O'ahu Market Update - July 2023

Even though home prices and mortgage interest rates have not dropped, buyers and sellers are still coming together to buy and sell homes. The largest concentration of home sales on O'ahu are between $800,000 and $1 million for homes and $300,00 to $600,000 for condos. The competition for homes and condos in those price ranges is so strong that buyers are paying higher than or at asking. Price ranges where buyers are getting the largest discount are below $450,000 for homes and below $150,000 for condos. The $1,000,000 to $1,499,000 has also been one where buyers have negotiated a lower price, with homes closing in July at 98.5% of the asking price and 96.8% for condos. 

That said, the market is nowhere near where it was just a year ago before a jump in interest rates. Both home and condo sales are down compared to the same time last year (28.2% and 18.5% respectively). The average price for a home came in at $1,270,421 for homes and $617,683 for condos. That's a drop of 4.4% for homes and an increase of 4.5% for condos. Since those increases are annualized, that level of change is minimal.

The lack of new homes for sale coming on to the market has minimized the effect of dropping demand for housing. Last month, properties listed for sale were down by 28.8% for homes and 15.4% for condos. This dynamic has stabilized the market, causing stability in home values. It has also slowed down the speed of the market, allowing buyers more time to make their decision on a specific property. The homes and condos that sold last month were on the market for a median timeframe of 16 days before they accepted an offer.

To summarize, the market has slowed from the feeding frenzy of 2021 and 2022. Buyers have a bit more time to make a decision on buying the right home for them and sellers are still getting a price close to their asking price.

Read the full report from the Honolulu Board of REALTORS® here.

Grants for First-Time & Low Income Homebuyers

Wouldn’t it be nice to receive some free money so you can buy a home? Federal, state, and local governments, plus housing foundations and charitable organizations are all great resources that provide grants to homebuyers in need of help.

Why help first-timers? As they tend to be young and still building credit and savings, first-time homebuyers may take years to save enough for a down payment and qualify for a mortgage. The sooner they can buy a home, the sooner they can begin gaining equity and accumulating wealth through real estate. New homeowners are good for their neighborhoods—they provide more tax revenue, and they support local shops and services.

Why help low-income households? Housing prices have shot up so high that many families, whose incomes have not kept up with inflation, also have trouble saving for a down payment on a home.

The National Homebuyers’ Fund awards housing grants up to 5% of a home’s purchase price, either in the form of down payment or closing costs assistance. You don’t have to be a first-time homebuyer to qualify, and credit scores and debt-to-income ratios are flexible whether you’re applying for a conventional loan or a government guaranteed loan through FHA, VA or USDA. Another great source is Governmentgrants.us, which offers a step-by-step application for homebuying assistance.

The biggest benefit is that grants don’t have to be repaid. Housing grants are typically obtained through your mortgage lender. You can also search the Internet for homebuying grants in your city or state.

3 Bathroom Remodeling Mistakes to Avoid

Remodeling a bathroom is nearly always more expensive than you expect, but costs can really escalate if you make any errors in space planning, new fixture selection, or quality of construction. Here are three steps you should carefully consider.

Planning the work

Your remodeling plans should solve existing issues, such as those regarding functionality, accessibility, and ultimately, your property’s value. Plans should meet current building and safety codes and improve the home’s attractiveness.

Budgeting

Some homeowners underestimate the costs of renovations and then cut corners to fit an unrealistic budget. The Family Handyman advises that the money you save by doing the work yourself can come back to bite you. It’s too easy for DIYers to buy the wrong sized drainage piping or install them at the wrong slope for proper drainage, causing frequent clogs and leaks. It’s also common to skip installing ventilation fans, but they’re important to help prevent mold, mildew, and household odors. If you’re not a licensed plumber or electrician or trained carpenter, you should budget for professional help.

Layout changes

According to Architectural Digest, the most expensive part of a bathroom remodel is changing your bathroom layout, including the labor required to remove, demolish, and dispose of current fixtures and surfaces. Tearing up floors to relocate plumbing pipes and changing the electrical wiring for new light fixtures and outlets is expensive. If the interior design changes you want to make truly add value to the home, go ahead. Otherwise, stick to improving surfaces and fixtures only.