Have you been hearing about the falling home prices on the news and wandering how this might be effecting your Maui home, condo or townhome’s value? In this article we’ll discuss the what’s really happening with home values nationally, as well as right here in Hawaii.
How Much Have Home Values Declined?
It seems like every time you turn on the news now the story has changed. It’s no longer stories about bidding wars and homes selling for record prices. Now it seems like all we hear about is how much home prices are falling. This article by sparkrental.com shows which markets have really fallen and by how much. One of the biggest drops was in Shelton, WA with home prices dropping by 6.31%.
Another popular article found here from CNBC explains how much equity most homeowners have lost recently. While there are certainly markets that are reported falling home prices, I personally have not seen much indication of prices dropping in Hawaii. There are sub-markets that have seen decreases in values, such as certain condo complexes on Maui that were over valued and have settled back down to reality. But for the most part the market seems to have cooled significantly, but values have remained pretty steady. I might describe home prices as “settling down”, but I wouldn’t say that home prices on Maui have dropped or fallen significantly.
That being said, it’s not crazy to think that values may come down over the next year. With Hawaii home mortgage rates being more than double what they were costing a year ago, the real problem in my opinion is affordability. Sure, inflation has effected the cost of most things, but I believe we have not been compensated enough in terms of wage growth to cover the lower value of the dollar.
Another factor to consider is that Hawaii does tend to follow behind the mainland real estate market by 6-12 months. This suggests the possibility that maybe we just haven’t seen prices fall much yet because we are lagging behind, and there is a chance that we are on the verge of seeing our property values decline.
Furthermore, the Federal Reserve seems to have plans of continuing to increase interest rates for the foreseeable future. It’s not unreasonable to think that a couple more interest rate increases could lead to the straw that breaks the camels back and finally causes home prices to fall. But no one has a crystal ball, so for that we’ll just have to wait and see.
Other’s may have different opinions from us, such as houzeo.com that reports home prices in Hawaii having already fallen over 3.2%. But it all depends on what data you’re looking at. Again, there are certainly areas where prices have fallen but I think that in general, property values in Hawaii have remained pretty steady.
Need To Sell Your Home Or Condo On Maui?
If you’re considering selling be sure to call Maui Home Buyers before listing your home on the MLS with a realtor. We’ll make you an offer, usually within 24 hours, to buy your property for all cash, completely as-is, with no contingencies, no realtors commissions or other fees, and we’ll close on your timeline!