Regarding the July 2, 2008 Honolulu Advertiser article: “Honolulu Home Prices Fall 8.8% in a Year”
The article doesn’t mention that in June 2007 Honolulu set a record for median prices for single family homes ($685,000). We knew there was no way we would beat or even come close to that $685,000 record this June. We didn’t. No news here. But it does make exciting headlines.
Well, the media can have their day for June, but as the remainder of the 2008 reveals itself, the news isn’t going to be that bad. “Why?” you ask? Well, in September of 2007 the number of sales began to fall. Since the current sport is comparing stats to the previous year, the numbers are going to come closer together year to year as 2008 rolls on. We may even see an increase in the number of sales, year on year, before 2008 is over.
The same will happen for median prices. After the June 2007 record, July 2007 came in at $640,000. This is a number we could hit in July of 2008. And if we do, what is the media going to say? By the way, condos are still doing great.
Other than the excessive negativity of the headline, the remainder of the article put the numbers in a realistic perspective. This was a surprise. Why the disconnect between the headline and the content of the article? The reporter probably didn’t understand what Harvey Shapiro (Honolulu Board’s Economist) was saying.
And who was this lady trying to sell her own property? That particular anecdote reads more like a lesson on why For Sale By Owner doesn’t work, rather than an indicator of a poor market.
Despite this little dip, it’s not a good idea to wait to buy in Hawaii. With interest rates on the rise, any drop in prices is going to be more than offset by the added cost of higher interest. We know the human default position is ‘to wait’. Now is not the time to do so however. Get the good mortgage rates while you can. Property prices will take care of themselves – interest rates cost more money now!
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