Sorry, but that is an idiotic answer by yet another idiotic realtor.
Simply because you cannot build for less than you are able to buy in some areas (ie. Las Vegas) does not make a good buy. It simply means if you want to build a house, you are better off just buying one already built cost-wise. Positive cash flow is what makes a potential good buy.
Interest rates are low does not mean squat. Housing affordability is also still low as well.
Government tax incentives. Fine that is a positive, but a drop in the bucket considering costs of ownership.
Another realtor just hyping things his/her way. If anyone has half a brain, it is always easy to rip your "it's a good time to buy" argument to shreds.
Also, a lot of people are struggling with a cash crunch, and many cannot qualify for that 'dream home' that they could have bought a few years ago. Obtaining credit is much more difficult than it used to be.
What happened? We overbuilt and overbought. People who should never have bought, be it speculators or "should have always been" renters will be losing their homes for the foreseeable future.
How hard is this to understand? Or do you believe that real estate always goes up and it is always a good time to buy?
Simply because "there are lots of homes on the market" does not equal "best time to buy." Where do realtors learn this logic?
The Midwest suffers not only from a lending crash and horrible markets, but for many affluent and even not so affluent new retirees... ...the goal is to move to the Sunbelt or at least ditch the big house for the custom condo. Midwestern retirees who can't sell are simply buying the new house elsewhere and sitting on their empty former homes till they sell.
Midwestern baby boomers all built the McMansions that few people younger than them are willing to buy or can afford to even touch. That and the younger affluent buyers are far more interested than ever in living in the city or old-world, walking neighborhoods like Shaker Heights. I think the oil crises is going to accelerate this trend.
What a STUPID argument! Do you really expect people to not have a brain? Spending a million for a house in maui (considering no mortgage; with a mortgage you'll spend a million and a half), you can use that money and leave it in bonds, stocks, bank, whatever and make enough to cover rent and more leftover. 5% on a million or million and a half is 50-75k. Rent will not cost that much. DO THE MATH!!
I dare say that new home sales, if including cancelations and other not-tracked data can actually get NEGATIVE. I mean, we just cracked below 300K. That's unheard of.
The only thing helping is the last remaining useless stimulus - the low interest rate. Thankfully, banks have wisened up and won't lend to anyone short of A+ everything.
So get ready for the worst part.
As a Broker on Molokai, I can attest to the great time it is for buyers. We have historically-low interest rates, soft prices, and some motivated sellers in today's market. Combined, these conditions make for a wonderful opportunity for buyers!
All the Best,
Susan Savage, RB
As I noted before, Maui can be potentially sensitive to the rental market because there is substantially more homes (65K) than households (43K) -- 1/3 more. Source: U.S. Census Bureau. The assumption made by an investor in buying one of those additional housing units is that they could pay the bills renting it out for short term vacation rentals or that they are wealthy enough to pay the bills without needing to rent it out. The key is whether they can they last through the recession? If not, that supply will go up as the demand remains the same -- it could get ugly.
I would think the market is adjusting itself, continue to allow those buyers who has enough available cash for down (20%+ to all cash), while forced out others who have not yet to reach the point to getting into home ownership and its responsibility (holding power). In 2005, all buyers with or without cash flooded into the gate wide open, and many who should have stayed out passed through. Now, gatekeeper is controlling the crowd. Often this gatekeeper has its own agenda (lender, government, regulation...) and we all need to adjust this new environment. Market continue to decline?
Back to roller-coaster, how long and how low it gets is anyone's guess. I would focus who should ride.
I've said this before but it is worth repeating. Home prices will decline until they are at a point people can afford. By that, I mean banks have mostly reverted to old time trends giving mortgages that people can afford on 1/3 of their take home pay. If a family makes $52,000 per year their take home will be about $3200 per month, 1/3 of which is $1075. My guess would be that prices will bottom out at about the $1200/month payment level for the average home in such an area. Some areas will, of course, be more expensive than others. But there must be an entry level market for move ups. I do not think Hawaii will be any different although prices may trend lower as other costs are higher and the recession is likely to limit the second home market for folks from outside the state.
In addition, the market on Maui will especially be sensitive to the trend for long and short term rentals. Correct me if I'm wrong but there seems to be an unusually high number of units that are investor owned. If the landlords do not continue to make enough in rentals over an extended period to make the mortgage and other bills they will be likely to unload or lose their properties.
Lastly, I think this video says a lot about real estate and what we're now seeing: http://www.youtube.com/watch?v=kUldGc06S3U
Any buyer today need to think independently. Only those who clearly examined the timeline, finance and plan of action should and will move, while "dependent" thinkers will rely on media and go along with what others think. Anyone who buy home today have to think long-term with solid finance to support their decision.
The median price of a condominium on Maui rose last month, while the median single-family home price fell, with lower sales in both categories.
The median price of a condo was $600,000, up 23 percent from April 2007, when the median price was $487,500, according to data from the Realtors Association of Maui.
The total number of condo sales for April was 92, down from 116 sold in April 2007. The April figures include the sale of one condo unit on Lanai for $2.5 million. More typical were sales in Kihei on Maui, where the median price from 31 sales of condos there was $499,000.
The median price of a single-family home in Maui County last month was $566,000, down 16 percent from April 2007 when it was $671,000.
The price was based on 72 sales on Maui and one $380,000 home on Lanai. There were 96 sales on Maui alone in April of last year.
I agree with you - it is a great time to be a buyer.... good inventory, prices and terms increasingly negotiable, mortgages still available, etc. Tell the prospective buyer to help drive down prices - Make An Offer!