Kona Kohala Blog

The number of Short Sales continues to climb while Foreclosures are holding steady due to regular sales.  Because short sales are still taking three to five months to close, the number of foreclosures will begin to rise in the very near future with predictions from Bank of America for a three fold increase in that number by the end of January.

Rumors out of Washington D.C. are still about a new Home Buyer's Tax Credit, this one applying to all home buyers who are purchasing a primary residence, not just first timers.

This is one way to get the market started again.  With the end of the Cash for Clunkers and the 1st time Home Buyer's Tax Credit the economy seems to have slipped back into the doldrums.  Corporate profits remain strong due to cost cutting measures and layoffs but even that can only go so far.

We're also running out of investors since we were drawing from a limited number to begin with.  When demand drops off as it will, prices will have to continue to fall in order to qualify more people to buy.

Fortunately or unfortunately, depending on which side of the table you're on, the increasing number of foreclosure will continue to bring more properties to market and each with lower price tags.  Look for foreclosures to continue to drive the price wars with short sales, which are tied to foreclosure sales, adding downward pressure to the market.

I believe the "recovery" we're seeing right now will be shallow and short lived.  Keep you eyes on the unemployment figures; only when that number ceases to grow will we see any real, sustainable recovery.  People need to go to work and feel secure in their jobs in order to spend money.  Until that happens, look for the government for more stimulus money and more debt.

It's time to reduce taxes on business and provide incentives for them to expand and update their equipment.  With a weak dollar there is no better time to focus on exports and maybe put people back to work.