Articles
October 2005 Newsletter
by Bill Jardine Oct 12, 2005
O ctober means the harvest season gets underway across the land and high streaky clouds signal the approach of winter here in the mid-Pacific. At our dry-land dwelling, Kilohana, we look forward to winter rains and maybe a chance to use our fireplace before the month is out.
This year we are so very glad to be living in Waimea, where terrorists acts and hurricanes are far from our green hills and lovely beaches. We can see the stress on the faces of the visitors who have struggled to get here. This is a confusing time for everyone.
House and land prices continue to dominate the cocktail talk these days with everyone wondering where it will all end up. I have always been a believer in the growing attractiveness of Waimea and have expected prices to run up for a long time. I still believe that those who buy here will do very well indeed. That is not to say we won’t see weak spots in the market here and there as time goes by, but so what? Let’s say that you bought a lot for $500,000 today and found that it dipped to $400,000 next year as the result of a terrorist attack. Where do you think it will be in five years? Probably way past $500,000. Why? Because, if even a tiny percentage of the wealthiest Baby Boomers decide to be here in Paradise, with a hospital, with the largest collection of world class resorts and golf in the State, with the safety and predictability of American law… well, we won’t be able to provide enough real estate to even begin to address the demand. It is just a plain fact.
Another interesting fact about the housing market is that prices are very often considered but cost rarely is. When you consider that the cost of owning real estate is much more important than the price it seems odd that no one is talking about cost, doesn’t it?
Think about this. A mortgage of $500,000 in the year 2000 would cost about the same as a mortgage of $650,000 with today’s low interest rates. Doesn’t it make sense that the price of a $500,000 property would rise to $650,000 on interest rate reductions alone? Of course it does!
Really, all the talk of costs and prices and supply and demand have been going on for centuries and will no doubt continue long after we have departed. The important thing is that we have a chance to live in this magical place, to lie on our backs and watch the clouds sail by, to snug up to a kiawe camp fire under a bright winter sky and to thank God that whatever it cost we paid it before it was too late.
A hui hou,
William N. Jardine®
William N. Jardine
