As the New Year approaches, we often find ourselves wondering how changes in the market are going to influence our futures, especially when it comes to making large investment decisions like buying a home.
2015 is the Year Millennials Start Buying Homes
Because homeownership is still desired by most Americans, zillow.com predicts that 2015 will be the year of the millennial generation to start buying homes. As many people chose to rent longer, demands for rental properties continue to increase driving prices of rent to soar higher and higher.
Those in the 23-34 year old range are becoming more and more optimistic about their abilities to be able to afford mortgage payments and place down payments on a home of their own because of this increasing demand for rental properties.
Builders are also beginning to better cater to the millennial age buyer (a significant advantage for the buyer) by building more homes suitable to their lifestyles, such as condos and townhouses, which are more affordable. These more affordable properties are making it easier for the buyer to negotiate price, making homeownership more attractive.
Construction Projects Will Increase in 2015
Speaking of construction, it is predicted by Kokua Roofing that construction is going to continue to increase on the island with a number of new projects, including that of Kohanaiki Resort, already projected to begin here shortly. This increase of construction will constitute heavily as an economic driver as visitor arrivals are slightly muted at the moment.
However, construction takes time and as the availability of lower priced inventory continues to shrink, and demand remains steady and even increases, prices will continue to rise. Until more home inventory is brought onto the market, the demand side will outweigh the supply side, and prices will continue to increase.
Real Estate Prices Expected to Rise
In other words, homes are not going to be this “cheap” for long. Low interest rates, such as those hovering around 4%, are beginning to disappear and the median prices of homes continue a gradual rebound since their 2011 lows, although it is not predicted that home prices will be as high as they have reached in the past.
University of Hawaii Economic Research Organization (UHERO) predicts that the median price of a single-family home could reach $773,800, an 8.9% increase in 2015. Condo prices are also predicted to increase 6.2% to $376,300 even though they reached record highs last year.
What Does This Mean For Buyers?
So what does this mean from a buyer’s standpoint? It means that 2015 could be the year to finally purchase that home in paradise and begin your Hawaii Life!