2019 Oahu Mid-Year Market Update

At midyear, the median price for a single-family home was essentially flat over the same time last year, while median condo prices dipped by three percent. This comes as residential real estate sales have slowed, about 10 percent lower than the first half of 2018. As we head into the peak summer sales period, the rate of sales decrease is showing signs of leveling off. If current trends continue, Locations expects median prices to end the year at two percent higher for single-family homes and two percent lower for condos.

Mid-year market update

1031 Exchange: Build your wealth

Now is a great time to make your move

Kahala: What Oahu's #1 luxury neighborhood says about the market overall

Neighborhood spotlight: Kapolei

50^th anniversary: Locations, welcome home

Market softer, but steady

While the number of days from listing to escrow softened in the first half of 2019, homebuyers will still need to be prepared to make a swift offer - especially if a property is priced appropriately, in good condition, or in a desirable neighborhood.

• Homes have been on the market 7 days longer
• Rate of increase for Days on Market is leveling off
• Half of all homes went into escrow in less than 4 weeks 

Still a seller's market

By definition, a balanced market has six months of remaining inventory. Though this measure has increased recently, the market is still tipped in favor of sellers.

• Inventory has increased by nearly one month compared to the same period last year
• Approximately 4 months of remaining inventory

Interest rates to remain low

Falling interest rates offer relief to both homebuyers and sellers.

• In June 2019, the average interest rate was 3.73%
• A year ago, rates were 4.55%
• Freddie Mac has lowered its rate prediction for 2019 to around 4.5 percent to finish the year.

1031 Exchange: Build your wealth

A 1031 exchange is a means of deferring the capital gains taxes that are owed following the sale of an investment property. By using a 1031 exchange to move from one investment property to another (versus a sell-buy), the seller of an investment property can roll the entire proceeds from the sale into the purchase of a new investment property, building more wealth over time. In the above example, Investor A and Investor B both purchased an investment property at the same time. Investor A held on to

their initial property, and it increased in value over time. Investor B, however, traded up to more valuable properties several times over the same time period, using a 1031 exchange to defer capital gains taxes each time. After several years, both Investor A’s and Investor B’s properties increased in value. However, Investor B, who upgraded several times to increasingly more valuable properties, and eventually multiple investment properties, holds a more diversified and valuable real property portfolio than Investor A.

To learn more about how a 1031 exchange can help build wealth, visit LocationsHawaii.com/1031

Now is a great time to make your move

Have you been thinking about buying your first home, moving up or starting to build a real estate portfolio? Current market conditions, such as increased inventory, less competition and more favorable rates of borrowing are benefiting prospective homebuyers.

More choices, more time

Thanks to moderated home prices and increased inventory, homebuyers have more time to consider their options before making an offer this year. Since April, home sales have remained flat, while the number of new listings increased by 5 percent for both single-family homes and condos. As a result, Days on Market showed modest increases, with homes now selling in three to four weeks. Even though inventory is rising, it is not enough to satisfy demand.

More affordable borrowing

Consider the following scenario: Last year interest rates hovered around 4.5 percent, while in June 2019 they were approaching three-year lows of 3.75 percent. For many buyers, this drop in interest rates could mean the difference between owning a single-family home over a condo, being able to afford an extra bedroom, or even being able to enter the market at all. More qualified buyers entering the market place are expected to boost home sales.

What Oahu's #1 luxury neighborhood says about the market overall

Known across the islands and around the world as Oahu’s premier neighborhood, Kahala is a bellwether for luxury enclaves stretching across East Oahu to Hawaii Kai. Historically, luxury home prices lead the overall Oahu market. When median prices rise in luxury neighborhoods like Kahala, prices tend to rise in other neighborhoods within one or two years, typically spreading from the east side of the island out to the west.

Kahala median home prices reached a record high of $2.75 million in 2019—a sign that island-wide home prices will likely continue their moderate rise into 2020. Looking to call Kahala home? Like most Oahu neighborhoods, inventory is growing in Kahala. In fact, there haven’t been this many homes for sale in Kahala in more than a decade. Demand has been strongest for Kahala homes priced below $3 million. To view the latest Locations Luxury listings visit LocationsHawaii.com/Luxury

Neighborhood spotlight: Kapolei

A perennially popular neighborhood, thanks to an abundance of retail and dining establishments, proximity to military and local government jobs, and newer, larger homes, Kapolei attracts everyone from first-time homebuyers, to move-up buyers, and even investors. And while Kapolei may appear more homogenous than other Oahu neighborhoods, with its seven master-planned communities, our Locations Neighborhood Experts know that subtle differences within Kapolei’s neighborhoods can mean big differences in home prices and lifestyle.

That’s why our agents see Kapolei as 30 micro-neighborhoods, each with their own distinct characteristics, and sales and pricing trends. Some of the factors to consider when buying or selling a home in Kapolei include: Homebuilder, lot size, proximity to schools and golf course frontage. To view all of Kapolei and Oahu’s Open Houses download the Locations mobile app at LocationsHawaii.com/mobile

50^th anniversary: Locations, welcome home

The story of Locations began in 1969, in a Nu’uanu apartment, where 24-year-old founder Bill Chee and two partners penned a business plan on a cocktail napkin. Armed with $1,200 and a martini shaker, the young partners shared a vision for creating a different kind of real estate brokerage.

Named for the old adage in real estate, “location, location, location,” Locations was founded on the shared belief that ‘customers rule,’ and access to unparalleled market research and innovation, along with thorough neighborhood expertise, are the means with which to advantage agents and their clients in this highly competitive market.

Together, we work as one team to ensure every one of our clients is poised to make the most informed decisions and smart real estate choices—every step of the way. To all of our past, present and future clients, mahalo for allowing us to welcome you home. To learn more about our history, visit LocationsHawaii.com/50years