Blog Detail
The Gospel According to Paul
Recently, noted economist Paul Brewbaker was on Maui discussing the real estate market. Below is a summary of some of his conclusions. Please email us if you’d like us to send you a link to the data supporting these claims.
• Maui’s housing market has turned the corner.
• Low production, low inventories suggest change in housing stock demand will overwhelm new flow supply.
• Historical relationship between underlying trends in Maui house price appreciation and (lagged) Maui days on market suggests that housing cycle is solidly in appreciation phase.
• Mainland markets with more severe housing downturns rebounding more sharply; ditto for Maui and Neighbor Islands with more severe housing downturns than on Oahu.
• Longer-term appreciation trends suggest that neither the so-called “Sub-Prime Bubble†nor the prior “Japan Bubble†are anomalies: valuation cycles are normal for markets with geographic and regulatory restrictions on supply side of market (ask the Sierra Club).
• Role for demand-side bubbliciousness is not ruled out (viz. Phoenix and Las Vegas with subprime lending) but supply-side constraints assure Maui of another period of rapid house price appreciation.
Aloha,
Ken