Pictured home: 16-4018 Ohiohi St. Keaau.
Almost one year and 20 “Zoom” pounds since Covid began, here we are ending 2020 in about the same situation as we began, except that prices gained about as much as I did! As we began the lockdown, most REALTORS® were wondering how we’d make a living. After all, in-person showings were not even allowed.
Within a month, we discovered the magic of video about the same time as off-island buyers figured out how to work from home. At that point, the market took an unexpected turn leaving us all scratching our heads…what just happened???
Local & Mainland Buyers
As you know, interest rates are historically great, buyers want out of crowded cities and Hawaii case counts remain low. So with the best weather on the planet, why not Hawaii? It was all the perfect storm of events that prompted buyer migration to Hawai`i. Truth is, we didn’t have enough inventory to begin with. Displaced owners from the 2018 lava event were still in the mix along with local buyers trying to take advantage of low interest rates.
A Closer Look…
The fourth column of my chart demonstrates projected buyer demand pre-Covid, followed by the number of sales that occurred this past year (not far off in most cases). Most telling is the last figure in each segment. Compare the current number listed with the projected demand listed under the number sold (projected demand) and it’s clear that supply and demand will continue to drive sales. Here’s the thing — price increases will stop once buyers can no longer afford to buy. At that point, prices should stabilize but demand will continue.
Unpredictable at Best
Potential buyers, at times, express an unfounded belief that prices will crash around summer. This is based on the idea that there will be a flood of foreclosures. It makes no sense that an owner who has been gaining about 3-5% per month, even during a deferment period, would allow a foreclosure to proceed. It would make much more sense to simply sell the home and pocket the equity.
21 and Over
Like everyone, I am hoping the stress of COVID passes soon. In the meantime, you can guess what my New Year’s resolution will be… while I can’t give up Zoom, I will be joining our resident Zumba instructor Ash Tsuji as he helps me get back into all the clothes I bought online during our work from home downtime. And…our Wine’d Down Real Estate Meetings continue. (Just email me for a Zoom invitation.) Happy 2021!