Kona Kohala Blog

"The bottom is coming, the bottom is coming", cried Chicken Little as he ran frantically through the yard . . . or something like that.  This time it may be true, the bottom may actually be coming or may be here, for that matter.  The question is, is this "the" bottom or just "a" bottom?

Reading the statistics from Hawaii Information Service, our MLS provider, one gets the impression that we may be at or very near the elusive bottom.  Two of the three main statistics are jittery and bouncing up and down while the third, median price, continues to decline at about a 20% per year rate.

The other two stats are Number of Sales and Volume of Sales, the actual amount of money involved.  In the third quarter we saw an increase in the number of sales and the volume of sales for North Kohala, South Kohala, North Kona and South Kona.  This indicates that both investors and home buyers are moving back into the market place; prices have gotten low enough that buyers are seeing value.

In October the number of sales is up in some districts and down in others but all very near zero meaning the decline may be coming to an end.  The volume is also jittery but moving around that same zero percent change indicating that we may be leaving the many months of declines behind us, for now.

The potential mar on the otherwise bright and shiny housing future is the fact that despite the administrations bobble heads proclamations of an end to the recession, jobs continue to be lost.  Until that changes, the average American will not be able to get back into the housing market regardless of how low prices get; no income, no loan qualification.

The people we see taking advantage of current market prices are those wise few who saved money, paid off debt and still have jobs.  Many of these are investors.  The others are the ones who were raised by parents who taught them the worth of a dollar, the value of hard work and how to plan their future.  Unfortunately, this is a small percentage of the American people and we will soon see their appetite for housing satisfied, then we will need the rest of the country to come around in order to maintain any kind of recovery.

And therein lies the rub, so to speak.  As soon as we run out of the current group of buyers, investors and those smart enough to have put some money away, we are going to have to wait until the jobs market picks up in order to see any new buyers on the horizon.

Since this administration is running full speed ahead with blinders on, seemingly unaware of history, I don't see the job turn around anywhere in our future.  The government has demonstrated repeatedly its inability to run a business.  For examples we need only look at Amtrack, the postal system, and now the banking industry and General Motors and Chrysler.  If it wasn't for large and continuous infusions of taxpayer money each of these examples would be nothing more than a footnote in a history book and some may be inspite of the cash infusions.

Fortunately, we still have elections and a sobering electorate.  The elections of 2010 will tell a lot about our future.  One thing we should have learned is that having a democrat house, senate and white house is every bit as disastrous as having a republican controlled government.  We need opposing views to make good decisions.

Instead of republicans and democrats we need true conservatives and liberals although I personally question the value of a liberal.  As has been recommended in the past, maybe we need to vote them all out and start from scratch.  Could it be that much worse with all new bumbling idiots rather than the tenured group of self serving bumbling idiots we now have?  Hard to say but it might be worth a try.