Hawaii Real Estate
|February 11, 2011|
|Keep in touch!|
Chris Lancaster, RA
Cell: (808) 489-1225
Median Sales Price:
Homes-$570,000 down 4.2%
Condo-$291,000 down 2.7%
Number of Sales:
Â Homesâ€” Â 199 up 11.2 %
Â Condosâ€” Â 265 up 9.5%
Average Days on Market:
The Window of Opportunity is Closing!
In every Real Estate Market there are windows of opportunity. Over the past few years we have experienced radically low mortgage interest rates, a flood of foreclosures and a correction in sales prices. These factors have lead to huge savings for home buyers. Â However, times may be changing and this current window of opportunity may be coming to a close.
While prices have not jumped significantly there is a chance they could in the next few years. In a recent article from the Star Advertiser, UHERO (University of Hawaii Economic Research Organization) forecasted that the median home price would jump from todayâ€™s median of $570,000 to $718,000 by 2013. While that is great for current owners, current buyers should jump in now while home prices are still at bargain basement values. Realtors are always asked the question, â€œWhen is the bottom of the market?â€ Well, it may have already passed us by. Donâ€™t wait until the next bottom as the last time we hit bottom was 10 years ago in the year 2000.
The window is certainly closing when it comes to mortgage interest rates. UHERO forecasted interest rates to continue to rise in 2011 and end the year around 5.50%. Over the past 6 months interest rates have risen from below 4% to the 5% range. What type of affect does this have on a buyer? Given a $400,000 mortgage, the increase in payment would be approximately $285 per month or $34,200 over the next 10 years. Does that mean buyers should wait on the sideline until rates drop? Definitely not! It is more likely that rates will continue to rise rather than fall again. Consider the following historical facts. During this last expansion cycle rates dropped below 6% in 2002 and have been below that mark ever since. Prior to 2002, the last time rates were below 6% was in 1966. That means we experienced 36 years of 6% or higher.
What should you do? If you are a buyer or looking to upgrade in this market, be more aggressive in finding the right home and consider properties which may not be the perfect fit, but could be after a few minor repairs or improvements. In todayâ€™s low inventory environment you will probably be competing with other buyers, so when making offers, determine the highest price you are willing to pay for the property and then work with your realtor to negotiate the terms to get your offer accepted. Look for investment opportunities to increase your wealth. Banks are advertising equity loan rates for as little as 1%. You can leverage those dollars into a down payment for a small investment property which can grow in value as the market appreciates.
Call me today to discuss how you can jump through the window of opportunity before it closes. For More information please visit us at www.MyHomeOnOahu.com - Waikiki - Kaka'ako - Honolulu real estate or call Chris Lancaster, RA @ (808) 489-1225