Hearing that the Hawaii real estate market is “strong” seems like such a generic term that might not translate into usable data for you. Here are two data points of the Hawaii Kai market from the Honolulu Board of Realtors (Market data):
- The median price of condos year-to-date compared with 2013 is up 6% to $600,000. Interestingly, the final sales price was 96.8% of the list price compared to last year’s 102.8%.
- The median price of single family homes year-to-date compared with 2013 is slightly down 2% to $962,000. Also, the final sales price was 97.7% of the list price compared to last year’s 99%.
But What Does This Mean?
Prices are stable, and anecdotally we still hear about many multiple over-asking cash offer situations, but at the end of the day buyers are negotiating more heavily on purchase price. Buyers are seeking value, as always. Moreover, if you’re preparing to sell your property you must differentiate your home with proper presentation and correct pricing in order to capture maximum value.
What’s Happening with Interest Rates?
Real estate will always be strongly tied to supply and purchasing power (i.e. interest rates). So what’s happening on that front?
According to Dina ElBoghdady of the Washington Post, “The Mortgage Bankers Association expects the average rate on a 30-year, fixed rate to rise slowly to 5.1 percent by the end of 2015 – a full percentage point higher than where it was last week – as the U.S. economy grows and the job market improves. (Generally, strong economic performance pushes mortgage rates up.) If not for the economic and political turmoil that’s erupted in other parts of the world, the forecasts for mortgage rates would probably be even higher.”
In the next year, I suspect we will see the return of seller credits for interest rate buy-downs and other incentives to keep the right buyer in escrow. We currently have stability in our marketplace and sellers should capitalize on that in preparation for the Spring market. Please contact me if you would like to be in position.