Call Laurie Lowson for information on Kapalua Golf Villa 12V1.

Last week, I was privileged to attend the Hawaii Association of Realtors’ convention in Waikiki. An incredible location such as Waikiki draws top names from the National Association of Realtors, including the president and Chief Economist Lawrence Yun, Ph.D..

The following are comments from the speech given by Yun. His first observation was that the housing market could go either way: slowly decline or slowly inch upward.

The main problem is consumer confidence is in the “tank.” U.S. housing starts remain low and are below the long-term average.

NAR President Ron Phipps said, “Every recovery has been tied to the growth in the housing market. This downturn needs the housing market to rebound and pull the entire economy up.” Nationally, new home inventory is at a 40-year low. Hawaii housing permits were up slightly in 2010; however, still almost 60 percent below the modern record number of Hawaii housing permits issued in 2005.

What factors will lead to higher home sales? 1) Job creation; 2) Stock market recovery to 2008 levels; 3) Higher rents creating a larger pool of more qualified renters who can convert to buying; 4) Today’s buyers want deep discounts, and they are finding that in distressed properties; 5) International buyers taking advantage of the weak dollar.

A future huge positive would be if lending opens up. Tightening of lending policy by Washington will lead to further slowing of the housing market.

The good news is that recent borrowers, since 2009, have a very low rate of default on their mortgages. However, the rate of seriously delinquent mortgages remains very high. Distress sales still account for 30-40 percent of all sales, and that number will remain high for a couple more years, according to Dr. Yun.

All cash purchases are at an all-time high of 35 percent. Investors want quick deals and do not want to deal with all the paperwork involved in getting a mortgage, or they may not qualify. Some people do not want to bother with appraisal. Others realize real estate is a good hedge against inflation. As we are seeing on Maui, the high-end market is moving.

NAR has shown through national statistics that the down payment amount is not as important as the buyers’ ability to make the payments. For that reason, NAR is against the possible change in policy to require all mortgages to have a minimum 20 percent cash down payment. While the forecast is for interest rates to rise slightly in 2012, the more important factor is what the underwriting standards will be at that time.

Thanks again to the Hawaii Association of Realtors for putting on a top-level program to benefit Realtors and, subsequently, you the consumers.

Kapalua Golf Villas has several well-priced condominiums available for sale. My listings include 12V1, one-bedroom/one-and-a-half baths, listed at $510,000; 24T2, one-bedroom/two-bath listed at $551,000; and 20V2, three-bedroom/two-bath, listed at $1,195,000. Visit www.Lowson.com or e-mail me at Laurie@Lowson.com.