PCSing to Oahu – How to Navigate the Hawaii Housing Market

In real estate, it is common for buyers and sellers to set home prices in specific increments. When setting a listing price, it is common for a seller to consider the buyer’s search parameters and try and price their home in that pattern. This also works in reverse as many buyers will search in specific amounts. Depending on the markets and also the home prices, these amounts can be in smaller increments, or for areas like Hawaii, they can be much larger, such as $50k increments. Buyers might be searching home prices between $650k to $700k in Hawaii and on the mainland it might be $400k to $415k, for example. This is important since both the buyer and seller might be missing opportunities if they are not pricing accordingly.

It is also not uncommon for a seller to price slightly higher then what they would actually accept to see what might happen, and try and gain a maximum sales price. For military buyers and sellers, it can be a slippery slope. We are now right in the middle of prime PCS moving season. The 2017 VA loan limits vary by area and are higher in high cost counties. The maximum loan for Honolulu, Hawaii in 2017 is $721,050. This is important to know as many VA borrowers typically will obtain these properties using their benefits with little to no cash out of pocket. So with that said, many VA buyers in Hawaii may only look at homes with amounts up to the maximum allowed by the VA loan limits. Of course, they can buy much higher or lower, but that is a separate conversation. Each party must be cautious as they potentially can be missing huge opportunities.

Let’s say a seller would really take $720k for their property, but wants to see if someone is willing to pay $735k, and they list at the $735k amount. If a potential VA buyer is looking at the market, they might have their agent search $720k and lower, causing both the buyer and seller to possibly miss the perfect property.

I certainly do not advocate anyone buying or selling where they are not comfortable, but both buyers and sellers need to be mindful of search patterns. Maybe the buyer should consider a small amount higher than they will spend and have the ability to see a larger group of properties. You also never know what a seller might do when presented with an offer, and the price offered might come down to where the buyer wants to buy. Sellers also need to consider the VA loan limits in areas that have more military transactions so they are not missing potential sales.

Nobody wants to see properties they can’t afford, but I have seen many VA buyers stick to a formula when purchasing and exploring the market. As a client, it is also important to know what the properties are actually closing for. Many clients see a huge range of asking prices and under contract prices, but none of that matters, as the most important number is the closed sales price. Potentially, a pocket of homes may all be listed in a certain price pattern, but they are actually closing at a different price. This price potential can be the military buyer’s price point, but these might have been overlooked due to the higher asking price from the onset.

More Information

As a member of the Hawaii Life Military Specialized Team, I work with many military buyers and sellers. This is in addition to my VA lenders and resources. It is important in a military market such as Hawaii that buyers and sellers are educated about their market. So opportunities are not missed on both sides, clients need to have the correct representation. If you would like to know more, I am happy to help answer any questions on VA loans or potential pricing.

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