There is so much talk about how the market is booming. Well, it does depend on what you are selling or wanting to buy. It is very true that the single-family home market is booming right now. There is a high demand for single-family homes in many neighborhoods across the state but there is a threshold on price for the local market and turnkey for the luxury market.
The frenzy is there for those desired properties, especially with these crazy low-interest rates. But with the lack of inventory, many buyers are competing for the small number of homes available for sale and therefore we don’t have an influx of sales because there isn’t as much to sell. People are also priced sensitive and wanting little to no work needed on properties because construction prices have shot up and contractors are slammed with business. They are not only working on new products and renovations to sell but they now have a lot of owner-occupied residents wanting to fix up their own homes versus selling their home and finding another one. This makes homes needing major repairs and renovations for the professional investor versus the owner-occupied. You will find homes sitting on the market and if you are wondering why, well they usually have something wrong with them.
- They may be way overpriced and the seller is not willing to reduce the price.
- The floor plan is very awkward and hard to work with, needing major renovations to fix.
- The lot size and/or interior square footage is very small and has very little room for improvements to increase the value of the home.
- The location or neighborhood isn’t ideal at these exorbitant prices.
- Limited parking. Needing at least two stalls on the property or available street parking is usually desired.
- Too many stairs. Surprisingly, there are many homes with two or more flights of stairs just to get from the garage or street to the front door. Even if the buyer is healthy and more than capable of a built-in exercise routine, their guests may not be so fortunate. If your parents or grandparents can’t visit you, it might be a deal-breaker.
'A'ali'i at Ward Village
When it comes to condos, the market and demand aren't as aggressive. Here are some of the reasons condos are lagging behind the single-family home market and inventory is starting to increase in some instances.
- Short-term rentals have become illegal in many instances and enforcement more strict due to Bill 89 and new city ordinances. This led to many investment properties hitting the market even before COVID hit.
- COVID shut down all travel and tourists stopped visiting Hawai’i. All legal short-term rentals went from a booming year being sold out on the daily to vacancies across the board. Even shutdowns of hotels. This cut monthly rental rates down to the going rate for long-term rentals and the new rental income often can’t support the monthly expenses of the property. With these deficits, we have more trying to sell their condos.
- COVID also changed many people’s preferences on their ideal home and living space. (Check out our previous blog on new buyer preferences, Click Here) Pre-COVID we were trending to smaller homes and condos with more amenities to share versus own individually. But now that amenities are closed off or limited to the condo residents and people are sheltering in place wanting to minimize contact, families want their own interior and outdoor spaces. Hence dumping their condos and flocking back to houses.
Koula at Ward Village
With this said, if a condo is in your budget and what you are looking for, maybe now is a perfect time to buy! Especially if you are looking for a mid-range to a luxury two-bedroom condo. The lower price points, under or hovering around $400,000 FS are moving pretty quickly, especially if it has:
- At least one parking stall
- At least one bedroom but studios are selling as well
- Washer/dryer in unit
- Not a 2-4 story walk-up type building
- Move-in condition
If you are in a smaller condo-like above and wanting to find a larger two-bedroom, this could be a great time to make the move. Please contact us today and we can help evaluate your specific situation and help you come up with a plan that works for you!
Check out the current Honolulu Board of Realtors, Oahu October Market Update for more details, but below are the main highlights we focus on monthly. (Click Here)
Final note something to consider as we move into this new era and uncharted territory. Exclusivity, Privacy, Space, and Wellness is becoming the new luxury. Continue to follow us and our lifestyle brand, Smart Living where you will learn more about sustainability and wellness as it relates to your home and real estate.