Following the national news it is easy to find articles documenting the slowdown in home purchases “nation-wide” while still touting hot markets and the craziness that the technology sector giants engender wherever they establish their headquarters.

What does that mean for you?

Here on the Big Island we experiencing very high demand as the Baby Boomers begin to retire, and that fuels demand that is extreme as far as Hawaii is concerned. Looking strictly at the numbers, if we get 1% of the Baby Boomers retiring to the State, we will have to build a minimum of 36,500 new homes to accommodate them. OK, I will say again …

1% of the Baby Boomers equals approximately 77,000 people. If they are all married to another Boomer they will need 35,000 houses, and that does not include all the people they will need to help them with their retirement years!

OK, so what? What about today’s market? What is going on?

As you would expect, those who own property and want to sell it are praying for extremely high prices and have memorized every extraordinary story they have heard, no matter the source. At the high end of the market there are high-roller speculators willing to take big risks in the hope that there is another more foolish speculator waiting in the wings, and often they are right … until the bottom falls out. We have all seen that plenty of times. Speculation is still driving prices for the pyramid builders in the gated resort enclaves.

In the middle section of market, where folks still need to get a mortgage to buy a house, interest rates and loan terms make a difference, but that market is thinning, since the Boomers in the mid-zone often have cash from a sale of property on the mainland and aren’t going to borrow this last time. Therefore, interest rates aren’t as big a factor in market demand and pricing as they were, say, 10 years ago.

The velocity of house sales has stalled a bit, since people still want to have their real estate be sensible, and they know that prices cannot rise forever unless the government decides to inflate the currency (inflation). At the moment, however the economy is growing fast, and debt is shrinking as a proportion of gross domestic product, so deliberate inflation remains a somewhat distant worry. If inflation were obvious and growing, people would risk more on real estate, but right now … not so much.

This is when property buyers really need an Exclusive Buyers Agent to take advantage of the current market, to find the soft spots, negotiate hard and not sell them on higher prices.

This is what we do, and I bet you didn’t even know it, right?