Market FAQs During Covid-19
- Market FAQs
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Q: How has the pandemic impacted home listings and sales in Hawaii?
In general, there is definitely a slowdown, but the market isn’t completely dead. Due to travel restrictions, there are naturally fewer buyers in the market at the moment, except for a small number of visitors. Foreign travelers are not permitted yet. Obviously, fewer travelers = fewer homebuyers.
For safety reasons, our agents are not conducting open houses, though we have been able to resume socially distanced home showings with locally resident buyers, using all necessary precautions. Masks are mandated.
There is continued economic uncertainty, and some buyers and sellers seem to want to hold off on listing their properties. We expect that to shift.
Q: What is the Hawaii real estate market like since travel restrictions and social distancing were put in place?
We have seen activity with local buyers who were actively looking before the pandemic hit. Some prices are dropping, and some sellers are willing to negotiate on price. These trends started to appear in April.
We have seen homes taken temporarily off the market—these are mainly owner-occupied homes. There is still a market for lower-priced properties. Vacant land is selling, especially on the Big Island, where more is available.
Buyers have more time to search online and request virtual tours of properties in anticipation of getting to the island. Many travelers had their trips canceled unexpectedly in March and April. We are now seeing slight increases in travel and mobility as states begin to reopen.
Q: Are there investment opportunities for cash buyers in locations where Hawaii’s real estate inventory is typically quite low?
Yes, especially since listing volume and transaction volume is at an all-time low. It’s an immediate buyers’ market. Resort areas present the most significant opportunities, as well as the traditionally higher tiers of the market.
Q: Can foreign buyers purchase property in Hawaii right now?
Yes, although Hawaii’s State Senate has put forth a bill that could radically restrict foreign purchases. The legislature is not in session, so that bill has not yet been voted on by the full house or ratified into law. If a foreign buyer is intent on purchasing in Hawaii, there really couldn’t be a more critical and urgent time than now.
Q: What are some Hawaii real estate investment strategies right now?
While this is a broad question, our view is that you have to want the real estate more than the money. Real estate may seem to some to be inherently more valuable, especially after the considerations surrounding the recent Shelter-in-Place orders and very real considerations of “value.” All assets run the risk of rapidly being devalued, but real estate carries with it very internal and tangible values that cash, stocks and equities simply can’t provide.
Investment strategies depend on your current goals, portfolio and situation. Of course, we recommend consulting your CPA and/or financial advisors when considering anything as a true “investment.” But let’s face it – there are almost always personal reasons involved in the purchase of real estate in Hawaii. What’s it worth to you?
Q: Is this a good time to buy a (second or vacation) home in Hawaii? If so, why? If not, why not?
The next several months could present extraordinary opportunities as prices go down and high-quality inventory trades for less than it has historically. That said, the best inventory will likely get picked up quickly since there will be a ‘dry powder’ element to the market that can move quickly when the right opportunities present themselves.
There will be continued pressure on vacation rentals in the next 12-18 months, both related to Covid-19 and the ongoing housing shortages in Hawaii, so it’s unwise to plan on vacation rental income as a means of affording a second home. For true second home end users, however, there will be strong buying opportunities.
Q: How does Hawaii Life expect the real estate market to change and evolve for the balance of 2020?
The remainder of 2020 will be considerably slower than the first quarter. Listings will eventually return to the market, but trading volume will be radically slow. Only the best-priced and high-quality listings will trade.
Q: Where can I find market updates and market information?
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