What’s Happening in the Honolulu Housing Market?Condo and single-family home prices have increased significantly on every major island since July 2020. The median sales price exceeded $1 million on Kauai, and at least one economist expects Maui and Oahu to follow suit. With home offers turning into bidding wars, those who can make cash offers beat other buyers. For those who have access to cash, Oahu appeals for many reasons. Before we address that, let’s look more closely at other contributing factors.
Mortgage Rates Low But RisingThe housing market is no stranger to low interest rates. For years now, buyers have taken advantage of low rates to buy or refinance homes. While current interest rates remain low, they are expected to rise. As a result, many people want to take advantage of current rates and get locked in before rates start climbing.
Basic Economics: The Law of Supply and DemandLess inventory (low supply) and lots of buyers (high demand) equate to higher prices. This is Economics 101. While one option includes waiting for the frenzy to die down, that decision comes with a risk. That is, prices may not drop quickly. If that happens, some people may not be able to afford to move at all. Or, they may have to settle.
Remote Work Contributes To DemandThe pandemic changed the way we work forever. Many companies changed their business model to allow remote work. As a result, people are moving all across the country. When they do, some intentionally choose beautiful locations and homes that provide them refuge and comfort to work and play. What better place to do that than Hawaii?
Cash Always WinsMany people get outbid on their house offers. Those with access to cash can offer more and negotiate to avoid appraisals that may inhibit those who must seek financing. They can also waive inspections and, ultimately, provide more desirable offers to current owners. While this may not appeal to the first-time homebuyer, it is very appealing to retirees and those with access to cash.
Who’s Moving To Honolulu?
Traditionally, locals and outside investors comprised much of the Honolulu real estate buyer’s market. Today, military personnel and people from the U.S. Mainland show interest. Why? For all the reasons we’ve identified. Who wouldn’t choose to live in one of the most beautiful places in the world if you could? Remote work, retirement, and the military allow for that opportunity.
Rent a Car, Find a Home
If you are looking to buy a home, especially if you have access to cash, now is a great time to consider moving to Honolulu. Many people rent a car, but you can also bring your larger family and explore in a passenger van or SUV. Call Lucky Owl at (808) 352-4890 to reserve your rental. Happy house hunting!