Big Island Home Price Predictions
I see you there. Sitting in your cramped Midtown apartment, delaying your dream of Hawaiian home ownership. Your houseplants are dying in the shade of nearby highrises. Your dreams of an easy, breezy lifestyle are stifled by big city pollution.
If you’re waiting for home prices to fall before you start creating your Hawaiian dream, it might be a while. Unfortunately, home prices aren’t likely to decline anytime soon. So stop waiting and start shopping! Here’s what you need to know to navigate the housing market for the rest of 2023.
What’s Going On & What’s Likely To Happen
Housing analysts at Morgan Stanley predict that house prices are going to end the year pretty much where they were in December 2022.
Strategist James Egan recently told clients, “While we continue to believe that year-over-year home price growth will turn negative next month, we expect the time below zero will be short… We think there is more room to the upside in our home price forecasts than the downside.”
In other words: if you’re looking for the perfect time to buy a house, there isn’t a glaringly obvious moment on the horizon. Instead, you’ll need to create an aggressive house-hunting (and purchasing) strategy that works for you.
Lower Inventory = Higher Prices
So what’s the reason behind these stubborn house prices? It comes down to that most basic economic principle: supply and demand.
There’s no way around it, the housing market continues to suffer from a lack of inventory. According to Redfin, homes for sale are down 39% compared to pre-pandemic figures.
This low inventory results from a few factors.
On the surface, homeowners are hanging onto their homes thanks to relatively lower mortgage rates. Experts at Redfin suggest, “That trend will probably persist, as the Fed’s announcement that it may hike interest rates a few more times is likely to keep mortgage rates elevated.” Basically, people don’t want to list their homes because it will mean swapping low mortgage rates for higher ones.
Less obvious?
We’re still in a homebuilding slump. This slump has gone on for more than a decade, predating pandemic-related supply chain issues. In fact, the problem goes back all the way to the 2008 housing bubble collapse which caused many homebuilders to go out of business and leave the trade.
That trend, at least, is beginning to change. Stanley Morgan reports that new home sales increased 11% year-over-year. “In fact,” Egan noted, “new home sales made up the largest share of total transactions in the first quarter of the year since 2006.”
Start Your Hunt in Hawaii
Still need convincing that your Hawaiian homeownership dreams can’t wait? Check out some of my featured properties to inspire your house-hunt.
I have an exciting range of homes available at the moment. Multi-million dollar resort-style living with big sea views. Understated elegance in the coveted Puu Lani Ranch community. I even have a couple of lots for sale if you want to start from scratch.
Now more than ever, an experienced real estate agent makes all the difference when buying a house. When you’re ready to go property hunting on the Big Island, give me a call. I’ll help you navigate a challenging market without compromising your dreams.
Aloha, and welcome to Hawaii.