Princeville, Kauai Home Sales » Princeville Statistics

The Psychological Nature of Real Estate Cycles

James Pycha — Sun, 10 Aug 2008 19:09:59 +0000

I have been through two previous Real estate cycles here on Kauai. Like this one, they are volatile, complex and persistent. They have pervasive effects on people’s livelihoods, wealth and health. I’ve always been fascinated with the question “What causes real estate cycles?” I read an article by a behavioral economist (Dick Stoken, 1993) that advanced the theory that crowd behavior and mass psychology was the culprit. Mr. Stoken argues that we are not economic individuals who act in our own rational self-interest. Rather, we are psychological beings, conditioned by our experiences, especially those experiences that serve as important lessons of pain and/or pleasure. Because of this, cycles are created: ‘‘Following an extended period of prosperity, men and women adopt the psychology of affluence and its byproduct, economic optimism, wherein they enjoy life, have fun, and become economic risk takers. This mass psychology of optimism, once set off, takes on a life of its own and continues until people become excessively optimistic. They rationalize that what has happened will continue to happen, and thus come to see less risk than actually exists. Consequently, too many people become risk takers, which in turn creates the conditions for a big bust. This bust, or depression, then sets off a psychology of pessimism which continues until people see more risk than really exists. At that point too many people become risk averters, and this lays the foundation for a long period of economic expansion.’ This seems to ring true to me. I’ve noticed that the abstract term “MARKET” actually refers to a general behaviour trend of consumers. As if an orchestra leader is conducting a symphony wherein everyone begins and ends each piece at the same time following ques and signals which the group collectively obeys.

Princeville Homes Sales Year to Date (7-12-2008)

James Pycha — Sun, 13 Jul 2008 06:51:45 +0000

Princeville Homes Sales Year to Date (7-12-2008)

Princeville Homes:Listings, Sales & New Escrows

James Pycha — Wed, 11 Jun 2008 17:11:36 +0000

Princeville Homes:Listings, Sales & New Escrows

Princeville Home Sales Status Report

James Pycha — Tue, 11 Mar 2008 22:31:03 +0000

Market Status:Princeville Home Sales

Princeville Homes Listings and Sales 5/17/2007

James Pycha — Sun, 20 May 2007 01:17:07 +0000

Princeville Home Sales by Number-per-Year

James Pycha — Tue, 24 Apr 2007 07:37:50 +0000

2007 Year to Date Home Sales Statistics

James Pycha — Sat, 21 Apr 2007 16:34:56 +0000

Number of Closed Sales: 13

Average List Price: $1,229,615 (Lowest – $665,000, Highest – $2,190,000)

Average Sale Price: $1,150,385 (Lowest – $645,000, Highest – $1,950,000)

Average Days on Market: 204 (Lowest – 21, Highest – 511)

Average Price per Square Foot: $501 (Lowest – $334, Highest – $685)

Average List Price / Sale Price Differential: 94.09% (Highest – 100.12%, Lowest – 88.79%)

Average Number of Days in Escrow: 41 (Highest – 80, Lowest – 22)

Current Princeville Homes Market Activity

James Pycha — Wed, 11 Apr 2007 20:08:02 +0000