Editorials

[ OUR OPINION ]

Steady real estate market
bodes well for isles

THE ISSUE The state is seeing a boom with brisk sales, but without the heat and volatility of previous decades.

ALTHOUGH buying a home in Hawaii will likely never be an inexpensive undertaking, it appears that prices are stabilizing after wild fluctuations through the last two decades. This assures buyers and sellers of a market in which such a significant financial investment is more secure and where a greater number may be able to attain ownership.

As reported in a series of articles this week by the Star-Bulletin's Lyn Danninger, the ups and downs in Hawaii real estate were largely brought about by wealthy speculators, many of them from Japan. Investors with money to burn, such as billionaire businessman Gensiro Kawamoto, bought up houses as well as undeveloped properties, sending prices soaring in the 1980s.

Local residents who could afford the higher costs did so at great peril because in the ensuing decade, the Japanese economy began to tank, tipping Hawaii into a recession with it. Many homeowners who bought at the peak of the real estate boom watched helplessly as their property values shrank, sometimes by more than what they owed on their mortgages. People who sought to sell, such as retirees and parents who wanted smaller quarters after their children left the nest, were stuck with homes they couldn't get rid of without taking losses. Meanwhile, as the economy lagged, fewer people could qualify for loans and real estate wallowed in the doldrums.

The new decade has brought some recovery. Housing prices are rising, mortgage rates have dropped and real estate is once again on the move. With sales up, developers who had shied away from building new inventory, are now more willing to plunk down money and mortar.

Real estate experts say those buying for high investment returns should not expect a repeat of the dramatic increases in values of the late 1980s and '90s. Outside forces are no longer the main players, although the Big Island and other neighbor islands are seeing the entry of more mainland buyers in areas that have previously been less desirable.

A volatile market would be unwelcome for the large number of buyers interested more in home ownership than making a profit. Moreover, it could hurt people in lower-income brackets who already have few housing choices. Government offers some incentives for construction of cheaper homes, but further encouragement should be aimed at helping those who don't make a lot money.

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Published by Oahu Publications Inc., a subsidiary of Black Press.

Don Kendall, Publisher

Frank Bridgewater, Editor 529-4791; fbridgewater@starbulletin.com
Michael Rovner, Assistant Editor 529-4768; mrovner@starbulletin.com
Lucy Young-Oda, Assistant Editor 529-4762; lyoungoda@starbulletin.com

Mary Poole, Editorial Page Editor, 529-4790; mpoole@starbulletin.com
John Flanagan, Contributing Editor 294-3533; jflanagan@starbulletin.com

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