Why Pay More? Buy Your Honolulu Home Now!

September 4th, 2009 categories: For Buyers, The Market

If you are a buyer waiting for the Honolulu home market to bottom out, then you may not want to wait much longer. Wednesday and Thursday’s posts pay a great deal of attention to how low core Honolulu’s inventory has become and, as a result, I am surprised that there is not more momentum in the real estate market. If the factors suppressing more market exuberance disappeared, then I the Honolulu market could turn on a dime. Here is what to watch.

1. Health care reform. If it is dead on arrival, I believe financial markets will respond positively and this optimism will feed into a market that is currently recovering from the economic trauma of last fall and earlier this year. On the flip side, if a significant government takeover of health care passes, due to the cost, one could see a very negative impact in financial markets and, thus, the real estate markets. Given the Presidents job approval numbers and voter angst against a take over, let’s hope it dies a quick death.

2. Tight lending requirements. If my experience as a Honolulu Realtor is representative of the balance of the market, lenders are making loans grudgingly. When, notice I did not write “if”, lenders loosen their barrowing guidelines more people will be able to buy and pent up demand will be released. More buyers in a market drive up values. I believe this loosening of lending rule is inevitable and here is why, banks make money when they lend money and over the last year it seems that banks have cut back on making loans in a major way. This means they have been stockpiling cash that is at work efficientally. Once one bank breaks from the pack and starts lending, the balance will follow because the followers will not want to lose market share to the bank leading the charge.

3. Appraisal rules. Since May 1^st appraisal rules have been tightened to the point of breaking. The change in the rules has placed an artificial damper on values since appraisers are unanimously appraising properties at low valuations. In the last 6 months, I have had more than one property that would have sold for more money, but because the data was not available to support the price the property was sold at lower a value than the buyer was willing to pay. Like banking guidelines, as appraisal rules change to become looser, buyers will be able to pay more and values will rise.

4. National market improving. Markets are driven by momentum of information and right now it seems the vast majority of mass media are reporting that things are getting better, markets are bottoming and that now may be a very good time to buy. As evidence, here is a quote from an article posted at the Wall Street Journal’s web site.

“In short, the data suggest that real-estate prices hit a bottom some time during the second quarter, and have now begun to rise. There’s no way to be certain that this marks the end of the long, painful correction that followed the real-estate bubble, but clearly prices are no longer in free-fall. That means if you’ve been sitting on the fence, it’s time to act.” CLICK HERE TO READ THE WALL STREET JOURNAL ARTICLE

As more and more positive information spreads, you will see more consumers willing to get back into the real estate market and, as this happens, there will be more pressure on real estate values.

SEARCH FOR YOUR HONOLULU HOME

If you would like to discuss your real estate needs, feel free to call me at 808-737-2093 or toll free at 877-737-2093. You can email me at keahi@lava.net.

This entry was posted on Friday, September 4th, 2009 at 8:20 am and is filed under For Buyers, The Market. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.