HONOLULU (HawaiiNewsNow) – Rising interest rates are just one factor impacting Hawaii’s real estate market.
The rise has prompted some buyers to act more quickly to get affordable mortgages, and sellers are rethinking their asking prices.
And while the Federal Reserve’s move to raise its benchmark short-term interest rate by three-quarters of a percentage point may quell inflation, it’s also fueling real estate concerns.
Maila Gilbson Bandmann, real estate agent at Coldwell Banker Realty, said:
According to Gibson Bandmann, buyers are scrambling for home loans as mortgage rates have risen from around 4% in January to around 6% now.
That drives up monthly payments.
“If you bought the same type of home or mortgaged $500,000, you would pay $3,000 today versus $2,500 last year,” says Bandmann.
Meanwhile, more home sellers are lowering their asking prices.
Bryn Kaufman, principal broker at Oahu Real Estate, said, “If they don’t get the offer soon, they’ll have to wait until the Federal Reserve realizes it made my property purchase even more expensive. will bring the price down,” he said. .
The number of sellers who offered discounts increased from 234 in February to nearly 600 in August, according to the site.
Meanwhile, the number of properties sold above asking price fell from 535 in May to 303 in August, indicating a decline in the number of offers.
“The same home that might have had 15 offers a year ago may have five with the right pricing,” said Chad Takesue, president of the Honolulu Real Estate Association.
Last month’s sales were also down 25% year-over-year. But 2021 has been a record year, with sales of existing single-family homes and condos soaring his 37%.
“Everybody keeps comparing everything to last year,” said Gibson Bandman. “Last year was really unusual, so what we’re seeing now is more normal behavior. So rates are usually around 6%.”
So what happens next? The president of the Honolulu Real Estate Association said it would depend on inflation.
“If these Fed rate hikes do not keep inflation in check, bond yields will continue to fall and interest rates will rise,” Takesue said.
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