Is the Market Heating Up?

Are you wondering about the state of today’s real estate market? If you are thinking of selling, you may be wondering if prices are going down. Is it a good time for you to sell or should you wait? Or, if you are thinking about buying, you might be wondering if you will be paying too much if you jump in now. Should you wait and buy later? And of course, you’re probably wondering about interest rates, inventory, and the overall timing and impact of your real estate decisions.

Many people express confusion about today’s market because there is so much conflicting information out there. Who do you believe and what do you believe? I’m not here to analyze the market or to advise you about your personal decision-making, but I do want to share with you what I have seen in recent weeks. After all, personal experience is the best teacher. When you experience something firsthand, it becomes more than just a theory, an idea or just another headline in the media. And, this is what I have experienced recently. Properties that have been languishing on the market are now going under contract.

What’s Happening Lately?

In the last two weeks, I’ve personally had two listings that have been very slow to sell go into escrow. And, at healthy prices. I’ve also received multiple offers over asking on one listing,  and have been in a bidding war on another. And, in multiple markets. From Ewa Beach to Metro Honolulu to Hawaii Kai, properties are selling. Granted, a handful of experiences don’t necessarily mean the market is heating up, but the way we experience things with our senses does tell a story. And, the way I have been experiencing things lately tells me that things are heating up in our market. My senses are on high alert!

I’ve been hearing the personal experiences of others, too, and many are experiencing the same thing — more activity, more contracts, more interest. Listings that were stagnant at the end of the last quarter and the beginning of the first, are suddenly getting one or two offers. Many buyers are also back in full swing now that they’ve acclimated to today’s mortgage interest rates, which are hovering around 6%. Some Buyers are opting for adjustable-rate mortgages or getting a lower rate through a buy-down as a seller concession. Either way, buyers are back and mortgage applications are up. So are escrows. And, Spring is just around the corner. A time that usually sees increased activity in the market.

Will it Continue to Heat Up?

Experience is a good teacher, but I know that in spite of my recent experiences, the experiences of others, and my own intuition, it’s incredibly difficult to predict the real estate market effectively. There are just too many fluctuating variables. So, is it heating up? Compared to the last couple of months, the answer is a resounding “yes.” Will it continue to heat up? I don’t know, but experience has taught me that real estate remains a very sound investment. And, for good reason. Prices always go up over time. All you have to do is look at the history of housing in Hawaii to predict fairly accurately that prices will rise. In the year 2000, the median for a single-family home on Oahu was $295,000. In 2010, it was $592,750, more than double. And, in 2022 it was $1,105,000. Hmmm….almost double again.

I have no doubt that the real estate market will heat up and that prices in Hawaii will go up. If not now, soon enough. I know this. And, it’s not because my intuition tells me this and it’s not because my experience (despite being the great teacher that it is), tells me so. It’s because history tells me so. Prices will go up because it’s what they’ve always done.