Recently in Hawaii, we have seen the fast pace of single-family home purchases on Oahu, especially on the West side of Oahu. Many people are finding it out their hesitation to purchase a home 3 months ago is costing them maybe 30,000 to 100,000 USD in price differences just in a 3-month time span.
Many asked us if it is too crazy to get into the real estate market right now, knowing that highly likely they will be facing competition in the heated market. However, the truth is the median price of single-family homes on Oahu surpassed the 900k mark just recently which means 50% of home sold is above 900k and 50% were sold under 900k USD. So the single-family homes you were looking at if it was still under 900k, it is not a bad investment if you look at the age of the construction and the median price of the homes in this region.
The market was actually already seeing some increase actions from the end of the last year 2020. At that time you might still be able to get some homes under 800k on the West side of Oahu. Yet many didn't act because they thought it was still a pandemic situation, the market could not have become so competitive so fast. Many had just sat on the sideline and watched. Yet to their surprise, the market was getting heated more and more as we approaching 2021, especially for the single-family home market. Usually, it takes about 45 days from the acceptance day to the closing day which is more than a month before the final sold price would be available to look at in public. When the final number came out, many have learned that bid ups were actually happening even in the pandemic time. We tried to warn our clients that it might get even more competitive as time went by when the interested rate and the inventory of homes were at historic lows
Combinations of different factors and the increase in demand for single-family homes eventually drove up the price of the homes in Ewa. Please keep in mind at that time many of the international investors still couldn't come here easily due to many restrictions. In another word, when the travel eventually opens up more, groups of investors will come and that will again be the driving force for the price to remain stable if not aggravate price to increase even more.
So is it better to invest now or later? We think that depends on your comfort level with your budget, getting home now that is still under the median price for the single-family home is not a bad idea. If you look at the median price trend in 10 years for single-family homes, if you think at 2017 it was the peak and didn't act you then missed the appreciation that you are seeing now in 2021. Again the median price means 1/2 of the homes sold above and 1/2 of the homes sold under 900k. So you can see why people are bidding up for homes in Ewa that are newer and cheaper compared to other parts of the Oahu. On the East of Oahu price range 800k to 900k you may not be able to find a new construction and it is highly possible that you can only find those fixer-upper types of homes. So please don't feel that you are buying at a loss if you are buying a newer home under 900k plus future possibilities. So is it really crazy the current market? Yes and No. Yes because we see the price goes up fast on the west side. No, because those homes are still under 900k and are newer than the East side. Another question to ask yourself is where on Oahu can you still find single-family homes that are newer and nice under 900K?
For those who want to get into the condo market knowing that the condo prices have been affected by the world situation and travel restrictions, it is a good time to get into it. We are pretty certain that the prices for those condo units will regain their footing very soon if it has not already done so. For example, Moana Pacific towers had many listings during 2020, but now we are seeing many listings went into escrow fast.
Even for the Trump Tower units, the prices have dropped quite deeply and many listings were on the market long time. Nevertheless, we start seeing more listings going into escrows faster. In 180 days there are 15 listings in either sold or escrow status. Those are the signs for the smart investors to pick up. If you are thinking of buying don't wait. Time is money and a month difference can really add to your cost of getting a property. If you think that the price will drop very soon, I hope you can contact us and we will send you a trend of Hawaii home median prices in the past 35 yrs. That way you can see your thinking may cost you, even more, $$ in the long run especially if you need to get a loan.
Frustrated with the competitive market?
You are not alone. Many have tried and lost in the bidding process.
If you don't like bidding and competition, but still want newer construction？ You may consider those lottery drawing homes. For those homes, you will need to use them as your primary home for at least a year. Even though Ewa and many other areas of Oahu are seeing competitions, it should not stop you from making your offer on the homes you like. Knowing what we have talked about above, and your comfortable budget range, we will give you better advice on how to win in this competitive market today. It is not as scary as you think, just need to approach it reasonably and with proper guidance to protect your own interest.
For your own benefits, we recommend you to look for a good real estate agent's help. This could mean a world of differences for you.
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