Wednesday, March 01, 2006

Housing Bubble Bursting in Hawaii?

A recent article in the Honolulu Advertiser caught my attention. The main reason was because for the first time since March of 2002, the number of days houses sat on the market reached 40. But the second point of interest was that no matter what the market seems to indicate, optimism is prevalent. For example:
Despite the sales slowdown, local economists and real estate experts say sale prices should continue to rise this year but at a more moderate rate of 5 percent to 15 percent, compared with 30 percent last year.
Now if the housing market is slowing down, why would housing prices continue to go up? If the market slows, doesn't that mean a decline in prices come along with it? Just doesn't make sense to me.

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