Big Island Hawaii - Kohala Coast real estate update, March 13 2009

Over the past few months my sunny optimism has been stunned into silence. Advisers are saying don't read the news. Pay close attention to the market and prepare for the turn around.

I can't stop reading the news. I'm a voracious reader. I read, listen and watch international and national economists, and discuss the local market with professionals I trust. Consequently, I've been in a funk. I don't know if it's the decision by opinion leaders to moderate the gloom and doom, but this morning I heard a fleeting bit of good news from the powers that be in Honolulu. I didn't hear the source, but someone said prepare now for the 2010 turn around in the real estate market.

I am so ready to believe this. My spirits immediately jumped. I have noticed neighborhoods favored by second homeowners here on the sun drenched Kohala Coast have, for the most part, not been in a value free fall. Sure, the property values have been slipping, but they haven't been dropping like a stone, especially high end property.

I have noticed that neighborhoods favored by permanent residents have been losing value much more quickly. As a reult, those are the homes going into escrow. Granted it may only be a few each week, and some may come back on the market, but the point is there are buyers out there.

At my office in the Hapuna Beach Prince Hotel, in the Mauna Kea Resort, there's been a steady stream of folks dropping by looking for a steal. They are looking for the prices they are seeing in their hometowns. And they continue to be disappointed. The value of homes in tennis and golf resort neighborhoods near the beach, with resort amenities, have slipped in value since 2006, but considering the global circumstances, they are holding their value. Most owners in these posh communities don't have to sell. They would rather give the property to their kids than lose money. As a result, the deal seekers in the one million plus range continue to wait. I caution them to watch interest rates closely. A one point rise in rates can wipe out a heck of a lot of price reduction.

Luxury property investors who really want a deal should lower their sights and notice where the locals are buying. The best neighborhood to find a deal lately in South Kohala is windy Waikoloa Village. Can you find a fixer upper under $300,000? Yes. And it may have a peek-a-boo ocean view. I'd be happy to email you today's list with photo links.

When the muse of hope and blogging strikes me again, I'll see you here. In the meantime I will continue to watch the market, listen to the experts, and keep track of which properties are worth seeing. A hui hou!