I think we get a bubble in another asset class before US real estate comes back, or even bottoms.
I haven't gotten the secret message as to which asset class is "it" yet - HK real estate, oil stocks, tech stocks (maybe?), diamonds, hardwood forests, wheat, high end watches, abstract art, stuffed animals or old postcards ?
Hawaiian real estate - Hawaii has 4 major factors:
1) the weather, scenic beauty, fun water sports, lots of golf courses, etc.
2) Access by air - it is one stop, not 2 or 3.
3) Decent infrastructure, regulations, etc. The electricity works all the time, the food is safe, there's advanced medical care, the pro shops have actual inventory
4) Being part of the USA, with a solid banking system, rule of law, property rights, etc.
Well, oops, number 4 is - let's just say unavailable at this time.
Number 3 can be developed over time - see Cancun, Phuket, etc.
Number 2 - well, Hawaii will get more competition from Cancun, Phuket, Phillipines, , Thailnand, Bali, and a dozen new Cancuns and Phukets. Throw in that air travel that will become more expensive as the price of oil goes up, and we have a formula that takes the air out of the rising prices.
Hawaii is to some degree a grasping welfare state stuck on a rock without major industry or finance, with a majority of the populace having intense feelings of entitilement and to some degree envy. They will keep raising taxes to keep paying for their welfare state, even if this damages the hotel and real estate industry - those industries are owned by outsiders, who are fair game.
However, with a falling US Dollar, relatively low oil prices, and low starting real estate prices, money can be made in Hawaiian real estate.
Argentina, select Eastern Europe cities, and your possible project in Thailand might be better bets. |
