Someone woke up on the right side of the bed at the Star Bulletin this morning!
This article from June 2, 2008 is quite positive-it reports that the Hawaii Real Estate market is
“Primed for a Soft Landing”.
Looks like they are going to take the high-road with the stats from June and leave the hysteria to the Advertiser. They even mention that June 2007 was a record high for single family homes. It’s a miracle!
This ‘glass half full’ look at the stats is a much better analysis of what is actually going on. However, they could have gone one step further and made another important connection for the Real Estate consumer: falling sales numbers don’t necessarily indicate such a dramatic drop in demand for homes.
Recall from last month’s reports, the media introduced the idea that demand was falling and that buyers were disappearing. Well, unless you saw someone vanish in a cloud of smoke recently, no one is disappearing. Two powerful factors in the falling sales number are high inventories and longer decision times. Buyers are just taking more time to choose a property because there is so much out there, and this can make it seem as though demand is lower than it really is.
If you need evidence that there is still plenty of energy in the market-here it is. According to the Honolulu Board of Realtors, Days on Market (how long it takes for a home to be sold) fell in June to 40 days for single family homes and 39 days for condos. Notice that was not mentioned in either article. Low Days On Market indicates that demand is consistent-new listings are entering the market and well-priced properties are still moving quickly. The inventory for condos actually dropped in June from May.
This article is about a “soft landing” for the real estate market. When we talk about “landings” it’s natural to wonder when and where the market will bottom out. Single Family Home prices had been rising each month since February of 2008 when they hit $599,000. They settled back down in June to $625,000. However, that $599,000 may have been the bottom. Buyers are always looking for the bottom of the market. We may have already passed it. That is the problem with looking for the bottom, you don’t know where it is until it has already passed.
Remember, interest rates are the 800lb gorilla in the room. Small movements in median prices are of little importance compared to the certainty of higher interest rates and the added costs they bring. There is still no reason to wait. It will only cost more money.
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