Market Trends

Oahu Home Supply is Low and Demand in High

For Sale: $814,999 4/3.5 Total Sqft 2,684 91-1053 Kaihanupa St, Ewa Beach 96706

In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. Many experts are projecting that home values could appreciate by another 5%+ over the next twelve months. One major challenge in such a market is the bank appraisal.

If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that recently closed) to defend the selling price when performing the appraisal for the bank.

Every month in their Home Price Perception Index (HPPI), Quicken Loans measures the disparity between what a homeowner who is seeking to refinance their home believes their house is worth, as compared to an appraiser’s evaluation of that same home.

Bill Banfield, VP of Capital Markets at Quicken Loans urges anyone looking to buy or sell in today’s market to remember the impact of this challenge:

While a 1 or 2 percent difference in home value opinions may not seem like a lot, it could be enough to derail a mortgage. A homeowner (or a buyer) could be forced to bring more cash to closing in order to make a mortgage work if the appraisal is lower than expected. On the other hand, if an appraisal comes in higher, they could be surprised with more equity than they had planned. Either way, if owners are aware of their local markets it will lead to smoother mortgage transactions.

The chart below illustrates the changes in home price estimates over the last 12 months.

Bottom Line

Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, let’s get together to discuss this and any other obstacle that may arise.

If you need any information on new homes or resales on the west side of Oahu, feel free to contact me.

Aloha for now, see you next time,
MM

P.S. I love my Ewa Beach life and would love to share with you about it!
Live the dream…Get your Hawaii Life now. #MMSellsHawaii

About the Author

Michele McKinley

Michele faces new challenges directly and makes it work. Raised in San Diego, California, Michele started selling Real Estate in the late 1990s, she was selling new homes for an Orange County developer. Michele has sold over Sixty Million in transactions in her career. Michele attributes her success to a number of reasons, but mostly because she thoroughly enjoys her clients and gives each of them top priority. She knows how to utilize systems such as Transaction Management that frees up her time to do what she loves to do the most - connect with, support and represent her clients. Michele also loves to golf and spend time on the beach and with her 'ohana. You can email them at michele@hawaiilife.com or via phone at (808) 756-7099.

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