It is going to be very difficult to predict the absolute bottom. Here are some of my observations after a recent visit to the Big Island to look for opportunities in North and South Kohala.

In North Kohala very few quality homes are available in the moderate price range ($300 – $500K) and many sellers are reluctant to reduce their asking price.

In South Kohala, Waikoloa especially, there is such a glut of houses on the market that moderately priced quality homes move at about 10% below already reduced asking prices. A lot of “junk” is sitting on the market.

It is my opinion that for investors that rely on an immediate positive cash flow will have to negotiate another 10% to 15% reduction since rents have collapsed and vacancies have skyrocketed.

Cash buyers that have the ability to carry a property for several years with a small negative cash flow will do OK with the eventually firming-up of rents and appreciation in the long run (5+ years).
There are deals that sell for around replacement value of the structure alone – meaning the land is free.