Predictions For The Honolulu Real Estate Market
January 19th, 2010 categories: The Market
A Forbes writer, Stephane Fitch, had a very interesting macro view on the U.S. real estate market. Though his article leans toward the commercial side of the business, mental gymnastics will allow us to draw some information relevant to the Honolulu real estate market. Here is the gist of his article.
“The year 2010 will see an end to “extend and pretend,” as in banks avoiding foreclosure on highly indebted office buildings, warehouses and shopping malls with loans coming due.” CLICK HERE TO READ THE FORBES ARTICLE
If he is right, how will this impact Oahu real estate?
1. Since lenders will be more aggressive in pursuing foreclosure, we may see inventory build in the areas outside the core of Honolulu (Ewa, Kapolei, Makakilo, the north shore, west Oahu). There may be foreclosures in the most desirable areas of Honolulu, but I don’t believe we will see a significant enough volume to impact overall values in this segment of our market.
2. Increasing office vacancy rates will put pressure on rental rates and this year may be a great time to lock in a long-term lease for your business.
3. Since our market is not over-built like many mainland markets, if lenders dump significant numbers of REO’s into the market, we may see minor downward pressure on values outside of the core Honolulu area. However, given our current low levels of inventory we will need to see 50% more inventory come on the market to see significant negative shifts in prices.
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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