The latest data on home sales in the US from Realtor.org show that the Stimulus money aimed at getting Americans to start buying houses again is working. Sales of existing homes nationwide rose 7.2% in July 2009, compared to July 2008. Condo sales have also increased. In the West sales rose 16.3% over last July.
The picture is Hawaii is not as rosy. The market continues to decline, despite an increase in sales pace reported by Prudential. Let’s consider Maui as an example. At the peak of the housing bubble in 2006, single family homes on Maui were some of the most expensive in the state, with a median value of $625,000. In Prudiential’s mid-2009 report, the median price is $499,053, down 14.7% and sales volume dropped 32.5% from the same period in 2008.
However, there is a 3-month lag in reporting so any new trends in Hawaii’s housing market won’t appear until the next report due out in December 2009.
Experts credit the slight pulse in the housing market to a Stimulus package program, which gives buyers $8,000 cash back for a purchase in 2009. This program seems to be working, at least in the short term, and Congress should renew or extend it when they resume session in September. Another popular Stimulus program was Cash for Clunkers, which was extended once doubling the federal money allocated to it from $1 billion to $2 billion dollars. If a carrot works, use it.
But prices of homes are still down, a trend that likely won’t reverse until excess inventory sells. In most markets, including Hawaii, the prices appear to be either flat or inching up. James J. Cramer penned an article in September 2008 for the New York magazine predicting the bottom of the housing market as June 30, 2009. It appears that he was correct.