Home sales in West Hawaii have been brisk this year with double digit increases on the amount of sales in South Kohala and North Kona in both January and February and in the first portion of March. LUVA Real Estate agents are seeing that sellers are enjoying strong demand for their homes in 2020. However, there are a few market influences right now that you should know about if you are considering selling your home in the next few months.
The good news is that mortgage interest rates have fallen to their lowest in history. This should have an impact on buyers who can now buy “more home” than just a few weeks ago. Local mortgage professionals said the rates could even dip a bit lower in the coming weeks and months.
The cautionary news is the Corona Virus and its effects on the housing market and the global uncertainty that it is causing, including a U.S. stock market correction no one could have seen coming. While much of the news has been about the effect on various markets, it is also having an impact on people’s willingness to fly to Hawaii to look at homes on the market.
A few homes on the market, in response to snow birds leaving the island as we approach mid-March, are seeing price cuts to catch the would be homebuyers who may still be here looking for deals. The stock market is tied to the retirement plans of people considering a second home or a move to Hawaii where some may have planned on using their 401k to buy a home or to retire on once they get to the island.
News on the Street:
The National Association of Realtors (NAR): “At the very least, the coronavirus could cause some people to put home sales on hold.” When there’s fear in the world, we see lower mortgage interest rates as investors flee stocks for the safety of U.S. bonds. This connection should be considered when making real estate decisions. According to the National Association of Home Builders (NAHB): “The Fed’s action was expected but perhaps not to this degree and timing. And the policy change was consistent with recent declines for interest rates in the bond market. These declines should push mortgage interest rates closer to a low 3% average for the 30-year fixed rate mortgage.”
According to an article by real estate news site Curbed, “If the current market fluctuations and fear of the virus impact is prolonged and induces even a minor recession, it could put a damper on demand—which would actually be welcome for buyers in particularly competitive markets. Still, don’t expect home prices to drop. It would likely just slow down the pace at which they are rising.”
What does all this mean for you if you are considering selling your home in West Hawaii?
Lack of Inventory and High Demand Will Persist
Historically low inventory, a humming economy, and rock-bottom mortgage rates are setting the stage for a highly competitive homebuying season. Beyond what is happening in the global economy, people are still interested in buying property in West Hawaii and since there is a lack of construction of new homes on a level to keep up with demand, in the long term, homes here will still be in high demand.
Pricing is Key
If you have to sell your home before the Corona virus fears diminish and the stock market finds where it will settle, you will need to work carefully with a REALTOR in finding a strategy for competitive pricing and marketing. It is in times like these that working with an informed and educated real estate professional can make all the difference in the world. We encourage you to contact us at LUVA Real Estate if you would like to talk about a solid strategy for selling.