Articles
The Great Bottom Has Arrived
by Bill Jardine May 06, 2008
As a child I once knew a cook with a very large bottom, and of course I was not sympathetic at all. Quite the opposite, my friends and I made all kinds of fun of her bottom, although we were careful not to let her know. How times have changed now that I am worried about the size of my own bottom!
Lots of our friends and clients have been looking for the bottom of the real estate slide, and this article is to tell you that it is likely occurring as we speak. If you are anything like normal, you are expecting something significant to let you know that the Bottom is here, but nothing like that ever happens. Nope, the Bottom is always very quiet and unobtrusive. This Bottom is no different from Bottoms past.
The Bottom of the real estate cycle occurs when regular people can afford to buy houses once more, and it arrives at the time that reduced prices and the reduced cost of capital unite to make home buying reasonable once more. This cycle’s Bottom has arrived somewhat sooner than you’d expect, since national media attention has driven prices through the floor and our new Fed Chief, Ben Bernanke, has lowered interest rates very rapidly!The peak in house prices was somewhere in late 2005, nationally, and more toward mid-2006 here in Hawaii, so this leg of the cycle is about 3-years old all ready.
There are still millions of Sellers out there that have not repriced their properties to match today’s demand, and they will still have to make the painful adjustments, but the fact remains that in almost all normal markets the normal person can once more afford to buy a normal house. This means that demand will increase as the public catches on, and inventories will dry up as prices are adjusted.
Your greatest dream now should be to buy a nice piece of property as cheaply as you can while you are the only Buyer the Seller has to deal with. Before too long there will be several interested Buyers, and you will have lost your advantage! Yikes! Don’t wait for that to happen again.
The Baby Boomers will retire, and if we get just one percent moving to Hawaii we are going to have to increase our supply of retirement housing by as much as 70,000 units. If we get just a half a percent we need to build 35,000 new homes. Are you a cynic? If we get just one quarter of one percent (.0025), we still have to create over 12,000 new units. Think prices are going to spike? You should!
Please call me (808) 885-6061, or send me an email to bill@jardinerealty.com to figure out just when you can get going for this great wealth-building surge.
Imua!
Bill
