Why the second half of 2019 holds opportunities for homebuyers and sellers
In its 2019 Mid-Year Market Update, Locations experts anticipate moderated home prices, rising inventory and falling interest rates to continue throughout the remainder of the year — presenting favorable conditions for homebuyers and sellers.
After years of rising prices, single-family home and condominium median prices have held steady compared to midway through 2018. For the six-month period ending in June 2019, the median price for a single-family home was essentially flat compared to last year at $779,000, while the median condo price fell by 3 percent to $418,000.
If current trends continue, Locations predicts median prices will end the year at just 2 percent higher for single-family homes and two percent lower for condos, over 2018.
“It’s still a robust market,” said John Connelley, principal broker for Locations.
“Although home sales are below last year, the rate of sales decrease is flattening, and demand is strong.”
At midyear, single-family home sales are 4 percent below this time last year and condo sales are down 10 percent.
More choices, less buyer competition
Several market conditions are working in favor of homebuyers this summer and are likely to continue into the fall. While housing inventory is still well below what’s needed to meet current demand, there are 14 percent more single-family homes and 16 percent more condos for sale than a year ago.
As a result of more homes to choose from, competition among homebuyers has eased. One measure of buyer demand, known as “bid ups,” measures the percent of homes that are sold for above the asking price in a competitive bidding situation. Over the past six months, about one in five single-family homes was bid up over the asking price, and about 13 percent of condos were bid-up—a decrease of 29 percent and 37 percent, respectively.
Another indicator of demand, Days on Market, which measures the number of days from listing to offer acceptance, is also softening, but the rate of increase is beginning to level off. So far this year, single-family homes have been on the market for a median of seven days longer than last year at this time, and condos are on the market for eight days longer — giving homebuyers an extra week to shop around this summer.
Still, half of all single-family homes and condos are going into escrow in less than four weeks, so while homebuyers may have more wiggle room, they will still need to be prepared to act swiftly and decisively.
Lower interest rates than last year
“We’re seeing a return to near historically low interest rates,” said Connelley, noting that the average interest rate in June was 3.73 percent, compared to 4.55 percent a year ago.
“Lower rates are favorable for buyers and sellers. For homebuyers, lower rates mean lower monthly payments or perhaps an extra bedroom. For sellers, lower rates mean a larger pool of qualified buyers who can compete for their home,” he added.
If mortgage-giant Freddie Mac’s rate prediction for the rest of the year holds true, buyers can expect rates to remain low, at around 4 percent. Many economists agree that rates will likely stay at about 4.5 percent in 2020, and some economists project rates will come down even more this fall.
With steady prices, more choices and lower rates for borrowing, there are still plenty of opportunities for home-buyers and sellers in 2019. Be sure to consult with a knowledgeable Realtor, as every neighborhood — and micro-neighborhood —behaves differently.
To read Locations’ complete 2019 Midyear Market Report, visit Locations Hawaii.com/midyear2019.
WHAT’S FOR SALE AT THE MEDIAN PRICE?
Single-family home
For sale at $779,000
94-219 Pulelo Place, Waipahu
MLS: 201919761
Condominium unit
Just sold for $420,000,
Lanikuhana Patio Homes
94-409 Lanikuhana Place,
No. 1077, Mililani
MLS: 201915486
