COVID-19 Update, Thoughts, Repercussions & Predictions

It’s hard to know where to start. It’s been one of the most difficult and challenging years that most of us would not have ever imagined could even be possible. And we’re all going through it together, in some way shape or form, the pandemic is affecting everyone, emotionally, personally, and financially. Real estate is no different and has been impacted in many ways. Many people have been asking us how the market is and what the impacts have been. There is no simple answer but we wanted to explain what we have seen as a result of COVID-19 and where we go from here.

On Oahu, single family homes hit a new record median price of $839,000, up from $790,000 this time last year. The number of sales are up, and days on market went way down. This shows the demand for single family homes is extremely high right now. The number of listings has also dropped significantly from this time last year, with 20% fewer listings. All of these factors, along with extremely low interest rates are making for a competitive atmosphere. In the past three months, 43% of home sellers received their asking price or higher, compared to 35% this time last year.

Of course, every market and neighborhood reacts and has been impacted differently. While Oahu as a whole has seen strong home sales, East Oahu has seen fewer sales. Here are some stats on the East Oahu market:

For single family homes, there has been a big drop in the number of sales, while the median price has basically stayed the same, down just 0.2%. Condos have seen a bigger drop in number of sales, and also a decrease in median sales price of 5.9%. This could be the result of the East Oahu market potentially being a place for higher end real estate, second homes, and investment properties, and all of these categories are suffering from the far-reaching effects of COVID-19. A main determining factor that has led to slow downs in certain areas has to do with the severe lack of visitors to Hawaii. Visitors which could be intended residents, families looking for a second home, investors, visitors that would be staying in rentals, spending money and contributing to the local economy. This all has a trickle down effect and with unemployment at an all-time high, the community is trying to adapt and keep their heads above water. But if business are closed, renters can’t pay rent, and landlords and homeowners can’t pay their mortgage, they could be forced to sell. We do hope and expect the market to start picking up once the pre-travel testing program starts on October 15 th and more visitors and potential buyers start to return to the islands. For the most part the market is hanging in there and we don’t expect to see any sort of repeat of the crash in 2008 and 2009. While there are challenges and negative impacts in some areas, we still see some positive signs that the market will remain healthy for the most part, very much driven by consistently high demand, low inventory, and low interest rates. But those facing hardship must stay on top, and ahead, of their situation and if selling might be the option for you or someone you know it is best to start the conversation sooner than later so that we can help position you for optimal success. Really sharp, in-depth marketing tools are still getting homes sold. You can view how we market our listings by seeing our new listing on Diamond Head here. And on the flip side of the same coin, it is also now an incredibly opportune time to look at buying a home and locking in an extremely low interest rate. Do not hesitate to reach out to us with any questions or real estate needs you have, we would be more than happy to assist and guide you through this constantly changing market.