Text: CENTURY 21 Hawaiian Style / Statistics & Data: Honolulu Board of Realtors (HBR); Hawaii News Now
There are many reasons to consider taking the leap to home ownership. If you're currently renting, you may not be aware of the benefits.
Since the start of 2021, we have seen historic rises in pricing for Hawaii real estate, particularly on the island of O'ahu. With median single-family homes coming in at $950,000 in March, the Hawaii real estate market saw a new record; a 17.3% increase from the same time last year.
Luxury home sales saw an even bigger increase, with a whopping 106% increase in sales in the first quarter of 2021 alone! These statistics encapsulate both single-family luxury homes and luxury condominiums in Honolulu.
We all recall the depression that hit the market shortly after the first quarter of 2020 when the pandemic was at its height. Agencies reported declines in sales of up to 70% as compared to 2019. But things have changed in 2021, thanks in huge part to lifted travel restrictions, more widespread vaccination efforts, and historically low mortgage rates. This has created a historic demand for inventory, with both local and international buyers snatching up properties at record rates. The average single-family home sat on the market before selling for just 9 days in March, with condominiums not far behind at just 14 days on market.
The real estate market is booming going into the third quarter of 2021, and all signs point to an increase in this trend. With remote working, more people looking into investing into real estate, and other factors driving demand for properties in Hawaii, the inventory has been scarce. New developments in Honolulu's metropolitan areas such as Kaka'ako, East O'ahu, as well as listings in Kahala and Diamond Head are helping to fill that demand.
This is no doubt a historic and exciting time in Hawaii real estate, which creates unique opportunities for first-time home buyers and investors alike.
Many families have the mistaken belief that because of the pandemic's impact on employment and other related factors that purchasing a property should be the last thing on their minds. Taking advantage of the economic situation right now may place you in the best position possible for taking the leap from renting to ownership.
Owning a property, versus renting, has a multitude of benefits.
If you haven't made the move from renting to owning yet, now might be the best time!
Here are some beneficial factors to consider:
HOME EQUITY: We've all heard the saying that renting is essentially paying someone else's mortgage. That statement couldn't be more true, both literally and figuratively. Every time you pay your rent each month, that payment is likely going towards your landlord's mortgage. As a renter, no matter what you pay in rent each month, you ultimately walk away with nothing substantial in terms of ownership. With ownership, your mortgage payments go towards the equity in your home. You can pay rent forever and not own the property you're living in. This doesn't even take into account inflation, which inevitably happens. Put your hard-earned money to the best use by investing in the ownership of your own property. With each payment, you are getting one step closer to owning the place you're living in!
TAX BENEFITS: As a renter, it's likely that you didn't know that there are tax benefits that come with home ownership! As a homeowner, the interest on your mortgage and property taxes can be deducted from your taxes. As a renter, no such deduction privileges are available to you.
SECURITY: When we think of home, we think of place where we, and our families can feel safe and secure. As a renter, it may not be apparent that you're not as secure as you think. For example, you are beholden to the terms your landlord sets in your lease, which may or may not include a clause which gives your landlord the right to raise your rent. Even fixed rental agreements are often limited. As a home-owner, it's always good to aim for a fixed-rate mortgage, which will give you th freedom, flexibility, and security of knowing that the rate of your mortgage won't go up! What's more, you'll have peace of mind knowing that the principal and interest will also stay the same for the duration of your loan.
ECONOMIC FREEDOM: This one takes some long-term thinking. Sure, renting may seem like a cheaper option on its face, but that won't always be the case with rising costs of living. You might say, there's less to worry about with renting and less maintenance than there would be with a property you owned outright, but that's a myth. Over time, home ownership always pays more long-term dividends than renting. As paradoxical as it sounds, you will save more money in the long run. Think of all the things you can do with that saved money! Perhaps invest in a second home at some point?
NO HIDDEN COSTS: As a renter, you might think that you have less of a headache in terms of fees and maintenance, but the truth is, over time, you are paying hidden fees. For example, as a long-term renter, you've likely moved several times over the course of your lifetime, incurring moving expenses among other things. In addition, you are responsible for cleaning and restoration fees if necessary, upon vacating. This is money that you could have used to invest in your own property!
There are more benefits to home ownership that can be listed here.
Take it from the industry leaders in Hawaii real estate:
CENTURY 21 Hawaiian Style has been putting happy homeowners in new properties for over 31 years! Take advantage of the unique economic opportunities and make the leap from renting to owning today.
Don't delay, contact us today!