Deciding When To Sell Your House In Hawaii…
Have you been considering selling your condo or home in Hawaii and trying to decide when the best time would be? Can’t decide whether to wait for the economy to pick back up, or to cut your losses and sell now before the housing market gets worse? In this article we will explore everything you need to consider to help you determine whether you should sell now or wait to see if the market gets better. So let’s dive in!
Is Your House An Asset Or A Liability? (AKA Does The Property Cash Flow?)
First we need to determine whether your Hawaii home/condo/townhouse is an asset or a liability. Many people think any home you own is an asset, but that’s not necessarily the case. We see an asset as something that is either producing income (for example a stock that pays you a dividend every month, or if you own a business that generate quarterly profits, or in this case a rental property that cash flows) or something that will produce a return in the future (like a car that you own free and clear that is increasing in value).
A liability costs you money or losses value, for example most cars are liabilities (unless it’s a car that you rent out and make money from, or maybe if you drive for uber and earn income from the vehicle; or in my case, I like to buy cars at the bottom of their depreciation curve, then wait until they are in higher demand and sell them for a small profit – so I get to drive cars that I love without spending a fortune on them).
So in most cases we would consider owning a piece of real estate, even here in Hawaii, as being a liability. Particularly if you have a mortgage and are making monthly payments because in that case you are losing money every month that you own the house.
If you rent your house out and you’re making positive cash flow every month, then the timing on when you sell is much less urgent. However if the house is not rented out that is a completely different story. But if you’re losing money on the property every month, then I would strongly suggest selling it immediately, as soon as possible. Especially in today’s market, because things are not looking optimistic, and there’s a very strong chance prices will be lower in a year from now, so you may lose a lot of money by trying to wait it out and selling your house a little later.
How Much Equity / Cash Would You Get For Your House Today?
Now let’s consider how much equity you have in your Maui real estate. If you could sell your property and walk away with a solid amount of cash proceeds then selling today is almost always a good idea. The reason I believe this is because any financial advisor or experienced stock market or real estate investor will tell you that trying to time the market is never a good idea, and almost never works out. In fact it almost always ends up costing you big time, reason being that we never actually know that we’re at the peak of the market until years later when we can look back.
Just like in 2006, almost no one knew that was the peak of the real estate market. However we can all look back now and clearly see it. I personally have made this mistake. I sold stocks in 2016 thinking that was the peak of the market – this was me trying to time the market. I was waiting for prices to fall so I could buy back in. I thought the market had been strong for far too long, and we were due for a recession. Well I was right about the recession, but I was very very wrong about the timing. The Dow Jones was around 15,500 points when I sold, and it kept going up to over 36,000 points in the coming years; more than double! And this year when the recession finally hit it only fell to around 29,000 points! So even during the recession I would have still been up over 100% profit from when I sold. I know this example is different in many ways, but it’s just my personal anecdotal experience that confirmed to me why you always hear professionals tell you to never attempt to time the market.
If you are upside down or underwater on your Maui real estate that would certainly make the decision to sell immediately much more difficult. However, even if you are upside down and will need to bring cash to close or consider a short sale, it’s usually best to bite the bullet and stop the bleeding now. Selling now and moving on with your life will not only benefit you financially, but emotionally as well. You may not even realize it, but having that debt creates a burden on your mind and body and over time it causes significant stress that will be detrimental to your health if you carry it for too long.
So When Should You Sell Your House In Hawaii??
The bottom line is that if you are considering selling your house, condo, townhome or any other piece of property in Hawaii that is the first sign that the time to sell is right now. Don’t put it off, particularly in an unstable market like today’s. Choosing to wait a few more months could mean the difference between walking away with $100,000 in profits, or breaking even, or possibly even losing $100,000! We’re in a very uncertain time in the Hawaii real estate market; heck, the entire world economy is teetering on the brink of a collapse. Just one misstep and I think the world economy could collapse again, like a repeat of the 2007 crisis.
I’m not saying that is going to happen, in fact I think it’s unlikely. But certainly possible, and the stage is set for things to get really bad if there were a catalyst to trigger a chain of negative events. I think the most likely scenario is that housing prices will continue to cool off and home values will likely drop, but probably not by a whole lot.
I think it’s realistic to expect home values to decrease by between 5-20% over the next 1-2 years as more and more buyers are priced out of the market by the increasing mortgage interest rates we’re seeing as a result of The Chairperson of the Fed, Jerome Powell, choosing to attempt to fight inflation by aggressively raising the federal fund rate (which directly influences the amount your local bank charges for a mortgage to the family wanting to buy your house.
Aside from all of the reasons the economy suggests selling, even if we weren’t in such an unstable and unpredictable market I would still strongly suggest that you sell today. A good analogy is when a friend comes to you and asks if they should break up with their boyfriend or girlfriend. I’d guess that 99% of the time, if they are even just thinking about or considering that maybe it’s time to end the relationship, that usually means they already know it’s what they need to do, but they’re just worried they might be making a mistake or are having trouble taking the leap. The same goes for selling a house! If you are wondering whether you should sell a house, chances are that you should. Trust your intuition. I’ve never had someone tell me they regret selling their house (except for those who sold their homes at the very bottom of the market, around 2011, when prices were way down – but that’s not the case today, it’s no secret that we’re at the top of the market right now in 2022).
How To Sell Your House/Condo/Townhouse Fast For Cash In Hawaii:
If you’ve decided that it’s time to sell and you don’t want to waste any time or take any chance on home prices falling before you close your sale then you should consider selling your home to Maui Home Buyers! We buy houses in Hawaii as is, you don’t need to make any repairs, you don’t need to pay any commissions or fees, do any showings or open houses, pass any inspections, complete complicated paperwork, or deal with any of the other overwhelming demands and headaches that come along with the traditional home selling method.
Just call or text us at 808-359-3121 today and we can make you an all cash offer in under 24 hours and close the sale on the day of your choice and put more cash in your pocket! Plus we can handle any complicated obstacles that might otherwise prevent or delay your home sale. Anything from liens, unpermitted work, uncooperative tenants/squatters, family disputes, tax/bank/HOA default liens or foreclosure, structural damage, termite problems, unruly neighbors, fire/smoke/water/mold/sewage damage, legal trouble, probate/inheritance, divorce, job relocation, need to move to the mainland, have a hoarder house, condominium violations… the list is endless, there is almost no problem that we can’t solve for you, or just walk you through if you prefer.
So what are you waiting for? If you’ve been thinking about selling your house on Maui, Oahu, Kauai or the Big Island of Hawaii then do yourself a favor and call Maui Home Buyers right now to find out how we can make selling your house easier than you ever imagined!