I get asked a lot about the market recently, so just think of it like this:
Imagine you are driving down the highway. The speed limit is 65 mph, but you and the many other cars on the road are humming along at 85-90 mph. You’ve been traveling this speed for well over an hour. You are making great time. You feel great. But then you notice that cars coming toward you are flashing their headlights. You know what that means: an upcoming speed trap. Lo and behold, in the distance you spot a car on the side of the road. You slow down to 65 mph, just in case, and as you approach the car you see it’s a police vehicle with an office pointing a radar detector at the traffic. Because you slowed down, you don’t get pulled over for speeding, but now you and the cars around you are all traveling at the speed limit of 65 mph. Even though that’s the correct speed to be traveling, you feel like you’re moving at a snail’s pace. You’re agitated because you perceive that you’re moving so slow. Are you really moving as slow as a snail? Of course not. Sixty-five miles per hour is fast. It’s also the normal speed limit. Going this speed, you will definitely reach your destination within a reasonable time. However, because you spent so long going so fast, your perception is that you’re barely moving now.
This analogy describes the current real estate market perfectly. I expect our single family homes to slow from todays (YTD ) of 16.09% to about 4-7% appreciation by the end of the year. Condos will be another story, they are at 29% appreciation YTD, and will probably slow to 10-15% appreciation by the end of the year.
Full disclaimer, this is just an educated guess, based on my 19 years experience here in West Hawaii, I do not claim to have a crystal ball