Foreclosure in 96753>Question Details

Joseph Hogin, Real Estate Pro in kahului, HI

Buyer... What are you waiting for?

Asked by Joseph Hogin, kahului, HI Thu May 24, 2007

Im a Broker here on Maui and was wondering what buyers are waiting for. This seems to be the best time to make offers.
lots of homes on the market to choose from...

Help the community by answering this question:


Joseph, How lucky you are to be a broker in Paradise. I'm finding current buyers seem to only want to make offers when other buyers are making offers on the same property. They only want a property when some one else wants it also.
5 votes Thank Flag Link Fri May 25, 2007
Mitchell Hall, Real Estate Pro in New York, NY
For astronomical prices to come to down to eartly levels and more. Don't worry - it will happen. The question is, how soon.
4 votes Thank Flag Link Tue Jan 1, 2008
I'm waiting for the biggest housing crash in history to transpire so I can buy that $500K house for half price!
3 votes Thank Flag Link Mon Dec 3, 2007
We have a buyer's market here in Michigan too. Buyers are slow to move and they are getting overwhelmed with the choices.
Web Reference:
3 votes Thank Flag Link Sat May 26, 2007
Maureen Fran…, Real Estate Pro in Birmingham, MI
Renting is cheaper, and you don't have to worry about losing thousands of dollars. And you don't have to mow the lawn.
2 votes Thank Flag Link Wed Aug 13, 2008
"I agree. You cannot build for less than you are able to buy at the moment. Interest rates are low and the government is offering tax incentive. You should be considering it if you are on the fence."

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.
2 votes Thank Flag Link Tue Aug 12, 2008
This is not the best time yet!!! Back in the mid '80's people could not give away a home on Maui. People be for warned the housing market will come down. It will come down hard.
2 votes Thank Flag Link Tue Jul 1, 2008
I think buyers are just cautious and a little afraid right now. Buying a house is a huge deal and the thought of losing such a large amount of money makes people hesitant. Only some of the buyers are waiting for a huge price reduction. The rest are more realistic- they're wondering what would happen if they bought the home, and then for some unknown reason had to sell again immediately. If the home's value has dropped at all, they won't even be able to draw even. Plus, they wouldn't have money for the down payment on their next home.

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.
2 votes Thank Flag Link Mon Dec 3, 2007
The reason I waited so long to buy is because prices were just ridiculously high. I have so many friends who, despite their education and finance backgrounds, were convinced into buying a home that they could not afford with "creative financing". Even now, prices keep dropping, why should I buy a run down house when down the street, there is an even better one going for the same or less? Or why should people buy a home an hour commute away when there is comparable homes selling closer to where the jobs are for less??? We're out there, we just don't want to get shafted anymore like friends and relatives. Sellers need to get real with their prices.
2 votes Thank Flag Link Sun Dec 2, 2007
Joseph.. my parents have their home in Kailua-Kona on the market .. it is a lovely large custom built home with stunning views and not many people seem to be looking at the can see it at the link below,,
2 votes Thank Flag Link Thu May 24, 2007
Kaye Thomas, Real Estate Pro in Manhattan Beach, CA
Exactly the same thing in Scottsdale...prices aren't going to get much better. Interest rates are rock bottom. What are you waiting for?
1 vote Thank Flag Link Sat May 28, 2011
If you pay rent, it's like throwing the money away. Add it all up over 10, 20, 30 years and where are you... still renting when you could have bought something in that time. Home ownership puts you in control of your living space.
Web Reference:
1 vote Thank Flag Link Thu Jun 18, 2009
We were just recently at peak home ownership levels. And was there anybody who, until recently, couldn't get a loan?

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?
1 vote Thank Flag Link Sun Jul 27, 2008
Obviously, this question is 10,000% dependent on WHERE you're looking to buy. HUGE difference between the coasts / sunbelt / Hawaii and Ohio and Michigan or anywhere in the Midwest for that matter (I laugh just thinking about this statement).

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.
1 vote Thank Flag Link Sun Jul 27, 2008
Buyers are waiting for lower prices and/ or the "perfect" house. The media has led buyers to believe that if they wait they will get a mansion at a bungalows price.
1 vote Thank Flag Link Sun Dec 2, 2007
I'm waiting for the prices to be slightly more realistic. They are still way too inflated. I lived on Maui before and what people are asking for is just not realistic. It reminds me of California in the 90s
0 votes Thank Flag Link Tue Aug 21, 2012
"If you pay rent, it's like throwing the money away. Add it all up over 10, 20, 30 years and where are you... still renting when you could have bought something in that time. Home ownership puts you in control of your living space."

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!!
0 votes Thank Flag Link Sun Jan 2, 2011
Get ready for the second round down. Tax credit - GONE. Useless and wasteful "economic stimulus" - GONE. Homeownership level - outrageously and unsustainably high. Lending standards - it's like an interview at the heaven's gate. You scoree less than 99.99%, and they send you down the express elevator to Mr. D himself. Shadown inventory of foreclosures - HUGE. Do yourself a favor and sign up for or some other site that shows pre-F activity.

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.
0 votes Thank Flag Link Wed Sep 1, 2010
Aloha Joseph,

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
0 votes Thank Flag Link Sat Aug 28, 2010
@Misa: Yes, I think the market will decline further. It is about supply and demand. As the banks limit who can ride, prices will naturally lower as the market corrects itself. Preventing people from buying at the entry level will make it more difficult for people to move up which will have a cascading effect on prices. I doubt that'll happen all at once like the stock market but death by a thousand cuts. How far it drops is yet to be determined but I do think values will fall (at least in Maui) until the average home is sold for about $220-250k with 20% deposit, using census wage numbers. In other words, the average payment for a homeowner will be about $1200/mo (not adjusted for inflation).

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.
0 votes Thank Flag Link Sat Sep 12, 2009
@Dan, I watched the video while ago and it is quite a ride indeed. You buy the ticket, and stay on ride...

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.
0 votes Thank Flag Link Tue Sep 8, 2009
I find it interesting to read through this post almost a 2 years later. It seems a lot of realtors have this same question. I think you should have an answer by now.

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:
0 votes Thank Flag Link Tue Sep 8, 2009
We (buyers) are broke too, not just the homeowners!...haha. Honestly, I think the lending standards have tightened up along with credit getting worst due to increased borrowing and CC companies doing their devious actions and hurting people's credit. Such as lowering their limits, negatively impacting their credit scores. You could write a book on all the reason's for not buying a home yet, but mainly the prices are still too high. IMO
0 votes Thank Flag Link Wed Jul 1, 2009
When you know you are ready, you would jump. It's never be a good idea that you jump because someone told you so. Waiting is one of the decision not to make decision (for now) and it's neutral than yes or no answer. Warren Buffet's word of wisdom, one says,"Be fearful when others are greedy, and greedy when others are fearful", and another says, "Avoid the costly mistakes of others".

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.
0 votes Thank Flag Link Sat Aug 16, 2008
It's always a good time to buy, it's really just a matter of price at this point. I am working with one guy, looks at everything but buys nothing. He seems to think as soon as he closes prices are going to drop by 50% and he will be stuck like so many are right now. We need to prepare the buyers to not be afraid to negotiate, not being afraid to walk away if the seller will not negotiate to a price the ready, willing and able buyer is willing to pay. After all, what a ready, willing and able buyer are willing to pay IS fair market value. Sellers need to face reality and see the market for what it is ... a buyers market. The pot of gold they had last year has turned into a pot of silver and the homes are just not worth what they were. If they want to sell they need to price to sell. We as agents need to be willing to walk away from overpriced listings and sellers that have not faced reality and are not willing to take our advice... we are the pros and they should let us do our jobs instead of expecting us to perform miracles in fantasy land.
0 votes Thank Flag Link Wed Aug 13, 2008
Your guess is as good as mine as to what is happening in Maui. Median condos prices have been rising!

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.
0 votes Thank Flag Link Tue May 20, 2008
The actions of Mayor Tavares to stop condo owners from short term rentals reduces cash flows and makes the properties worth less, much less, so buyers like me think that I will be buying at an inflated price and buying someone else's problem. So we will wait for a crash, or go somewhere else, or buy a cheaper property.
0 votes Thank Flag Link Sun Dec 2, 2007
Joseph, feedback I've had is that prospective buyers expect that there will be a big crash here in Maui and that prime properties will be available for 50% below today's levels! Too much media coverage of sub-prime problems, the risk of rising foreclosures and weak national sales is scaring people.
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!
0 votes Thank Flag Link Mon Sep 10, 2007
Mitchell I think you have hit on something that we are also seeing here in Manhattan Beach Ca.. I suspect it has to do with buyers still being afraid to trust their judgement just in case prices falter.. but if someone else likes the property then it must be a good deal.. Yes?
0 votes Thank Flag Link Sun May 27, 2007
Kaye Thomas, Real Estate Pro in Manhattan Beach, CA
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