Big Island Buyer's Brokers

Aloha from breezy Waimea, as the trade winds sift through the branches and sweep leaves across the yards. The whales are back from their long summer season in Alaska and can be seen spouting and rolling in the warm waters of Kawaihae Bay. The price of fresh mahimahi is falling, and striped marlin are in town to give the fishermen a thrill.

In spite of investor fears, the economy is still quite strong, and Asian demand for oil is keeping prices high. Of course the big question on Wall street is how much of an effect the credit crunch may have on stock prices. This is the hangover from the cheap lending party we had a couple of years ago, when you could buy houses with no money down. Banks are so severely regulated that it is hard for them to make any money anymore. They still have to pay for those big, expensive buildings while the on-line brokerages offer many of the same services at little cost. Selling mortgage loans was a good way for the banks to bring in some much needed revenue, and at the same time, there were a whole lot of institutions who wanted to balance their portfolios with real estate securities and were willing to buy weak mortgage loans to do so. Now we are wondering just how far the damage of foreclosures may spread, but no one seems to know how to estimate those things. One little snippet of information is that the estimated losses from this crisis are still running at a about a tenth of those generated by the Savings and Loan crisis years ago.

Those of us in the real estate brokerage business are used to prices rising and falling, and good brokers will always discourage purely speculative buying as a very risky business, but often buyers cannot be discouraged. I have had clients actually tell me that based on what they “know” prices are going to rise “from now on”. As a rule, we don’t work with these folks, because they know so much more than we do and are uncomfortable with our ignorance. A recent article by Victor Hanson illuminates the problems we have and where they are coming from.

Today there is an article on the Internet about a gal who has decided to sue the agent who assisted her in buying her house. The market value of the house has gone down instead of up, and I think her allegation is that her agent knew she could buy other similar houses cheaper, but he didn’t tell her. Maybe she is right, and maybe she is just manipulative and desperate not to take responsibility for something she insisted on doing. No one knows right now, and it should remind us all that when you buy real estate you should insist that you know as much as you can before making your decision.

Our agency represents only Buyers, so we are very careful about counseling our clients as thoroughly as possible. We show them properties based on their needs, of course, and they are presented with everything in their price range. That is easy to do here, since we never have that many properties to choose from in the first place.

Imua,

BIll Jardine

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