According to Hawaii economist, Paul Brewbaker, the recession ended in 2009. And even better, the Real Estate upward cycle began October 26, 2012.
We all can feel the effects of low inventory (especially since most of it is not the best housing), no new building, and pressure on prices. It means that prices are inching up. In fact, appreciation of a median single family home increased 10% last year and Mr. Brewbaker expects the median price of single family homes on Oahu to rise from $650,000 to $750,000 or higher; at minimum 15% this year.
But here's the caveat; the Feds will adjust interest rates upward when unemployment reaches 6% to 6.5%, as we have already reached their other target goal of 2% to 3% inflation. Upward interest rates limits the pool of qualified buyers and puts pressure on prices to remain steady or drop.
Here's the bottom line: homes on Oahu have mostly retained their equity value (Ewa being the only exception, and they are pretty much back on track). Builders can't ramp up fast enough and demand is there. If you are a buyer, the rates are at 3.42% for which you get a return of 15% appreciation - even if the rates go back to 6% you are still getting a deal!
If you are a seller, prices in most areas are back at the peak market price of 2006 (2007 was the over priced and 2008 was the fall) and if you have owned for a few years, price the home correctly, you will maximize your return on the sale of your property with an anxious pool of buyers ready to make multiple offers before the rates move up.
As Dr. Brewbaker says - the Recession is over, get over it and it's time to move on. Give me a call and let me show you how I can maximize your bottom line with our online technologies! Aloha, look forward to meetiing you in the marketplace!!
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