Everyone is asking what we expect to see in the housing market this fall. Will home prices rise? Flatten? Fall? Will bidding wars continue and will buyer demand remain strong? According to the National Association of Realtors, housing inventories are increasing across the nation. Lawrence Yun, NAR’s chief economist, predicts that the increase of inventory (7.3% increase in July over June), will lessen the intensity of multiple offers, but does a lesser intensity mean that it won’t still be intense? I suppose it depends on how you define intense, but from a Buyer’s perspective, whether you are competing with one or ten offers, you’re still competing. Isn’t that still somewhat intense? Granted, the gap between demand and supply may be narrowing a bit, but there is still a gap. A big gap! Especially in Hawaii, where land is scarce and demand is high.
Interest Rates Still Low
We often do see a slowing of pace in the fall as kids head back to school. Historically, spring and summer are usually our most robust seasons. But, given the limited supply of homes and record low mortgage rates, just how much of a slow down we’ll see this fall remains to be seen. Since many buyers fear missing out on a once-in-a-lifetime opportunity to secure a mortgage interest rate below 3%, we don’t think buyers are quite ready to give up their idea of buying a piece of paradise. At least not now, when rates remain historically low.
Less Inventory on the Market
We have been experiencing some contraction in the market, but fewer sales does not necessarily equate to lower pricing. It just means there are fewer transactions. Less inventory. So, we expect that desirable properties in good neighborhoods will still generate a lot of interest and likely multiple offers.
Many Other Variables
Of course, there are too many wild cards, i.e., the delta variant, tightening in restrictions, and disruptions in consumer behavior to accurately predict what the housing market has in store for us this fall. After all, none of us predicted the velocity of the market and the escalation of home prices we’ve experienced over the last year and a half, so suffice it to say that we are all a little gun shy when it comes to predictions. There are just too many variables.
There is one variable that is a constant, though. Hawaii. This place, its culture, and its people are unlike any other. And, that’s reason enough for us to believe that demand will remain high this fall and into the future.