HONOLULU (KHON2) — Hawaii real estate is at an all-time high and the current trend has surprised many realtors statewide.
Low-interest rates and no limits on Veterans Affairs loans means more buyers are in the market. There is little inventory available, however.
“This is my third upcycle, but I’ve never seen a market like this,” said Shannon Heaven, Honolulu Board of Realtors president.
“We have sort of the perfect storm, so we’re finding that we are begging people to put properties on the market, because we have tons of buyers that are just looking for a place to live,” she said.
Heaven added that 80% to 90% of the homebuyers on Oahu are residents and many are second-time homebuyers taking advantage of cheap rates and looking for something bigger because they may be working from home or do not need to commute to town.
“Our prices for single-family homes just took off,” she added, noting that Ewa and Kapolei have been booming with sales.
The current median price for a single-family home on Oahu is $883,000, which is well above the affordability index for many residents. For those who can afford it, however, she said they better be ready to go because houses are averaging around nine days on the market.
“They’re competing between I’ve heard upwards in 28 offers per house,” Heaven said.
It has been hard for Maui residents to get their foot in the door as well.
The median single family home price on the Valley Isle is $950,000.
“The market is so fluid I get a guy who says, ‘Hey, I want $900,000 for my house,’ and now I’m kind of thinking like you just might get it,” said Joe Hogin, Realtors Association of Maui president.
“And it’s sad, it’s not fair to the kids here or even adults,” he continued.
“I’m working with a single guy, born and raised here, looking at condos, and he really wants to buy a house, and then a house comes on, and then he gets outbid,” Hogin explained. “It could be from somebody here, but you got people been waiting and saving, and they have got to prepare themselves for it.”
About 30% of homes on Maui have gone to mainland buyers, Hogin said, many are residents finally able to move back home but they are seeing an uptick in mainland millennial buyers too.
“That is sucking up this inventory, you got these millennials in California that have been doing these big jobs, and they have $2 million just buy this house,” he said. “We’re at a disadvantage, or the government has made a disadvantage for the children and the people in Hawaii.”
He said, lack of high-paying jobs and affordable housing are pushing locals out of the market.
The tourism-dependent island has left many on Maui without jobs during the pandemic and the uncertainty has kept many people in their homes, unable to pay the mortgage.
“The banks are respectful, they’re not going to kick somebody out during a pandemic, so they’ll wait, and then some [foreclosures] will start popping up here and there, and I think it’s probably going to be like, two or three years, and you’ll start seeing more and more foreclosures,” he added.
“Everything’s going up, but what goes up, it’s going to go down.”
Hogin believes building high-density affordable housing in neighborhoods close to jobs is a good start. He said, the state should create more housing at every price point to allow families to begin with entry-level housing and upgrade as their families grow.
“Until we build more housing and diversify our economy to increase wages you will continue to see prices going up and properties being bought by non-residents,” he said.
He said, buyers in today’s market should expect to pay full price or more than the asking price.
Hogin said, sellers should not go too high or their house will sit.
He said, people who have jobs right now and pay more than $2,000 for rent should consider buying a condo now.
“Get something comfortable instead of paying somebody else’s rent, pay your own mortgage, take advantage of the tax benefits,” he said.
“My philosophy is you will get the one you are meant to have,” Heaven said.
She said, buyers need to be ready because there are dozens of others who are.
She said, people who have a realtor can sign up with Hawaii Home Ownership which offers a program called HOPE “Housing Opportunities for Everyone.”
Buyers can get into a first-time homebuyer’s class for $10.