Lenders Slowing Recovery of Honolulu Real Estate Market
September 14th, 2009 categories: Mortgages & Financing
As a Honolulu Realtor that is in the core Honolulu real estate market everyday, I am sensing that it would like to start moving up! Because the banking industry has instituted very tight lending and appraising guidelines, the market has been held back from a quick and stronger recovery. Here is why.
1. Appraisers are arriving at values in the lower range of the estimated value for a given property. This limits the amount a buyer can pay and therefore the amount a seller will net from a sale. Since many sellers become buyers, the lower value they receive for their home impedes their ability to pay more for their next property.
2. Lenders are requiring larger down payments from buyers. By increasing the amount of cash required from a buyer, lenders are shrinking the pool of potential buyers and the fewer buyers in a given market, the less demand and the weaker the market.
3. Lenders have dramatically tightened the underwriting process. Like number 2 above, the more stringent a lender makes the rules for approving a loan, the fewer the number of buyers that can buy and the less demand for Honolulu homes and condos and lower demand means eliminates pressure for a market to recover.
I am venting a bit, but it needs to be done. Since the Government is into everything these days, we need to let our elected officials know that a wise loosening of lending and appraising guidelines would be good for the economy and the Honolulu house and condo market.
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.
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A good bit of venting. They went to extremes, and they need to soften a bit to help the buyers and sellers.