Lies, Damned Lies, and Statistics

Have you heard the quote, “There are three kinds of lies: Lies, Damned Lies, and Statistics?” The sentiment is appropriate for today’s market because statistics are deceiving. If you have been watching the real estate market in Hawaii, you may be wondering what’s going on. After all, the media is full of news about the shifting real estate market and the slowing of sales. And, it’s true. Sales have slowed. But, here’s the thing, on Oahu we still have very limited inventory. And, good properties are selling fast, and in some cases, still receiving multiple offers.

Is This a Slow Market?

All real estate is local and each property must be analyzed on multiple factors — location, condition, price point, upgrades, Seller motivation, etc., etc. Recently, my clients submitted an offer on an older home in a popular neighborhood in East Honolulu. The property was priced at $1.3 million and received multiple offers. I can’t disclose the final price as it is still in escrow, but suffice it to say that the competition was intense for my Buyer clients. Thankfully, they secured the property.

In the last two weeks, I know of three other properties that have generated multiple offers. In each instance, there were over asking offers on the table and several cash offers. Hmmmm……and this is a slow market?

There is no doubt that the pace of the market in general has slowed, but there is also no doubt that Hawaii has limited land, few new building starts, and very low inventory. Oh, and very strong appeal. So, what does it all mean? It means that you can’t read headlines and draw a fast conclusion. It means you have to do your homework. And, you need to look at each subset of the market. You also have to consider your big picture.

What is Your Big Picture?

Do you envision yourself staying in your home over the next 5-7 years? If so, you’ll be fine even if prices do go down as the Hawaii market has a very good historical track record. It always goes up. Are you qualified to buy even at today’s higher interest rates? If so, you may be missing out on opportunity. You may have a better chance to negotiate now, and regardless, if your needs dictate a new home, what’s most important? Again, what’s your big picture?

There are also lots of different mortgage vehicles for you to consider. You can do a 2-1 buy down, an adjustable rate, or just buy at a fixed rate that is still below the historical average. You can always refinance later. Ask yourself if you want or need to move. Do you want to buy now? If you do, trust that there is a way that you can make it happen. Talk to a trusted Realtor, a good lender, and do your research. Local research.

Every Market is Different

Remember, the media loves to hypes things up to get your attention. Ignore the headlines. For example, a news headline might state, “Housing Conditions Worsen.” What does that really mean? Perhaps it just means that the home prices will grow at a slower rate than the past frenzied cycle we just experienced. Maybe it just means fewer sales, but not lower prices. Again, all real estate is local and Hawaii is not the mainland. Each island is different and each neighborhood is different. So, is each house. Each Seller.

You’re different, too. What is right for one Buyer or Seller may not be right for you. When I talk to my clients, we go into depth about their dreams, goals, and vision for the future. We talk about their overall financial strategy and their end game. Your decision to buy or sell real estate is personal. And, your personal choices, goals and decisions deserve personal and proper attention, evaluation,  and analysis.

Don’t get me wrong, statistics are important and they are useful for making generalizations, but accepting statistics you read about in the headlines won’t help you make an informed decision. More importantly, you need to remember that there is no statistic that teaches us how to lead meaningful lives. So, the next time you catch yourself relying heavily on statistics, ask yourself if the statistics are keeping you from creating your most meaningful life. Your best life. Now.