Hawaii’s housing market enjoyed a good year in 2015, although a shortage of homes on the market posed a challenge for many homebuyers. Double-digit price increases from a year ago were common in many communities, along with multiple offers on some homes, while the limited inventory helped keep a lid on home sales.
As 2016 begins, many industry experts believe we’re heading towards a more balanced housing market, one in which inventory will gradually increase and sales will climb at a moderate rate. If the forecast holds true, it could be welcome relief for potential homebuyers who may have been frustrated by last year’s heated marketplace and the limited number of homes from which to choose.
The National Association of REALTORS® (NAR®) forecasts home sales nationwide to rise approximately 3 percent in 2016 to 5.45 million units, up from an estimated final tally of 5.3 million units in 2015. The national median existing-home price is expected to rise to around 5 percent in 2016.
According to Lawrence Yun, NAR’s® Chief Economist, the pent-up demand for buying in recent years finally broke out in a meaningful way in 2015, thanks to sustained job growth and rising home values, which gave more homeowners the incentive and the means to sell – a trend that he expects to continue next year.
“Sales activity in 2016 will once again be primarily driven by the ongoing release of more pent-up sellers finally realizing their equity gains and using it towards the down payment on their next home,” Yun said.
Although Yun anticipates further expansion in existing-sales next year, rising mortgage rates and supply constraints are two likely roadblocks that have the potential to slow the pace of sales from being even more robust.
Meanwhile, here in Hawaii more jobs, higher incomes, and favorable interest rates continue to stimulate demand for housing that is unmet by greater supply, according to a report by First Hawaiian Bank. As a result, single-family and condominium sales and prices are up on all islands.
The Oahu single-family residential housing median price reached $700,000 in mid-year, 11 percent above the pre-recession peak. Markets on all Neighbor Islands are also expanding, but have yet to achieve their prior peaks. On all islands, distressed sales are down and Realtor® membership is up – more signs of recovery, according to FHB.
So if you’ve been thinking about buying or selling a home, 2016 may be a good time to make your move. Industry experts are predicting a more balanced housing market with improving home sales. I know you may have questions about the market and the process of buying or selling a home. Please give me a call or send me an e-mail and I’d be happy to answer any of your questions and see if the time is right for you to get into the market.