Have you been on the fence wondering if you should sell your condo or not?
Taking the Plunge
About two months ago, I listed a condo near Pearl Ridge, O’ahu, and it went into escrow within eight days. To some, this may not be a big deal. The single-family and townhouse market has been skyrocketing for over a year, but a condo?
So let’s go back to talking about this condo I listed. It all started six months ago when I had to tell my seller the dreaded news that he would be taking a loss. He bought his condo four years ago for $387,000, and if he sold it, he would have to come up with extra cash to close. Fast forward six months, his tenant decided to vacate, so I told him the good news that the market was up, and there was a good chance he would break even. In the end, instead of breaking even, he also made a decent profit. With great marketing strategies and timing the market, the value of his condo went up approximately $42,000!
So why did the market go up so fast? Based on my 30 years of analyzing market conditions, this is my personal opinion on why I believe this is what is happening:
1. Interest Rates
Mortgage rates are the lowest in my 30-year career history due to the pandemic. When I first started in the early ’90s, the interest rate was double from today’s rate. So a $200,000 loan today would give you the same monthly payment as a $100,000 loan back when. So meaning a buyer can qualify for twice as much today compared to back when of the ’90s. No wonder so many buyers are buying! Remember, this is temporary states the federal government to stimulate the market during the pandemic, so take advantage of the frenzy while buyers are still looking to buy!
2. Housing Proclamation
There are several proclamations right now, whether Federal or State, stating that investors aren’t allowed to terminate a lease on a month-to-month tenant. Many sellers cannot sell their investment property due to a government proclamation based on the pandemic. If you have a renter who is not paying or a tenant on a month-to-month lease, it’s harder to force them to vacate. Many investor-sellers who want to sell are not allowed to sell, limiting the number of properties on the market.
3. Owner Occupant Sellers
Owners who live in the home who were once reluctant to sell in fear that a buyer walking through their home may give them the Coronavirus were unwilling to sell, which added to the shortage of homes. As more people get vaccinated, sellers are slowly open to marketing their property again.
4. High-Rise Condo Sales Are on the Rise
As the prices for single-family homes and townhomes are no longer affordable, some buyers are priced out of that market and are buying condos. Also, now that more people are getting vaccinated, the fear of being in the same elevator with a potentially infected person is not high on people’s list.
So summing it up, yes, if you’ve been thinking about selling your property, this may be a good time to do so. Of course, everyone’s situation varies, so contact me, and I will use my 30+ years of experience to help guide you through this emotional process. Wendy Oshiro Dinnocenti, R