I read through Terry Tolman’s market analysis report “Mixed Results for Real Estate Sales on Maui in the Maui News this morning. I often disagree with the “message” that his report sends but today I found it decently accurate. What I’m seeing is no clear sign of any rebound as we’re entering into our slowest period, compounded by the fiasco caused by the new foreclosure laws. When you look at the price of the pending (under contract) inventory, prices are going to drop in most areas of Maui with condos being hit much harder than residential properties. Overall, homes are pretty stable but I see that they will see more declines with our new laws.
So what is happening with the new foreclosure law? It’s like a game, take properties out of the “non-judicial” bucket where foreclosures typically took 6 months and put some in the “judicial” bucket where a foreclosure will take over a year or in the “new-non-judicial w/mediation” bucket. But that bucket is still being built so no one is going there. Freddie Mac has joined Fannie Mae in proclaiming that they will move to do judicial foreclosures on ALL properties in foreclosure, we’re going to see some slowing in bank-owned activity. Depending how much back activity, it could temporarily almost stop. As the state figures out all their new rules, banks are moving to the “more-certain closure” judicial foreclosure. Many think the banks just won’t use the new rules anyway. Write a law and banks avoid it; but that could have been projected. It costs the banks more, it costs our economy more and it stretches the pain out for homeowners in foreclosure. The only ones that win are the lawyers, maybe a few homeowners who can work something out and a few renters. What could have started recovering by early next year, will now be stretched out well into 2013 or longer. The painful short sale will become much more popular; banks may indeed be a little faster about processing them as they look at the year-long judicial foreclosure alternative. My guess is that this will cause a further decline in our market prices by 5-10%. NOT LIKE!
On the bright side, for some with steady employment, it might be good to sell (even at a loss) and upgrade. If that’s you or you know someone, call me and we can see what might work better for you! I can also help people who may want to consider a strategic short sale.
I’ve quit tracking the foreclosures in the paper so that information will start falling off my reports. It isn’t worth my time and effort. It’s a Maui Minute and I’ve got to let some things go.
Please share your thoughts and comments!