Aloha, Theron, great observations! You are right on the money, imho, except that at least out here on the Big Island, home prices have ALREADY fallen 30-50% in most areas and neighborhoods. Tourism has been crushed here since Aloha and ATA left last April/May, foreclosures have been on the rise for the past 12 months, and it's incredibly difficult for ANY borrower to get a loan right now. Additionally, we've been seelng lots of layoffs and our friends and 'ohana out of work. It's already "bad." But this shouldn't be a huge surprise, statistics show the height of the last market run up was July 2005. I've been watching prices and number of real estate transactions drop for the past 3.25 years now!
But we're still selling property because (lucky us!) Hawaii is still "paradise" and a "dream" for many, many people. Buyers with cash walk into our office and our computer screens daily because when they see those values at 50% of 3 years ago, or they see an actual cash flow positive property investment opportunity, they are excited about making their dreams come true. Every day more and more people retire or think about retiring in Hawaii. Every day another visitor falls in love with Hawaii and wants to own a second - or third - home. Hawaii is still desirable. And prices are down - way down - especially for cash buyers during a credit crunch. It's a great time to buy.
The market will turn around eventually - how do I know? They all - and always - do. So will it be worse next year? I guess it depends who you're talking to. If you're talking with a seller facing financial difficulty, well, that's one perspective. If you're talking to me, I'll tell you I believe next year is going to be a great year because many of the people who have been waiting on the sidelines to buy Hawaii for prices to come down - they'll start buying. In fact, some of them already have. After all, who can resist a 50% off sale??
Best of luck to you, Theron. Email me directly if I can be of assistance to you. email@example.com. It Takes Courage to Live on a Rock! Katie Minkus, R(B).