Hawaii real estate market at record high with low inventory

Hawaii real estate market at record high with low inventory

HONOLULU (KHON2) – Hawaii real estate is at an all time high and the current trend has surprised many realtors across the state.

Low interest rates and no limits on Veterans Affairs loans mean there are more buyers in the market. However, there is little inventory available.

“This is my third growth cycle, but I’ve never seen a market like this,” said Shannon Heaven, chair of the Honolulu board.

“We kind of have the perfect storm so we find that we are begging people to put properties on the market because we have tons of buyers who are just looking for a place to live,” she said.

Heaven added that 80% to 90% of homebuyers in Oahu are residents and many are first-time home buyers taking advantage of great rates and looking for something bigger because they can work from home or don’t have to. no need to go to town.

“Our prices for single-family homes have just taken off,” she added, noting that Ewa and Kapolei were booming with sales.

The current median price of a single-family home in Oahu is $ 883,000, which is well above the affordability index for many residents. For those who can afford it, however, she said they had better be good to go as homes are on the market nine days on average.

“They’re competing with 28 deals per house that I’ve heard on the rise,” Heaven said.

It was also difficult for the people of Maui to get their foot in the door.

The median price of single family homes on Valley Isle is $ 950,000.

“The market is so fluid that I have a guy who says, ‘Hey, I want $ 900,000 for my house,’ and now I think you could get it,” said Joe Hogin, president of the Association. of Maui real estate agents.

“And it’s sad, it’s not fair for the kids here or even for the adults,” he continued.

“I work with a bachelor, born and raised here, who is looking for condominiums, and he really wants to buy a house, then a house comes in, then he gets a bid,” Hogin explained. “It could be from someone here, but you have people waiting and saving, and they have to prepare for it.”

About 30% of Maui’s homes have gone to mainland buyers, Hogin said, many are residents finally able to return home, but they are also seeing an increase in the number of millennial buyers on the mainland.

“It sucks up that inventory, you have these millennials in California who did this big job, and they’ve got $ 2 million to buy this house,” he said. “We are at a disadvantage, or the government has disadvantaged the children and people of Hawaii.”

He said the lack of well-paying jobs and affordable housing pushes locals out of the market.

The tourism-dependent island left many people in Maui jobless during the pandemic and uncertainty has kept many at home unable to pay the mortgage.

“Banks are respectful, they are not going to kick someone out during a pandemic, so they will wait, then some [foreclosures] is going to start showing up here and there, and I think it’s probably going to be like, two or three years, and you’ll start to see more and more foreclosures, ”he added.

“Everything goes up, but what goes up, it will go down. ”

Hogin believes that building affordable, high-density housing in neighborhoods close to jobs is a good start. He said the state should create more housing at all prices to allow families to start with entry-level housing and modernize as their families grow.

“Until we build more homes and diversify our economy to increase wages, you will continue to see prices rise and properties purchased by non-residents,” he said.

He said buyers in today’s market should expect to pay full price or more than asking price.

Hogin said sellers shouldn’t climb too high or their house will sit still.

He said people who have a job right now and pay more than $ 2,000 in rent should consider buying a condo now.

“Get something comfortable instead of paying someone else’s rent, pay your own mortgage, take advantage of the tax benefits,” he said.

“My philosophy is that you will get the one that you are meant to have,” Heaven said.

She said buyers need to be ready because there are dozens more that are.

She said people who have a real estate agent can register with Hawaii Home Ownership, which has a program called HOPE “Housing Opportunities for All”.

Buyers can enter a first-time home buyer class for $ 10.