Text & Images: CENTURY 21 Hawaiian Style
Well into Summer 2021, the housing market continues to thrive at a rapid pace. And there are no signs of things slowing down.
The median single-family home price in Hawaii is fast approaching a historic $1 million mark. Given the unique landscape of Hawaii and the value of owning property in paradise, this should come as no surprise. After all, the 2021 housing boom is in no way specific to Hawaii. Across the Nation, statistics show that homes have been selling for well above their listing prices. According to CNN Business, bidding wars between buyers in certain parts of the country have even resulted in cumulative bids of $1 million over the asking prices. This has a lot to do with the nature of the markets in which these houses are being listed. Markets that are categorized as "hyper-competitive," such as the one here in Hawaii, are no strangers to all-cash offers and bidding wars driving up final sales prices. These markets are ideal places to purchase property.
Back in 2020 when the pandemic first struck the housing market, the Fed lowered interest rates and created assistance programs to help homebuyers with the sudden changes brought on by the impact of the virus. Thanks to these initiatives and unprecedented Congressional stimulus support, the housing market was quick to bounce back.
Looking back now on the first quarters of 2021, to say that the housing market has "bounced back" is an understatement. The median asking price for a single-family home is accelerating at a pace that has never been seen before. Experts are predicting that the record median single-family home price will soon be surpassed by the end of the year. Hawaii property has always been coveted by domestic and foreign buyers alike. According to Title Guaranty Hawaii, California leads the Nation in Top U.S. Buyers of Hawaii property, bringing in $769.4 million in the first three months of 2021 alone. It may come as a surprise to some to learn that despite the staggering numbers, domestic buyers in California come in second to domestic buyers in Hawaii itself. In fact, Hawaii buyers came in at #1 in the category of Top U.S. Buyers of Hawaii Property from January to March 2021 with a total revenue of $3 billion.
Despite travel restrictions in the early quarters of 2021, foreign buyers are starting to trickle back into the picture as well. Thanks to the lifting of travel mandates making it easier for international travelers to visit the islands, sales from Canadian and Japanese buyers are starting to pick up again.
What does the future hold for the housing market in Hawaii?
It was reported last month in June that the Federal Reserve purchased $40 billion of mortgage bonds, but despite many skeptics predictions of a "housing bubble," it is highly unlikely that the growth we're seeing in the housing market is artificial.
According to Bloomberg, much of this has to do with stricter lending standards leading to fewer long-term risks. Bloomberg reported in March that the mortgage index of mortgage credit availability was a mere 125 in March of 2021. This is compared to 870 in June of 2006. The difference is undeniable.
There's no doubt that the economy is back in full swing, with many states fully open. Just this week, Hawaii entered Tier 5, which allows people to not wear masks while outdoors, gather while masked in larger numbers indoors, and lift even more restrictions on Open Houses and other real estate operations. If things keep moving in this direction, Hawaii will soon be looking at a historic median single-family home price well over $1 million. The upside is that many new developments in the Metro Honolulu and Kaka'ako areas of O'ahu, for example, are making up for the deficit in properties. The specific economic circumstances in this quarter of 2021 is truly creating a mutually beneficial situation for buyers and sellers alike. And with the new developments popping up across O'ahu, prospective homebuyers can look forward to some truly unique and exciting opportunities to own property in Hawaii!