What The Heck Is The Honolulu Real Estate Market Doing?
August 30th, 2010 categories: The Market
Now that the end of summer is here and nearly 75% of 2010 is gone, many have been asking me what is going on with the Honolulu real estate market? Here are my thoughts.
1. In general, the market is good for properties that show well and are priced within the range of the most recent comparable closed sales. Is it as strong as it was at the peak? No, but there is good demand and I have been seeing listings sell relatively quickly in core Honolulu.
2. Financing is the key. Houses and condos that fit into conventional, FHA and VA financing guidelines are in demand and they’re selling quicker than properties that need jumbo financing.
3. Appraisers seem to be loosening up. Last year at this time, it seemed that appraisers were being very stingy with their valuation prices for homes. A year ago, appraisers were committed to giving values at the lowest possible market level and therefore; they were, in my opinion, artificially holding back the market. In the last 5 months, I have noticed that appraisers are more willing to move prices to the middle and upper range of a properties market value.
4. Washington needs to get its act together. In general, Hawaii is seeing gains in our tourism market and since this is one of the major driving forces in our economy, it is not surprising to see Waikiki, Ala Moana and retailers full of shoppers. HOWEVER, I sense a bit of fear regarding the national economy! It seems that people are unsure of what will be coming out of the elected “nuts” in D.C. and therefore they are a bit hesitant to jump into the real estate market with reckless abandon. When things settle down on a national level, I believe you will see Hawaii real estate pick up very quickly.
5. Potential increase in taxes. Since taxes are scheduled to go up on January 1 (if congress does nothing), I have a number of clients that are selling their properties this year to take advantage of the lower long-term capital gains rate. If you are thinking about selling next year, you may want to investigate your exposure to the capital gains tax. If you have to pay taxes, then it might make sense move the sale into 2010 (CHECK WITH YOUR ACCOUNTANT).
In summary, I am pessimistically optimistic about our market. For reasons outlined in this blog over the last several years, Honolulu remains a good long-term investment. Given the recent slowing in the number of homes resold nationally, now may be a very good time to buy into our market. Since urban Honolulu has recovered some of the equity it lost between 2007 and 2009, this maybe a very good time to sell (if you are planning on selling between now and 2012).
If you would like to discuss your real estate needs, feel free to call me at 808-737-2093 or toll free at 877-737-2093. You can email me at keahi@lava.net.
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