You may have noticed that home prices are increasingly rising in Hawaii. Sellers are receiving multiple offers and backup offers due to low inventory. This has resulted in above asking price offers. Lets talk about how real estate is expected to be affected in 2015. Or rather, how it will affect you as a homeowner and/or a buyer.
Photo: Hoakalei master planned community
The median home price (on this rock, Oahu) has steadily risen in the last 5 years, since the bubble burst. (which I might add, only affected home prices minimally in comparison to our mainland comrades) It is currently at $690K and economists believe that by 2020, the median home price on Oahu will be $1M. Some even believe that it could double by then.
Photo: Sunrise in Kailua/Lanikai
During the last surge in home values back in 2005-2006, local lenders stayed conservative, that helped Hawaii homeowners hold onto their homes, and protected our home values as well. We only saw a 3% drop in 2008, 7.9% drop in 2009 and then in 2010, prices started to slowly rise again. This shows the true strength of the Hawaii housing market.
The housing market went up 3.8% for single family homes, and 5.4% for condominiums this last year alone. Supply and demand play a big part in our market, that along side with living in a beautiful place with a perfect climate. This makes it increasingly more difficult for non-homeowners, but specifically younger people, to become homeowners, which then drives up rental rates as well. But despite new home development on the Ewa plain and in Kakaako, the inventory is still low. Average time on the market has also gone down each year.
Photo: Hawaii Kai to Diamond Head from the summit of Koko Head Crater
You may think that as a buyer, your going to experience the downside of the Hawaii market, well not so much. Experts at the Honolulu Board of Realtors say that if you jump in, and take advantage of low interest rates now, you will profit in the end. Interest rates still remain low, which helps buyers attain higher loan amounts. There are also many options for buyers here, like USDA 100% loans, VA loans and even seller financing.
But many Realtor's agree: Buyers, be prepared to meet or exceed asking prices. Be completely pre-approved with a lender before making any offers. Your agent may want you to send a letter about yourself/your family to get the sellers attention on your offer. And most importantly, be prepared to move fast!
If you're starting to build your real estate portfolio or expanding it, purchasing in Hawaii can be a safe move for you....
Where do you want to be in the year 2020?
By: Chelsea Pferschy RS# 76072