Ka Wai Ola - Office of Hawaiian Affairs, Volume 39, Number 12, 1 December 2022 — Timing Isn't Everything [ARTICLE+ILLUSTRATION]

Timing Isn't Everything

J THE VOICE OF NATIVE t > HAWAIIAN BUSINESS '

By Logan Freitas As a Real Estate Professional, the question I get asked most often is "When is a good time to buy?" The answer is simple but also intimidating: "when you ean afford it." For loeal families, affordability in Hawai'i is quite the oxymoron. But my mission is not to eomplain about what could be, my mission is to find a way. With recession talk on the rise, "timing the market" is ringing onee again. The cost to own in Hawai'i is high, but is the cost of waiting higher? Let's discuss. Did anyone else think the real estate market would crash at the start of the pandemic? Me and my colleagues sure did! This was a strong hypothesis - loss of jobs, stimulus checks, rising costs of goods, etc. All valid reasons for buyers to wait. Ihen, against my prediction, the 2021 market took off like a rocket, with approximately 6o% of homes selling for over the asking price - some hundreds of thousands of dollars over. While that was frustrating for buyers, the silver lining was that interest rates were historically low. Onee again, many buyers decided to wait in hopes the prices would eome down. Fast forward to the present day, and those people were right - there has been a cooling of the market and prices are coming down. Problem

is, with interest rates going up, the cost of waiting continues to pile up. According to historical data provided by the Honolulu Board of Realtors, since 1985 there have been two years in whieh Hawai'i median sales price decreased by more than 5%. In that period, there have been nine such years where the median sales price increased by over 10% (2021 increased a whopping 19.3%). Let's not sugarcoat it - the current market is rough! High interest rates are really affecting purchasing power. Inventory is still low as potential sellers are holding off from listing. So, is there any good news? Always. Fewer buyers mean fewer bidding wars. The ehanee of getting good homes at asking price, or even a little helow, is a real possibility that we haven't seen in a few years. Creativity ean win the day - work with a professional team who will get creative with things like financing strategy and "rate buy-downs." I truly believe there is a time for everyone to succeed in this market. Will prices eome down? Maybe. Will rates go up? Maybe. We cannot control what will happen - only the market ean do that. And the market waits for no one. ■

CENTURY 21 Logan Freitas is a Realtor with Century 2 1 iProperties Hawaii. He is state certified and specializes in buying, selling and development. His passion is to help loeah afford Hawai'i. Contact him at loganfreitasi@gmail.com, 808.284.5585 or IG: @keepinghawaiihome.