What are the positive influences affecting the 2010 market?
Prudential Locations – Bill Chee
One of the best reasons to own real estate in Hawaii is that there will always be a demand, due to the finite supply of land on Oahu. Sklarz says that the staircase-like pattern in sales prices here is very typical of supply-constrained coastal areas, such as Boston, Los Angeles, San Francisco and Seattle. In these areas, it is very difficult to build more, so demand increases and prices take off to offset demand.
In interior markets, such as Chicago, St. Louis or Kansas City, there is plenty of land to build on when demand increases, so these parts of the country trend very differently.
Additionally, the amount of housing authorized for construction shows that new construction is as low as it’s ever been since the 1940s. “We are not building homes in Hawaii at a pace adequate to endow the newborn with a house of their own,” said Brewbaker. I’m thinking we’re going to be supply short in a year or two.”
Other positive factors include the acceleration of growth in the country’s gross domestic product, one of the tests that will ultimately determine when the recession is over. Brewbaker is, therefore, not concerned about a double dip.
Mortgage delinquencies are also low, in spite of the news that Hawaii foreclosures are up.
“Things are way better here than they are on the mainland,” said Brewbaker. Where our toxicity exists is on the Neighbor Islands – particularly in the resort markets.”