Lately, everyone is asking about the market. Is it shifting? Are prices coming down? Is it a good time to buy? To sell? The answer is, “Maybe.” Overall, single-family home sales decreased roughly 10 percent from the same time last year. Condo sales are down slightly more. Inventory is up, and so is “days on market.” But, even with increases in inventory, many properties are still selling — and selling fast. Most are selling within 98% of list price. Why are some properties moving (and moving quickly), while others may be languishing? The answer has to do with location. Unlike other assets, real estate cannot be moved. It is captive to the characteristics and nuances of the market in which it is located. All real estate is local.
So, in order to assess value, think local. Though sales volume may be down overall, what’s the tempo in your neighborhood? For example, as of this writing, there are only seven single-family homes on the market in Hawaii Kai for under $1,000,000. There is only one on the market for under $900k. That’s a tight market. In Makakilo, there are 13 homes on the market under $800,000. There are 13 homes in escrow under $800,000. Homes are coming on the market and being absorbed by the market at an even rate. In Kalihi, we have a house that currently has multiple offers on the table!
All Real Estate is Local. Each neighborhood offers amenities, characteristics, conveniences, and attractions that are unique to that neighborhood. External factors specific to location influence demand, and ultimately, value. Think rail. Think zoning laws, new legislation, development (or lack thereof). One thing is certain — each community, and each neighborhood within a community, must be assessed on its own. To dial it down further, even specific blocks and streets within a neighborhood have differing values. So, what does this all mean? As a Seller, get the facts. News isn’t necessarily the truth. The market is still relatively strong, and in some areas, it is quite robust. Your home is “local,” and it will sell relative to the prices of the surrounding homes in your neighborhood. Perhaps for a bit less than last year, perhaps for a bit more.
If You’re a Buyer, Don’t Wait.
The sky isn’t falling. Neither is the market. Yes, it’s contracting, but relative to one of the longest, strongest runs we’ve ever seen. Check out the facts. Ask your Realtor about absorption rates in the neighborhood. Are homes selling quickly? What are the days on market? Are prices stable? Increasing or decreasing? Interest rates remain very attractive, so if you want to buy, buy. Real estate is an appreciable asset. It cannot be moved. It is one of the best investments you can make, and it’s local!