Kona Kohala Blog

I had a discussion with a new friend today about the pricing of condos in the Mauna Lani Resort.  Marv commented that he believed prices were good for buyers looking to purchase in Hawaii.  He'd been watching the market for many years and even though he's not a Realtor, he sees what many of us see, many well priced condos and homes in West Hawaii for sale today.

I've always talked about real estate purchases as long term investments.  If you buy today, regardless of the price, in 5 to 7 years you will be ahead of the game, if history repeats itself as it always has.  I remember Louis Rukeyser many years ago saying there is no bad time to buy stocks and his logic was the same as mine.  In this country, we have a very dynamic stock market and a very dynamic real estate market.

What is surprising to many akamai (wise) investors is that there were so many people who believed and bet their money, that the real estate market was going to continue to climb even after setting such lofty new highs as it had.  Even after nearly 3 years of declines I still talk to people who think their property is worth what it was at the peak.  You can see some of them in the MLS that have been on the market for 400 to more than 500 days.

The 3 years of declining prices have gotten us to the median price we saw in early 2004, still above what the same property was selling for 5 years ago in 2003.  I say the best time to buy is when you can afford it and then hold on.  If you have the money and your budget allows the extra expenditure and you have savings to carry you through the lean times then buy and buy now.

You never want to find yourself in the position of having to sell.  That is what has gotten so many people into trouble today, they bought something with poor judgement and a poor loan and now they are taking a loss or worse yet, going into foreclosure.

Buying a home now, assuming you can afford it, may be one of the smartest moves you could make.  Because real estate cycles are real and because economic cycles are real, we will see a recovery in the future.  If history remains true, the next up tick will exceed the one experienced in 2005/6.  That means buying now, while prices are low and interest rates are low (they won't stay there that much longer, IMHO) and there is a large inventory to choose from almost has to bring you a nice reward down the road aways.

You should, of course, talk to your financial planner or tax professional about the credibility of such a move.  There are many financial advantages to owning a home, even a second home or investment property.  Discuss these advantages with a trusted advisor then contact us at Ferrari Pacific Realty and we'll get started on finding the perfect fit for your future financial plans.

If you want to keep track of the market here in West Hawaii, sign up for our free, no obligation Aloha Friday newsletter.  Each week, usually, you'll receive the letter in your email on Thursday afternoon so just email me at Robert@FerrariPacificRealty.com and I'll put you on the list.  This will help you stay abreast of not only the real estate market but also some of the goings on in our little piece of paradise.  aloha