Tuesday, August 29, 2006

Glut of Houses on Big Island

The Hawaii Tribune Herald reports that there is "more supply, less demand" in East Hawaii:

The situation is most noticeable in places like Hawaiian Paradise Park, where numerous speculative houses line the red cinder roads, waiting for buyers. In a one-mile stretch on 15th Avenue, five "For Sale" signs can be seen along their respective properties.

After Susan Rosario put her family's two-house lot on the market "a few months" ago, they've had with just two visits and no offers.

"I'll just wait. When they want to buy, they buy," she said of the 25th Avenue property. "If you can find me a buyer, go right ahead."

"There's a lot more supply and a lot less demand. Economics 101," said real estate agent Henry "Hank" Correa Jr., owner of Hank Correa Realty. Asked whether he thought home prices have reached bottom, he said, "I think it's early."

This is confirmed by commenters on Ben Jone's incomparable Housing Bubble Blog. Commenter Kaneui says:

It’s been interesting to watch the bubble expand and now start to deflate here in Hawaii. I sold a property in the Puna district (east Hawaii Island) for someone three years ago, when things were just heating up–everyone was telling me we’d never get our asking price, but we did. And from then on, the market took off.

Well, I was recently talking to a friend who is still in Puna, and he tells me that there are over 40 new spec homes for sale in the Hawaiian Paradise Park subdivision, and not one has sold. My, how times have changed since 2003!

The market in Hawaii is unraveling there first, as Puna has some of the cheapest housing in the state–however, the initial signs of a deflating bubble are already here on O’ahu: YOY sales have declined, and price drops will soon follow. (Never mind the fact that an estate here on Kailua Beach just sold for $24M last month–but again, the very high-end is a separate world…)

I'm on Oahu as well and prices should stop dropping any day now....


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