Hawaii is the real estate market about to crash? If you're like most Americans today
you may be asking that question, is the real estate market about
the crash or are we in a bubble? Aloha I'm Stephen Proski with Real Estate
Kailua Kona and Corcoran Pacific Properties welcome back to our YouTube channel If this is
your first time here I would recommend that you hit the subscribe button below because I am
posting videos about the Kailua Kona area each and every Thursday and i think
you don't want to miss anything. So let's deal with the elephant in
the room. Are we in a housing bubble and is the market going to
crash that's the big question. So the housing market has been extremely
strong over the past several years fueled by low interest rates and a sizable
number of Americans desire to purchase a home. A contributing factor was the pandemic and the
availability of people to work from their home Unlike in 2006 when the housing market crashed there were many contributing factors
to that situation that are not current today Nope in 2006 the real estate market was being
overbuilt with new construction and it was so so easy to obtain financing to purchase a home.
If you could fog a mirror you probably could get a mortgage back then, I'm telling you.
It was
not the real estate market that caused the crash in 2006 it was the mortgage industry funding
risky loans with little to no down payments. Having been through that market
myself I can honestly tell you we are not in that same situation as back in
2006. According to Lawrence Yun the National Association of Realtors Chief Economist
this is not a bubble and this isn't 2006. What's the difference between then and now? "Lending" Yes credit remains tight and
the lenders aren't issuing risky loans. Today's market boils down to simple economic
principles, principles of Supply and Demand.
With a sharp increase of interest rates
over the last six months coupled with rising inflation this definitely has slowed
our real estate market down here in Kailua Kona and the rest of the country as well but
it has not stopped our real estate market.
No, properties continue to sell and yes they
may be sitting on the market a little bit longer than six months ago but, they are still
selling. Prices as we all know were rising faster than anyone could anticipate because
the demand was high and the inventory was low Again the basic economic principles of Supply
and Demand. This is not the first time our real estate market has gone through an adjustment
and it's probably not going to be our last. The National Association of Realtors is still
predicting price growth between 3 and 8 1/2 % in 2022 for the entire country. That's
lower than last year's incredible growth but, it's still growth. Yes Kailua Kona is a
destination location and people still want to live where everyone else gets to vacation Yes people still buy and sell real
estate here on the Big Island. It's still moving…..
We have little to no new
construction and a limited supply of housing. The medium sales price for a single family home
in July 2021 was $900 000 and condo sales were around $420,000 dollars on average. Median
sale prices in July 2022 for single family homes jumped up to 1.3 million dollars in
Kona and condos rose to $515,000 dollars. Prices are climbing they're
not dropping. In a few months the mainland will be
experiencing cold weather again, thus bringing winter visitors back and more than likely demand for housing
in Kailua Kona will increase And what about our international buyers?
We have not seen that population here since the beginning of the pandemic.
What
will happen when they return to the scene.? Does make you think about that
for a little bit doesn't…. Yes the real estate market is changing.
In the past several years we were very very strong sellers market, so maybe the tide
will turn and will shift to a buyer's market. I don't have a crystal ball so let's
all pause for a minute here in Kona and see what the future holds with our real
estate market there's no need to freak out and put the brakes on. If you're a buyer buy. If you're a seller sell. In my 26 years of selling real estate
people buy and sell in all kinds of market and this will probably continue today whether
you think we're in a housing bubble or not If you like this video and want to see
more about the Kailua Kona area please hit the subscribe button below and if you have any
questions or comments please post them as well Mahalo till next time Aloha!.
