Lauren: Hi everybody, we are the Ambrocio Team and this is Ellie Ambrocio and I am Lauren Folsland. Today I will be interviewing my business partner and lovely mama. She’s been through a lot of seasons of Real Estate so I thought I’d pick her brain today about current Hawaii market conditions and predictions she has about how the market will change dealing with this pandemic.
The first question I have for you is, how long have you been a Real Estate agent?
Ellie: I’ve been in Real Estate for about 25 years, Lauren was about 2 years old when I started. I’ve been through a lot of ups and downs in my career and today we are seeing another one so we just want to give you some help and information so you can make the right decision about buying or selling your home.
Lauren: So when you talk about downs, can you talk a little more about that so we have a little background about your experience?
Ellie: The one that comes to mind is the 2008 financial crisis. At that time people were borrowing money to buy houses they could not afford because they had stated income which is income they said they had but they couldn’t actually qualify for the loan. (The banks) did the loans anyway and when the bubble burst which is when the people couldn’t pay or refinance their loans, when the balloon payment came or the loan came due they had to foreclose. That’s when the bubble burst, for the housing market and the stock market.
Lauren: Yeah so I personally don’t remember you being worried or stressed at that time, so what was your game plan or what were you doing during that time?
Ellie: Well basically, when we saw the market crash we found a lot of good deals and it just so happened that we had some cash on the side and we were able to go in and buy properties on fire sale to put it bluntly. We were buying at the bottom of the market and people did not want to touch these properties. Today we made at least 200 to 250% in return on our investments in just 9 years. So you buy when people are afraid and you sell when people are buying. That’s when you make the most profit on your investments.
Lauren: Okay so let’s bring us back to present day. What is the Hawaii market’s current situation as we are in the midst of the pandemic? What are you seeing?
Ellie: Well the last 7 years we were coming off of the financial crisis so we’ve had an average return of 5% a year from 2011 to the present. Now I’m seeing a slow down in the market, there’s more properties for sale and people right now are not really in a hurry to buy. But there are some people who are buying because of the interest rate being low. So if you are able to buy, you still have your job, and if you do have money put aside to use as a down payment start looking for properties you’d like to buy and test out the market and see because you can negotiate prices.
Lauren: Okay so I know a lot of people right now are concerned about maybe foreclosing. Maybe right now they’re not in the position to buy but they’re scared right now that they might be having their houses foreclosed on. Do you see that as a potential threat or possibility?
Ellie: It’s always a possibility but at this point, I think the pandemic is not caused by an economic downturn but it’s caused by a virus and so I believe this is temporary and it’s not going to take as long to recover from it. Like maybe if we find a solution like having a vaccine or some kind of medicine to treat the problem, then we will be able to go back to work and start buying things again. I think right now, the short term interest rate is very close to zero and so the mortgage rates are below 3% for small loans so I think right now is a good time to start looking.
Lauren: So do you think that the interest rates will go even lower? What’s the current interest rate and do you think there’s a possibility that it’ll go lower, or is this the bottom?
Ellie: It’s hard to say but I know the short term rates are close to negative, close to zero. So I don’t think they’ll go negative because who’s going to loan you money at negative interest. You don’t want people paying you to borrow, so I don’t think it’s going to go below zero. But I think mortgage rates are probably going to stay below 3 for a while so take advantage of that because it doesn’t come too often. If you look at the downturns during the depression in the 1930’s it tracks the financial market which is the DOW industrial average, and when it goes down that’s when the Real Estate market comes down too because there’s less people to have money to buy properties or that’s when they don’t have jobs.
Lauren: Let’s talk about then who would be a good candidate to be a buyer right now?
Ellie: People that still have jobs and people who have money on the side to put down as a down payment or if you serve in the military you can use your GI bill and you can have 100% financing and so you don’t have to worry about having a down payment, just money for closing costs. Start looking because I think in the next few months we will be seeing a drop in the market and then that’s a good time to be buying so you have to start looking now because when that time comes you’re there you’re ready to go. Get your pre-approval letter for the mortgage and you’re set to go.
Lauren: How about on the seller’s side, who is a good candidate to sell or do you even recommend that?
Ellie: I would think people that already have properties that they think they want to sell and upgrade to a better property, a better location perhaps, a better house in a better neighborhood. Also people who have rental properties that want to buy multi dwellings so that way they can increase your cash flow because they have more tenants and then you can also afford more property because of the lower interest rate. Eventually you can have enough tenants to give you positive cash flow and that’s the situation you want to be in so when the market turns around you will have equity in there, and you have people paying your mortgage. It’ll give you the road to financial freedom.
Lauren: So a lot of good information to take forward and to see which boat you’re in. So we are going to have to work towards wrapping up, so do you have any final advice, tips, or things to look out for everyone during this time in regards to Real Estate?
Ellie: Don’t be afraid, if you can do it, you have the means to do it, you have a job for example, you have money sitting aside, put it work. Don’t be afraid; go in when people are afraid actually so you can get the good deals. Then hang on to them so when the market recovers you will be very happy and you won’t have any regret for doing it, because I’ve never had any regret. That’s what my advice is.
Lauren: Well thank you for sharing today and again we are the Ambrocio Team, Ellie and Lauren. You can find us online www.ambrocioteam.com on Facebook, or email us at firstname.lastname@example.org You can also contact us at cell phone number (808) 681-5021. Thank you for joining us today we will be sharing more and let us know if there are any other topics you’d like us to discuss or questions. We are open books and we look forward to helping you or working with you. Thanks guys, bye!