There are Changes in the Air . . .
August 1, 2006
For those folks who have been lamenting the escalating prices of homes here on the Big Island, and paritcularly on the Hilo Side, there's good news.
As I mentioned in my last Update, we are seeing more "price reductions" in the listings than ever before, and that means folks who felt that prices were still going up with no end in sight listed their properties at the up-end of the price range.
We're also starting to see the "distress sales" of some of the properties that people bought in the frenzy of the price escalation. The people who read those "get rich quick in real estate" books that advised leveraging as far as possible now get to see why that was not such a good idea.
These are the people who bought seriously overpriced properties for no money down. During that time we turned away a few potential amateur "investers" who showed us that they had loan approval for 110% of the purchase price and offered us thousands more than we were asking for the property if we would only sell to them.
So let's say we were asking $250K for a property and they bought it from us for $280K. They would get a loan for $275K. How smart they were, they thought, to now "own" this new property and have $25,000 in thier pocket for down-payments on two or three more highly-leveraged properties.
Guess what happened when the prices/values tapered back down to reality and they owed $50,000 (or more) more than they could ever sell the propety for?
There now more listings for homes under $200K and lots of choices for the range of $200-300K.
There are lots of homes on the market right now, so it's back to a buyer's market in most cases. we just saw a beautiful 1900 sq. ft. home in the hills of Hilo sell for $325,000. It was in excellent condition, an interesting design and even had a decent ocean view!
When there are more properties to choose from, buyers can be more selective, plus buyers are now actually able to come in with an offer of less-than-asking price. This has not been the case for a long time.
And now, we're back to the subject of LIVING ALOHA.
Things are changing fast here. Faster than we've ever seen before. So fast that even those of us who live right here in the middle of it can see it happen on a daily basis.
When a population expands rapidly for any reason, change is inevitable. In our Island culture, the change goes beyond just adding people. We're adding people from a different culture: Mainland Culture.
This is not in itself a bad thing, but what it is doing is diluting our Island Culture. Used to be, we'd see some of the new Mainland folks struggling with the way things are done here and trying in vain to make things happen mainland style.
With more and more Mainland people arriving every day, it's only a matter of time before we reach that critical mass -- when there will be enough pressure to move to mainland ways that it actually starts to happen.
Honolulu is a good example. Yes, it will be a long while before anywhere on the Big Island comes close to a Honolulu culture, but you can spend some time in Kailu-Kona and get the feeling of its progress.
Here's a heads-up: We have a Volvo dealer in Hilo now. Locals don't drive Volvos. Most Hilo people -- those who have lived here forever -- can't afford to drive Volvos. So who is buying enough Volvos to support a fancy new-car dealership here?
We're watching as the exponentially increasing traffic problems on both sides of the Island are populated with a majority of new SUVs, including Lincoln Navigators, Hummers, Cadillacs and even Porche, Mercedes and Lexus SUVs. These are clearly not the chosen vehicles of the folks who have lived here for years. Especially those sporting California plates.
For the first time ever, we're hearing car alarms on a regular basis. We're hearing horns honking in traffic. In the very near past, the ONLY time you would ever hear a horn honk was when somebody was saying, "Hey, Howzit!" to a friend.
The first time I can recall ever using the horn on one of our vehicles was just such a time, and since it may have been the first time the horn had ever been used, the button stuck in! How embarassing was that?!
And car alarms? We've always felt blessed to be living in an environment where we didn't even need to lock our cars.
So what, you ask, is my point? Just this: Please, please, please, do not bring those mainland ways to Hawaii! If you feel you must move to Hawaii but you need to live a mainland lifestye, Maui of Oahu might suit your needs.
The Big Island is a place of peaceful co-existence. It is a slow-moving place, where things happen at their own pace and any effort to ramp things up to mainland speed will in most cases bring only frustration and ill feelings from everyone involved.
Read the chapters in Affordable Paradise on all of the reasons you might not want to move to the Big Island. Put yourself there in your heart and mind and feel what it would feel like. If some of the things you read leave you feeling uneasy, please rethink any plans on living here.
Affordable Paradise was written not as a blanket invitation to everyone to move to Hawaii. Rather, it was designed to encourage introspection and to let the reader feel some of the reality of Island living.
Hawaii is very much not everyone's paradise, and if we can spare some folks the frustration, expense and drama of moving here only to find out soon that it was a bad idea, we have succeded.
Please know that we are coming from a place of love. Our own son was one of those who "knew" that he needed to live here. After high-school here in Hawaii, he couldn't wait to move to San Francisco, "where the money is." He spent eight years there, made lots of money (and spent even more), and more and more he spoke of his discomfort of living in a society where money was God, where the main topics of conversation were stock options, $50,000 cars and who had more of what. He wanted to come back to where family and friends were more important than upward mobility.
It lasted six months. He came to us one day and said he coulnd't do Hawaii any longer and he sold everything and left a few days later -- back to San Francisco. Back to the same frenzied lifestyle he sought to escape. It seems that the frenzied lifestyle was really his comfort zone, and so it goes.
On the other hand, if you are one of those who is already "living aloha" no matter where you live, and if you can come here and fully embrace the Hawaiian Culture and recognize that the local folks here are your hosts, this might just be your paradise.
It is certainly ours!
Live Aloha!
Mahalo for "listening."
Skip Thomsen & Ohana
Updated 1/20/2006