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Sales of Oahu Homes Cool Amid Rising Mortgage Rates |
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| Median sales prices remain relatively flat, active inventory builds gradually. |
| I've been hearing this a lot lately, "I'm waiting for the crash!" Why do people automatically assume there's going to be a crash? I'm not saying prices aren't going to go down but home prices went up 25% in one year, do we really think it's going to go back down by anywhere near the same amount? It's important to look at the facts when trying to determine what's going to happen to the real estate market. 1) Because of the recent appreciation of the market, American's are sitting on a lot of equity in their homes. 2) Inventory remains very low. 3) Building costs remain very high as supply chain and material costs were disrupted during the pandemic. Rising interest rates have definitely cooled off the market but there's no data to support a major crash on the horizon. In fact I think this is one of the best times to buy a home because my clients are getting them for under asking, under appraised value, and with credits since there's less competition. Once interest rates settle and the Feds stop raising them competition will return. When buying real estate, the focus should be the next 5-10 years, not the next 5-10 months! Contact me directly so I can assess your particular situation. |
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| October 2022 Oahu Real Estate Market Update |
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| Rising mortgage rates are weighing on home sales. Year-over-year, single-family home and condo sales dropped 34.4% and 19.3%, respectively, and compared to August 2022, single-family home sales were down 11.5%, while condo sales dipped 2.4%. Pending sales activity was also muted compared to last year, with contract signings falling 43.7% for single-family homes and 30.7% for condos.
Median sales prices remained relatively flat over the last several months and saw a slight bump up compared to the same time last year. In September, the single-family home median was $1,100,000, up 4.8%, while the condo median sales price was $502,500, a 5.1% increase from a year ago.
With rising rates and inflation, buyers are reevaluating what they can afford, and this is having ripple effects across supply and demand in our local housing market. Fortunately, our 10-year appreciation rates on O‘ahu have been historically favorable, so despite interest rates being about 6%, real estate is still a smart investment. It’s important to remember that the market varies from neighborhood to neighborhood, and housing opportunities are available for everyone. |
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| Are you waiting for a real estate crash? |
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| | | Is there going to be a real estate crash? |
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| | | Want to sell your home but don’t know where to go? |
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| | | | Attention first time homebuyers! |
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| | | New Condo Alert: Alia Kaka’ako |
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| | | Do You Live In Hawaii? It’s Time To Become a Homeowner |
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| | | Want to know the secret in getting a good deal in today’s real estate market? |
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| | Are you waiting for a real estate crash? That could be a costly mistake! |
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| | | Do you know the 12 different regions that make up Oahu? |
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| | | If it isn’t scheduled, it won’t happen! It’s all about work/life balance. Schedule it. |
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| | 400 Hobron Lane, Unit 1110 |
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| | | | 94-1069 Anania Circle, Unit 17 |
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We got several all cash offers around $400,000 or slightly less but they just didn’t seem like serious buyers to me. The unit is old and has deferred maintenance so it seemed like those buyers would have just asked for a lot of credits during inspection to get the price down even lower. I instructed my seller to stay the course and wait for the right buyer. Just because properties aren’t flying off the shelves anymore doesn’t mean there aren’t motivated buyers out there! It just means it might take a little more time to find the right buyer. So we waited a bit and sure enough 2 new buyers came along and one of them offered full asking. Cash is not always king, at the end of the day it’s the closing price that determines what proceeds the seller goes home with. |
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| In order to incentivize a buyer during a higher interest rate environment, we decided to offer a $10,000 closing credit to help buy down the rate with points and lower closing costs. It works the same as a price reduction for the seller, but for a buyer it’s more beneficial than a price reduction because they are able to lower their interest rate and have a lower monthly cost which will save them more money in the long run. Sure enough it worked and we were able to find a VA buyer who financed the purchase 100% and got the nice credit from my seller to lower their interest rate. Properties are not flying off the shelves anymore so you have to think creatively in order to find a buyer in this shifting normalized market. It’s important to have an experienced agent who’s willing to put in the effort to get the job done. |
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| | | 2101 Nuuanu Avenue, Unit I2503 |
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| We physically and virtually staged the unit with professional photography. We found 2 early all cash buyers who both backed out for various reasons. We stayed the course and eventually a 1031 exchange buyer came along willing to pay all cash just under asking. It takes a little more patience in this new cooled off market but eventually the right buyer will come along. Our sellers owned this unit for a very long time and now have the funds necessary to pay off their other mortgage and live comfortably for the rest of their lives. The market has shifted a bit so it takes a proactive, experienced agent to properly get your home sold for the highest possible price. |
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| Beat out 5 other offers to help my buyer get this fixer upper home. 2 stories with separate rentals under $1M in Punchbowl is not bad. Also received a nice $10k credit from seller and had them tent fumigate the home for us. We ran the transaction for our buyers remotely since they are moving here from San Diego so constant communication helped put them at ease. |
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| | 1020 Aoloa Place, Unit 305A |
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| | | | 1139 9th Avenue, Unit C106 |
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| | 1139 9th Avenue, Unit C107 |
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| | | | 91-926 Kulana Court, Unit K4 |
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| | | As a preferred broker for this project, I'm able to help my clients purchase a unit in November before it goes out to the public in January. I'll be doing a private presentation of this project this Friday Oct 21 5pm at Park Lane if you would like to attend. Contact me ASAP for a private presentation to learn more. |
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| | Mortgage Credit Certificate Program is back! |
| The MCC Program provides homeownership opportunities for qualified households through a federal income tax credit. The MCC can help first-time homebuyers qualify for a mortgage loan by increasing their buying power at their current income. MCCs entitle an eligible borrower to a direct tax credit against the eligible borrower’s federal income tax liability, making more income available both to qualify for a mortgage loan and to make the monthly mortgage payments. |
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| Federal Court Judge Watson grants motion for preliminary injunction in its fight against the ordinance 22-7 to limit rentals on Oahu to 90 days or more! |
| Against this backdrop, 30+ day residential home rentals remain viable and outside the restrictions of Ordinance 22-7, whether under the HILSTRA 30-89 days home rental construct or the MTM format under the HRLTC. Read more here. |
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Thanks for reading and subscribing! Ready to achieve your next real estate goal? |
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| | Ben Fieman
Top 1% Real Estate Agent on Oahu $150M+ sales, 200+ transactions Realtor Broker | RB-23470 | MBA
Compass Hawaii, Founding Agent
M: 808.900.4487
E: Ben@Fieman.com |
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Compass is a licensed real estate broker and abides by Equal Housing Opportunity laws. All material presented herein is intended for informational purposes only. Information is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description. All measurements and square footages are approximate. This is not intended to solicit property already listed. Nothing herein shall be construed as legal, accounting or other professional advice outside the realm of real estate brokerage. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions. |
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