Aloha to all of our Hawaii lovers,
Mahalo for coming back to another blog visit at 'Best Hawaii Vacation' blog. A lot of you who consider buying Hawaii real estate as an investment or vacation rental or as a retirement place for later in your life, will find interesting updates regards current real estate trends in Hawaii. Realtors might find the article of value as well. We are grateful that our friend Bill Jardine from the Big Island is back sharing his profound real estate knowledge of the Aloha State with all of us. Just as the island life has changed tremendously over the past years, so has real estate as proven in Bill's old articles. What to expect of the real estate market in 2013? This is what Bill thinks.
"As most of you know there are two sides to residential real estate. The Waimea news letter, written and posted each month, talks about the "experience" side of real estate … what it is like to live here on the Big Island’s Kohala Coast, which is what your residential real estate is for, after all. The other side of real estate is the "money" side, and we are all very interested in both sides of our realty. Everyone I know wants to know what is happening with real estate values, and if you own real estate you know that the value of your property is extremely important to you!
Summary of activity:
We are seeing distressed properties getting purchased at a rapid rate, as you might expect. We still have clients sitting on the side lines, waiting for the best time to buy, and those that are have now missed the bottom of the market and will now be faced with competition for good properties, although prices are still relatively low compared to replacement cost.
We have seen brisk business in both middle class housing as well as resort condos, and inventory is drying up. The combination of super cheap mortgages and houses priced below replacement cost has created a demand for decent houses as well as some speculation for resort condominiums that can be used as vacation rentals.
Although the very high-end properties are not as attractive as properties below $2,000,000, we have also seen a substantial uptick in properties being purchased in the multi-million dollar range. Kukio, Hualalai, Waikoloa, Mauna Lani and Mauna Kea Resorts have all seen an influx of new buyers for luxury homes that are priced well below replacement cost.
There are quite a few property buyers who now believe that their equity is better off in real estate than in other forms of investment. This is not necessarily true, since well-managed stock portfolios are showing good gains as the general economy begins to stabilize and some of the international panic is beginning to subside. Nonetheless, we have seen examples of individuals cashing in their stocks and buy real estate as an inflation hedge and useable asset. Our advice remains having some of each and not over loading one portion of you asset portfolio.
Outlook for 2013:
What you can expect to see over the coming year is a rapid increase in real estate purchases that will seem surprising to those who have become used to the slow conditions of the past few years. Properties which look unreasonably priced today will be looking quite reasonable by the Fall, since we have so few places to choose from at any given time.
Example:
A friend would like $2,000,000 for his very nice house. Right now there are three other houses in his neighborhood which are a better deal, so he will need to wait until those sell before his property looks reasonable. My guess is that he won’t need to wait too many months before he is the price leader in his category.
Our point of view:
Our clients are all buyers and are quite intelligent and knowledgeable about real estate. They do not want to deal directly with the agency that represents the Sellers, since their interests are the opposite of the Seller’s interests. They want to use an agent without a conflict of interest who can negotiate the lowest price. This is now the trend in the US, and our agency is the first Exclusive Buyers Agency in Hawaii negotiating the lowest price possible, while the other agencies are obligated by law to get as much as they can for their sellers.
You make your money when you BUY your property!"
Great mantra Bill to finish your article. Anybody who'd like to comment on it, is most welcome. Mahalo and aloha, Pua KohalaCoastWeb
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