Joseph Hogin,broker

@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.

http://quickfacts.census.gov/qfd/states/15/15009.html - Sat Sep 12 2009, 00:01