Real estate prices on O’ahu hit new highs in March 2022. The median single family home price peaked at $1,150,000 and condos peaked at $500,500. Both only took 9 days to go under contract. Meanwhile, single family home sales are down due to lack of inventory and buyers getting priced out of the market. With people heading back to the office from remote work, perhaps we’ll continue to see more condo sales as the year goes on and prices increase.
Last year, when interest rates were 3%, a $3000 monthly payment afforded you over $600,000 in mortgage. At today’s rates with an increase to 5%, that same payment gets you a mortgage in the $500,000 range. Buyers who either got burnt out last year or said, “We’re just gonna wait for the market to cool off,” are now dealing with higher interest rates. Have prices come down? Nope. Many buyers are feeling the FOMO and paying $100,000 over the asking price. It’s crazy.
So what should you do? If you’re a buyer, you just have to get in. Instead of searching for your 30 year home, make it a 3 to 5 to 7 year plan instead. Allow the home to appreciate, force you to save, and restructure the loan as you pay it down or leverage it to work towards that dream home. The graph above shows you how homes appreciate on O’ahu over time. Historically, it’s 4-5% per year. If you’re a seller who’s waiting for the market to rise some more, don’t wait. Get that home on the market and capitalize on the summer months ahead. Plenty of buyers are out there will be so appreciative of your property. Wait too long and you’ll be selling in a flat market stressing over why your property hasn’t gone into escrow in 2 weeks like your friends’ houses.
Okay…now for a story.
I was on the plane coming home from a little weekend getaway last week. I was reading Entrepreneur Magazine and finishing a Bikini Blonde (beer, that is) when a guy in the row behind me said, “So, you’re an entrepreneur?” I was in semi-vacation mode and in my opinion, I wasn’t the usual, sunny Maila I always am. He asked, “What do you do?” Thinking I’d never see him again, I replied in a monotone voice, “I’m a real estate agent.” That usually goes one of two ways: either people turn and run or they wanna know all about the crazy real estate market and when it’s gonna crash. Instead, he said, “Do you do videos on YouTube?” I thought, oh crap. I really should have been nicer. “Yes, I do” I said. The seat belt sign went off and everyone started to shuffle as we were deplaning, he said, “My wife and I watched all your videos before moving here from Colorado. We wanted to learn about the neighborhoods. Things got a little chaotic, not only as we were shuffling off the plane, but in my mind. People are actually watching my videos. What are they doing as a result? Do they watch them for the scenery? Do they know I’m a real estate agent? While I hope my videos help people, I want them to pick me to be their realtor! Why? Because I’m good at it. I love it. I genuinely helping people (although my helpful attitude in that very moment left little to be desired). I’m aint no saint. I like getting paid too.
“My name’s Mike” he said, and shook my hand. I said, “I’m Maila. So nice to meet you.”
And that was that. Probably should have handed him my business card, but he knows where to find me on YouTube.