ONLY HALFWAY THROUGH?
May 9th, 2008In the Economist magazine, a short article argues that the housing issues on the mainland are only half over:
The pain of America's housing bust varies enormously by region. Hardest hit have been the “bubble states”?California, Nevada and Florida, as well as parts of the industrial Midwest. The biggest uncertainty hanging over the economy is how red will things get…Another set of indices, developed by Robert Shiller and Karl Case and produced by Standard & Poor's (S&P), a rating agency, includes all types of houses and, not surprisingly, show house prices rising faster during the boom and falling faster now…Assessing how much further house prices are likely to fall gets even trickier. One route is to look at market expectations: investors expect a further 20% drop.
The big question is, of course, what does this type of broad national analysis tell us about Maui real estate and Wailea real estate in particular? As always, the answer is not much. But if this article is correct and nationally prices will still see extended negative price moves, it will likely impact the psychology of buyers of resort properties. But Maui has a very specific characteristic counteracting these issues. We have never overbuilt the island and so constrained supply probably outweighs the impacts noted in the article.
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