If a buyer could afford to pay $3,000/mo on their mortgage, they could have gotten a mortgage for up to 725k in January of 2022 when rates were about 3%. But today, that same buyer would getting around 6.5% interest, which means their max would be just 475k!! That buyer would be very lucky to find any kind of home on Maui for 475k, even a tiny cottage that needs work. So they’ll most likely need to choose between a small 2 bedroom condo, or stick with renting and hope prices drop. Those higher interest rates are basically costing them about $250,000! (in reality it’s costing the sellers 250k, since the sellers are being forced to lower their prices as less and less buyers can afford to make a reasonable offer. The worst part is that the Fed has made it clear that they plan to continue raising rates just as aggressively, at least until next year. I certainly am not an economist, but I am seriously concerned about the effect this is going to have on home prices and a potential real estate market crash here in Hawaii.
Excuse me for my rant… this topic has been keeping me up at night for months now. The point of that rant is that this is a critical time in the market, and waiting just a few more months to sell your house or condo could potentially mean 250k less cash in your pocket! Now of course this is probably the worst case scenario, and it is certainly possible that home prices stay about the same, or even continue to rise slightly, but that’s a big gamble in my opinion. I don’t like to take huge risks, and I feel like the odds of prices dropping significantly are getting more and more likely everyday.
So you can see the extra advantage you get in today’s market of working with a cash buyer, like Maui Home Buyers; we take on that risk of the market dropping. We buy your house at today’s market value, so you get your equity and cash out while we take the risk on prices dropping the next year, next month, or even next week.
Keep in mind, if you were considering selling your house but don’t really need to then you might want to consider waiting. Particularly if you need to get a mortgage to buy a replacement home, since you would be stuck with the higher rate. The benefit you would have in selling today and getting a new high rate mortgage is that you can always refinance at a lower rate in the future whenever interest rates go back down, as long as you can afford that higher payment until that time comes.
If you’d like to see how much we can offer you to buy your house as is for all cash fast, submit your address and phone number on our main page: https://www.mauihomebuyers.com/ and we’ll give you a call or text to let you know what we can do.