In the picture: Hilo Bay and ocean views from Bayshore Towers #1304.
The question of the century so far is how will we get back to normal? To put things into perspective, I looked back to the closest thing we have to a time when people stopped flying and, theoretically, buying. You may recall that following 9/11, people were paralyzed with the thought of getting on a plane. At that time, my daughter, Mililani Browning, was a Senior at Kamehameha School. When I had to travel to O`ahu just after, the plane was empty, and I got a room at my favorite hotel for next to nothing. Because I keep hearing predictions of prices tanking once we get back to work, I looked at local statistics following 9/11 as a predictor.
Just 2 months after 9/11, (December 2001), island-wide sales numbers increased 7.2%. Prices increased 8%. Of course, these properties may have been in escrow prior to 9/11. Most probably were not.
The number of sales deflated to around 2% in January for both sales numbers and pricing. Interestingly Puna numbers (residential) soared almost 44%. This is consistent with my thought that local buyers may have a unique opportunity to enter the market prior to the off-island buyers returning.
By March 2002, numbers seemed to be heading upward with the number of sales island-wide increasing 5%, Puna 25%, and Hilo 9%. Prices inched up 6.5% island-wide, while a strong Puna market showed an increase of about 27% with Hilo increasing almost 13%. These properties would have gone under contract likely in January.
Make what you will of the numbers, but because our sales are fueled by off-shore buyers, once our flights return, at least in a historical context, our market should mend quickly. March 2020 data showed that new listing inventory decreased 40%. Most sellers and their agents have made a conscious decision to hold new listings off the market until things improve. If pricing is affected, it likely will be already factored in and may never show up as eventual sales data. Of course, I’m not an economist but I do listen to all kinds of economic predictions. At this point, my observations are about as good as any.
Remember, Y2k? That event, as bizarre as it was, resulted in buyers relocating to Hawai`i simply because they felt safer here. There are those that feel our market may actually improve due to what I term the “Y2K” effect. In fact, I just fielded a call from a Washington State buyer with this exact sentiment.
Looking at recent sales, February showed 27 sales in Hilo and 16 in HPP; March showed 31 with 29 in HPP. There were 7 sales during the first half of April in Hilo and 10 in HPP. If this continues, we’ll end up with roughly a 2/3rd drop in sales numbers although, so far, prices have continued to increase.
Our REALTOR® organization conducts weekly online member meetings. This past week focused on tenants who were cautioned that forgoing a rent payment could not only affect your credit but will affect any future rental reference should one be required. Tenants, like owners, should be aware that payments currently due will continue to accumulate even during a time of no evictions and foreclosure freezes. Next week, I’ll attempt to make sense of how a lay-off is likely to affect the buyer pool….Be safe!