were
influenced strongly from an outside source, the Japanese economy. This
time around we didn't really have an outside source to our market till
only about early last year. On top of that we also have the Baby
Boomers and 30 year low interest rates that really helped our market
along.
Being that my crystal ball is broken and has never worked I must say that only time will tell. One thing for sure, we will start needing to use our sales skills that we didn't need to for the last 4 years.
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