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Chris Lancaster's Oahu Real Estate

By Chris Lancaster | Real Estate Pro in 96814

Bottom of the market??

BUMP! Did You Feel The Bottom Of The Market?

 

It is a question asked every day. Have we hit the bottom yet? Buyers want to know if we hit bottom to determine if it is the best time to buy. Sellers want to know if we hit bottom to determine if they should wait to sell as prices rise. Any realtor will tell you that you don’t know you are at the bottom of the market until it has passed you by. Have we passed it by?

 

In 2007 home prices reached a record high of $640,000 which had home owners jumping for joy. After the Mortgage crisis reared its ugly head, prices dropped to $620,500 in 2008 which was a 3% decline. In 2009 we felt the aftershocks of the mortgage problems in the form of the financial crisis which caused prices to drop again by another 7.3%. At that point, which may have been the bottom, the median sales price for a home was at $575,000. Earlier this month, Hicentral MLS Ltd, released their end of year statistical report showing home prices climbing back up to $592,750.

 

Skeptics may believe prices will decline and make their case by pointing to rising interest rates, possible tax policy changes for homeowners and the fact that sales were accelerated in 2010 by the home buyer tax credit.

 

Take note skeptics, Hawaii is on our way back. The economy looks bright in that our number one industry, tourism, is back to the levels equal to the last economic boom. Hotel occupancy, visitor arrivals and visitor spending are all up significantly and match 2006-2007 levels. We have also seen our unemployment rate continue to drop back to normal levels (currently at 5.4%). 

 

If the 2 year dip in prices did in fact represent the bottom, what does that mean to buyers, sellers and home owners? Buyers should relish in the fact that mortgage rates are still below 5% allowing them to borrow money cheap and buy homes at affordable prices. Sellers should decide if they want to sell now while there is low inventory or wait until prices are at even higher levels. The University of Hawaii Economic Research Organization is predicting the median sales price to rise by 22% and hit $718,000 in 2013. Current Home owners may want to consider upgrading their homes by either buying a new home or renovating their current home and taking advantage of low interest rates. If you are planning on taking advantage of this market, call me today for outstanding assistance and service.

Contact Chris Lancaster, RA (808) 489-1225 

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