At midway through 2017, Oahu housing prices are on track for another record-breaking year, with the median single-family home price reaching $750,000, and the median condo price at $400,000 for the first six months of the year.
By the end of 2017, we’ll likely see a median single-family home price of $775,000 and a median condo price of $415,000, according to research from Locations.
ARE WE IN A BUBBLE?
“We’re not in a bubble,” according to Scott Higashi, CEO of Locations. “The market is healthy, with moderate, single-digit growth and an up- tick in inventory. However, the market is still moving quickly, with a median 18 Days on Market in the first half of year.”
RISING RATES UNLIKELY TO AFFECT PRICES
Locations research shows that previous upward price cycles have all occurred during times of higher interest rates, so homebuyers hoping a rise in interest rates will hamper rising prices shouldn’t hold their breath. And because interest rates will now be more closely tied to the economy, homebuyers should keep an eye out for signs of rising rates.
NEW CONSTRUCTION NOT KEEPING PACE
Will all of the new high-rises popping up in Kakaako and the sprawling planned communities of Hoopili and Koa Ridge under construction cause a slowdown in prices? Again, it’s not likely. Oahu needs 3,500 new homes per year just to provide for new households, and we’ve been about 2,000 homes-per-year short of that need for many years. Even Hoopili and Koa Ridge together will provide less than 1,000 new homes a year over the next two decades. And while new construction in Kakaako has added significantly to inventory in the urban core, demand has only gotten stronger.
A BRIGHT SPOT FOR BUYERS
While homebuyers are facing rising prices, there is some welcome news in 2017. There are about one hundred more condos available for sale this year than last, half of which are in the desirable Kakaako-Ala Moana area. There are also pockets of new condo inventory in Down- town, Waikele, Waipahu, Waipio, the Leeward region and the North Shore.
“Buyers shouldn’t be discouraged,” Higashi assured. Interest rates, while up 11.5 percent over last year to 3.88 percent at the mid-year point, are still at near-historic lows, helping to boost buyers’ purchasing power.
PARTNER WITH A PRO
Your best bet in this market is to get prequalified and work with a REALTOR® who can help you to identify a home that will best fit your lifestyle and budget. Remember, each neighborhood is different. While median prices may look dizzying, there are still great values out there. To find out what’s happening in your neighborhood, contact your REALTOR®.