10-15% Increase in Property Value on Oahu, Hawaii? Q3 2023 Real Estate Market Update and Forecast
Find out what is really happening with Oahu’s Real Estate Market!
There are lots of chatter on the internet about how home prices hit record highs in some areas of the U.S. when just six months ago they were saying some areas of the U.S. were experiencing up to almost 30% decrease in home prices; mortgage demand dropping by 27%; and some experts saying the home prices are going to go through the roof. My goal is to give you a detailed analysis of what's actually going on here on Oahu and what you can expect going forward.
If you compare July's market report from this year to July's market report from 2022, you are going to see that there is a decrease in home prices for Single Family Homes (SFH) while we saw no change in the condo market on Oahu which were mainly driven by rising interest rates. However, home prices did not decrease significantly averaging just under 2% for single family homes.
These numbers are deceiving however, it’s important to understand that year over year numbers will largely vary based on location, for example Kailua SFH values decreased by 3% but for condos it decreased by 14% whereas in Hawaii Kai SFH values decreased by 11% but for condos it increased by 3%. Overall, Home prices didn't take a large hit because the inventory in Hawaii is already low compared to other markets in the U.S., additionally the rising rates also lowered the supply of homes coming on the market by forcing current homeowners who are locked in at a much lower rate to not sell unless they had a compelling reason to sell.
Unfortunately, Federal Reserve officials believe that more U.S. rate hikes are necessary to bring down inflation to the target of 2%. UHERO's Executive Director and Professor of Economics at the University of Hawaii, Carl Bonham, believes that a small rate hike is likely as we head into the fall and winter of 2023. This will have a slight impact on the housing market as the buyer pool on Oahu may shrink a bit more.
Many experts believe that as we approach spring and summer of 2024, the interest rate may begin decreasing. Now this is going to have a large impact on the housing market as buyers who've been waiting on the sideline or those who previously couldn't afford a home will jump into the buying pool. As we know, increase in demand typically drives up prices. As a result, experts believe that home prices overall will increase throughout the U.S. and specifically for Oahu, they are anticipating home value to increase by 10-15% over the next few years.
If you are a buyer or thinking about buying, based on what I'm seeing and what the experts are forecasting, between now and this winter is the best time to buy but with a caveat, only if you can afford. Because right now, there aren't that much competition, and I have been able to get large discounts and concessions for my buyer clients. You can refinance as rates drop and enjoy the appreciation as buyers who were waiting for the rate to drop jump back into the market.
If you are thinking about selling, hold off until next year late spring to summer unless you HAVE to sell. Even if you have to sell right now, there are ways to get top dollars with a cutting edge marketing plan which encompasses a dynamic blend of traditional, social, and digital marketing strategies.
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