Chapter 15. THE HUT RUT
It's hard to say when the market first turned. Perhaps it was the high-profile demise of the Crater View Condominium Huts, which, despite their amenities, ample square footage, and unmatched ocean and lava views, somehow failed to attract buyers.
As Manny Fund was the principal underwriter of the project, the investment company took a big hit when the developer defaulted on the construction loan. When nervous real estate investors saw the losses at the Crater View Condos, many of them took a hard look at some of their other risky real estate holdings. A distinct apprehension began to spread.
Soon, buyers—both large and small—figured the market had peaked. Many decided that they should sell their current properties, take their frothy profits, and wait for a more favorable time to reinvest.
There was just one problem—everyone was thinking the same thing at the same time. Most of the owners in the market never intended to hold their properties very long to begin with. So when the market began to turn, everybody wanted out. In short order, the island was awash with sellers and devoid of buyers. When that happened, the unthinkable occurred—prices didn't just decline in a modest, orderly fashion...they started plummeting. The hut glut had quickly turned into a massive ...