Though COVID-19 hasn’t struck Oahu, Hawaii as hard as it has mainland, the real estate market has suffered. However, agents expect it to bounce back, and here’s how!
The closest thing Americans get to a tropical paradise is Hawaii. With its sandy beaches, friendly faces and beautiful waters, how could you not want to grab your own little piece of heaven? At the beginning of the year, there were billions of dollars flowing through the Hawaiian real estate market, but since COVID-19 continues to plague the United States, the market in Oahu has taken a hit.
The question on many people’s lips is whether or not it’ll bounce back. In fact, as of June 24th, 49% of real estate agents say business is improving despite the current circumstances and 23% say things are holding steady.
So, what can we expect for Oahu’s real estate market in the second half of the year? Let’s take a look!
Housing inventory in Oahu
If you were to look at 2018’s housing market, you’d notice that the number of single family homes that were being put on the market increased by 7.5% while the number of condos going on the market actually decreased by 7%. You would think that with more single-family homes being on the market, it would be easier to find affordable housing. That isn’t necessarily the case.
Even though the interest rates are at an all time low, buyers are having a difficult time trying to purchase a house because inventory is low, therefore making it a seller’s market. Why, seller’s are often getting multiple offers on their property!
Low interest rates
With mortgage interest rates being so low, it would be an excellent time to refinance your house if you already have a mortgage. However, because of the rise of unemployment and large numbers of applicants requesting mortgage relief and forbearance, lenders are more hesitant to lend out money. Lending companies are increasing their qualification requirements and some people who may have been approved before the pandemic may not be approved now.
As a buyer, you need to keep an eye on your debt and your credit score. Try to keep your credit usage below 30% and always pay on time. By doing these things, you’re giving yourself a better chance of your application being approved.
Decreased housing prices
June 2019 was a great year for Oahu’s real estate market. 327 houses were sold and the median price was a whopping $800,000. However, fast forward to June 2020, business wasn’t as good. Only 302 homes were sold (a 7.5% decline) but there was only a slight decline in price, the median being $770,000 (a 3% decline).
The sad reality is, we don’t know what to expect going forward. Will people still be hesitant about putting their homes on the market out of fear of COVID? Will prices continue to drop due to economic struggles? No one knows.
What we can say is that the market will continue to work in the seller’s favor. Sellers who have been toying with the idea of putting your house on the market for some reason or another, now may be the perfect time to do so. As more and more people (Americans and foreigners alike) decide to make Oahu their home, they’re going search for their dream home, get a mortgage while rates are low, and it’s possible that a bidding war could start on your home.
Just remember, the coronavirus may have caused the country to come to a grinding stop, but people are always going to need housing - even if it that housing is a beach house!