Opportunities in Every Market

Is the real estate market shifting? That is the question on everyone’s mind. As more inventory becomes available, we are seeing longer days on market. There are price adjustments in some neighborhoods. Of course, all real estate is local. Depending on price point, your neighborhood may still be experiencing price appreciation. Overall, we are still facing a housing shortage. There is still pent up demand. So what does it all mean? What can you expect?

Consider that real estate is cyclical and shifts are inevitable. Shifts occur when supply and demand move out of balance. When housing exceeds buyer demand, it is a buyer’s market. When buyer demand exceeds supply, it’s a seller’s market. A shift occurs when the market transitions from one to another. Several factors can create a shift: Global factors such as currency exchange rates. The overall political climate. National factors such as interest rates and inflation. Local factors such as neighborhood dynamics and housing prices. Ultimately, it all comes down to buyer demand, which in large part is fueled by affordability and perception.

Market Shifts Aren’t Necessarily Bad

For those wishing to trade up, there may be more opportunity to sell an existing property and buy a replacement property. And for buyers just entering the market, there will be time to take a breath and a second look before submitting a purchase contract. For sellers, it might mean strategizing to maximize profit via a good marketing plan, proper preparation, and promotion. The good news is that there is an opportunity in every market.

I’ll give you an example. Recently, I listed a townhome for a young couple who wanted to trade up to a single-family home. In a highly competitive market, buying a home contingent upon the sale of another is hard. Challenging. Pretty much impossible. But, not so in today’s market. We made an offer on a single-family home and the Seller was willing to wait for the Buyers to sell their home. Granted, it wasn’t easy. It took skill and strategy and smart negotiating and marketing, but the Buyers are now thrilled with their new home and the Sellers are happy to move forward with their lives.

Opportunities in Today’s Market

There are lots of opportunities in today’s market. You may have to shift some of your thinking and you may need to adjust some of your priorities, but you can still buy. Let me share one more example with you. I’ve been working with a young professional couple. Today’s higher interest rates caused them to step back for a while. They wanted to wait to buy thinking that things will improve down the road. After we discussed the pros and cons in detail, they jumped back in and are now solidly in escrow. They did have to scale back their wish list a bit due to a higher interest rate, but they are happy with their purchase. They’re smart and they understand that buying now makes sense for them. Not only will they have a nice place to live and a tax deduction, they can begin to build equity in their new home. If you think waiting is wise, consider that we have a very short supply of inventory, huge pent-up demand, and a market that will likely soar again once interest rates go down. No one can predict for sure what will happen in the market, but in the case of my clients, they plan on living in their new home for at least five years, which historically speaking, is more than enough time to offset any potential downturn in the real estate market.

Over the years, I’ve been through many changes in the real estate market. I’ve seen interest rates as high as 18% and I’ve seen the impact on the market due to wars, recessions, inflation, crises, politics, and the like. Do you know what else I’ve seen? I’ve seen Hawaii prices go up and up and up! I’ve seen the market rebound time and time again.

So, what are you waiting for? Hawaii real estate is resilient and will continue to be a sound investment. You can bet on it.