Buyers Advantage
There’s every indication that we will continue to see many foreclosures coming into the West Hawaii real estate market during the remainder of this year. Note, however, that foreclosures here in Hawaii may dry up faster than on the mainland, because we traditionally have not had as many foreclosures as other harder-hit states.
Interest rates will be going up eventually, but for now these two important factors–foreclosure inventory and interest rates–are favorable for buyers.
A Market Nuance
Another subtle trend during this difficult economic period seems to be that buyers are showing different tendencies in the type of real estate listings they search for.
Many buyers seem to be more interested in, for example, the 15,000 sq ft lot in closer proximity to population centers than in larger properties farther out.
I’ve observed this in the past–in a difficult economy, buyers feel more secure with smaller properties, closer in. I think the trend will reverse, as it has in the past, when the general emotional outlook shifts back to the more positive perspective of better times.
My current observation is that this provides an opportunity for aggressive buyers, as there are a number of 1 acre + properties near Kailua-Kona and properties further out from the population centers all along the Kona-Kohala coast that can be bought at good prices because of this supply and demand nuance.
Decreased demand has pushed the value of these properties in a downward direction, but buyers must stay vigilant so as not to miss an opportunity to get into the West Hawaii market before demand begins to push prices back up.
Banks and the Distressed Property Market
A continuing national trend that is obviously effecting us here in the Hawaii foreclosure and short sale market is that the national banks and mortgage lenders are still in turmoil with their substandard mortgage loan portfolios and are managing them very poorly.
In many cases, they are hampered by inefficient systems and are staffed by overworked and largely inexperienced hourly employees, resulting in unrecognized opportunities, bad timing and, often, less-than-quality consideration for their customers. They will continue to leave a lot of money on the table with their approach to the situation, as they did in the outset of the problem, when they acquired the assets. One wonders, were any lessons really learned?
However, I am pleased to report that, in contrast, two of Hawaii’s local banks, Bank of Hawaii and First Hawaiian Bank, are weathering the financial storm well–more like our Canadian friends with their conservative banking practices.
To illustrate, Bank of Hawaii was named America’s Best Bank by Forbes earlier this year. Click here to read why BOH’s executive director Allan Landon says that, sometimes, “boring is good.”
