It's all in your perspective. If you are the seller and you are selling at or below the price you bought it for, it's most certainly a fire sale! However, I'm inundated with buyers that think they can get a property that was assessed at over a million dollars last year for a couple of hundred thousand! Not happening here, not yet.
Don't get me wrong. I am fully aware that housing prices are plummeting on the mainland. But let me tell you that I live on an island - the Garden Island, to be exact - in Hawaii. Most of these islands are 5-star vacation destinations. So, when I get an inquiry from someone looking for a 2 bedroom/2 bath condo on the beach in Poipu for $60K (yes, sixty), I have to shake my head.
And then it happened - well, almost. Two condos (neither 2b/2b OR on the beach in Poipu, mind you) came on the market for $59,000 (yes, fifty-nine) a few days ago. Now, these condos are assessed at over $200K and they are not distressed properties, so one has to wonder what these sellers are thinking? The easy answer - since these are not my listings - is the sellers are very motivated and just want to dump the properties. Someone savvy buyer will make a killing, I'm sure.
The other aspect though, is these prices will undoubtedly cause all the others (right now there are about 31 listings in this complex alone) to start falling. In addition, those who cannot afford to cover the reminder of their loans will be hard-pressed to convince a buyer why they should pay $200K more than the ones that are listed at 59K. Even after they are sold, they will skew the numbers for a long time to come. This could also prompt other sellers around the island to start selling for as low as they can go...whatever that might be. Now, this is not necessarily a bad thing. It may actually get the ball rolling again - which would be a good thing. We all know that a stagnant housing market is no good for anyone. And investing is a tricky business at best. But, with prices starting to fall (if that's what happens) investors and homeowners alike will come back and start buying again.
So, I guess I must ask the question: is the fire sale starting??
(Since I wrote this -- one of the two listings has gone under contract. Cash deal, no doubt! Kudos to the agents involved!!)
