Remember Y2K??? It certainly doesn’t seem long ago that we were facing the notion that a computer programming error would leave us cut off from the rest of the world. In hindsight, it all seems wacky. Strange as it may seem now, I recall a handful of folks who actually migrated to Hawaii ahead of time…just in case. In fact, at least one couple was so convinced that Y2K would become a reality that they purchased property with the idea that they’d never have to pay! After all, we’d be cut-off from the rest of the world so who would come to collect. Shame on them but here’s the thing; the last laugh was really on them. Even considering recent price regressions, a legitimate purchase would have served them well. On the eve of Y2K, (1999), the median Big Island home sold for $160,000. Puna homes were selling for $83,000 and Hilo homes were going for $130,000. Just six years later, the same Big Island home sold for $385,000, Puna homes were selling for $245,000 and Hilo homes were fetching $325,000. Fast forward again to the eve of 2009. Median prices may actually surprise you. We ended 2008 with a median Big Island home selling for $345,000, about 10% under where we were at the height of the market and yet more than double Y2K levels! Hilo homes are still selling for $325,000 with Puna homes declining to $215,000, only 13% from the height of the market. Activity levels are a different story. Or are they? In the year prior to Y2K, 1445 homes sold island-wide. In 2005, the number ballooned to 2757. I n 2008, there were 1146 sales. The number of sales may be 59% less than those at the height of the market but it’s only 21% less than 1999 which was considered a much more normal market and certainly not one suffering from a severe migraine! Watch this. Puna sales numbers grew from 358 in 1999 to 931 in 2005. They are now back down to 412 which means sales are actually ahead of where they were at the start of this millennium. Hilo sales went from 246 in 1999 to 423 in 2005. We ended 2008 with 178 sales. I’m not suggesting, of course, that the start of the millennium is a significant benchmark but I am suggesting that perhaps comparing one year to the next, one month to another or even 2008 with any other year may present a misleading picture when it come to determining what “normal” looks like. It’s really best to look for value and consider opportunity. Look for 2009 to bring improvement. The housing stimulus package has pushed interest rates lower and the National Association of REALTORS® is working hard to make tax credits available to all buyers. Market change is inevitable. Real estate is real. It doesn’t go to “zero”. Values may drop but the asset remains. Sometimes it’s just best to say calm, remain objective, keep the faith and remember that the big picture is often painted with a very big brushJ