Economist Predicts Hawaii Recovery In 2011
October 30th, 2009 categories: Rants & Riffs
Paul Brewbaker is one of my favorite economists. Since following him beginning in 1991, I have found him to make insightful predictions, many of which I disagree with at first. Paul is quoted in the Pacific Business News as forecasting a turn in the Hawaii economy in 2011. This may mean more of the same bumpy ride in 2010.
“Slow recovery seems likely to leave unemployment rates unchanged until 2011,” Brewbaker, the bank’s senior economic adviser, wrote in the forecast posted on the bank’s Web site this week. “A jobless recovery like the one in 2002-03 is a likely scenario at least in 2010.” CLICK HERE TO READ THE PACIFIC BUSINESS NEW ARTICLE
CLICK HERE FOR A COPY OF THE ECONOMIC FORECAST
How does this apply Honolulu Real Estate? Here are a three ways the Oahu real estate market might be impacted.
1. The tale of two cities. I believe Oahu will continue to be dissected into 2 markets. The core Honolulu market which I believe will remain flat or see slight decreases in values over the next 18 months. The second is rest of Oahu, but not including Mililani (Waipahu, Waipio Gentry, Kapolei, Makakilo, Ewa Beach, Waianae and the north shore), job losses and higher inventory will probably more negatively impact these areas and, therefore, I expect to see lower values in this area.
2. The local market will drive the bus. For now, I expect to see locals (people that live here) be the prime players in our real estate market. This is because the local person expects to be here for the long-term and may see these low prices as opportunities to get into the market at cheap prices. Their long hold horizon means that they can withstand possible short-term shifts down in market prices.
3. Sluggishness in properties that require jumbo financing. Loans larger than current conventional maximums have been hard to obtain and terms for these loans can be punitive as compared to conventional FNMA and FreddieMac loans. The lack of good large loan financing means prices for homes and condos in the upper end could see significant downward pressure. All of these factors mean that buyers in the upper segment should expect to be able to negotiate exceptional prices and terms. Sellers in the upper end would be well served to get sold now, because a softening market and long day on market times will end up making them net less from the sale.
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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I am sure this will not make many happy. Good info to let people know what is going on.
I just wanted to thank you very much for this illuminating article. I have already bookmarked your site, when I have more free time I am going to have to do some further browsing. Well back to my dreaming of Panama or back to the books – I wonder which one is going to win out.