By Walt Harvey (R), ABR, CRS, GRI, SRES, ePRO
Real estate prices here on Oahu have increased at a blistering rate for the last few years. High demand, fueled by low interest rates and a strengthening economy have outpaced the limited supply of available homes and condos. Almost every home that comes on the market is priced higher than the last comparable sale. With very few homes to choose from, buyers must pay the asking price, or more, or face even higher prices with the next suitable property. Caution! The market may be changing!
Factors affecting the real estate market can be very subtle and often catch sellers and inexperienced agents by surprise. With prices at all time highs, a slight increase in interest rates, will eliminate buyers. Qualified buyers may become discouraged with the multiple offer/bidding process and will simply choose to wait and see if conditions change.
A factor that many real estate professionals watch closely is the available inventory of homes for sale and the number of days it takes to sell them. When inventory rises, buyers have more choices. The time a home is on the market before selling starts to increase and buyers can take more time to consider their buying decision.
Increases in available inventory and days on market can signal a change in the market that takes two to three months to show up in the media. Why? The sales figures quoted in the media in July are from sales that closed escrow in June and those sales actually took place in March or April or May.
So if you’re thinking of selling and the media is reporting record prices month after month, why not keep pushing the limit? With so many agents competing for so few listings, it’s easy to find an agent that will list your home at almost any price, regardless of the comparable sales. If you’re just testing the market and don’t really need to sell, this strategy’s fine. Let an agent advertise and hold open houses and if your home doesn’t sell you’ll stay put. When you truly need to sell, experience trumps enthusiasm. Don’t let an agent convince you they can get you more than all the other agents you’ve talked with just so you’ll pick them.
Walt Harvey is a real estate broker with East Oahu Realty and works with his wife Arla. They specialize in residential, commercial and investment real estate and can be reached on their website: www.coastalhawaii.com. Have a real estate question? E-mail us at walt@coastalhawaii.com or call 375-8959.
Published in Small Business Hawaii News, August 2004