In Hawaii's unique real estate market, it's think locally, act locally
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The University of Hawaii’s Economic Research Organization’s quarterly Hawaii forecast update, “Cooling Economy Faces U.S. Headwinds,” characterized the Islands’ construction industry, despite the real estate slowdown, as “sanguine.” In addition, authors Carl Bonham and Byron Gangnes wrote in their executive summary that, in 2008, they expect Hawaii’s economy to continue to grow, unlike the rest of the country: “However, we do not see an end to the current long economic expansion. Moderate job growth will continue next year, and real income will recover to nearly 2 percent growth.”
The authors predict that Hawaii’s visitor industry will likely see its numbers flatten out in 2008, but they expect an upturn in 2009, barring some unforeseen circumstances that negatively affect the Mainland and Japan.
Think Locally, Act Locally
What does this all mean to people who are contemplating a leap back into the real estate pool? Basically, economically speaking, the local waters are fine.
“If you look at our economy, things are going pretty good,” says Cassiday. “It’s great, especially when you compare it to the rest of the country. Besides the anxiety about the national economy, there is no real evidence for the recent pullback, other than buyers’ exhaustion. Overall, 2008 will be a down year, with a potential of turning around in the end,” says Cassiday. “But rates are coming down and you’ll see a small re-fi boost, and the people who have been waiting to come in, will come in. In real estate, the time to buy is when everything sucks, so are you gutsy enough to go for it?”
While guts are certainly important in today’s market, some brains come in handy, too. Hawaii’s exposure to the subprime crisis has been minimal, especially in comparison with some of our Mainland neighbors. As has been widely reported, the Islands’ foreclosure rates are still among the lowest in the country. So while nerves are still frayed, for some, the post-subprime landscape may be one that is a little more familiar and understandable.
“The zero-down type of loans are pretty much gone, but they probably shouldn’t have been there in the first place,” says Realtor Adam Lee. “If you make sure that your paperwork is in order, and you have a down payment, you won’t have a problem getting a loan. Then it comes down to doing good math; does the purchase make mathematical sense to you in the longer term? Before, people would worry so much about jumping on the train at exactly the right time to maximize their investment. Now, it might be good to get on the train early, instead of trying to time everything so perfectly.”
Shelea Boyd is glad that she jumped on that real estate train when she did, when she was ready. After renovations to accommodate Herschel’s wheelchair, the Boyds settled into their new home and new lifestyle. Shelea enjoys teaching fulltime. “It was always meant to be,” she says. Herschel loves his new job.
But Shelea kept her part-time job and continues to work three days a week at Starbucks in faraway Honolulu. It’s a grueling schedule, but Shelea isn’t going to make any changes until she’s gone through a few mortgage-payment cycles and has a better feel for the family’s budget.
“Then I’ll make some decisions, and I can start really enjoying our new home,” she says.
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