$1 Million Median Price?!
The Honolulu Board of Realtors recently released June 2017's housing statistics. Once again, low inventory and high demand has driven up the median price for single family homes. Are you surprised? At the same time, according to a recent Star Advertiser article, the median price for single family homes might reach $1 million in the year 2022. First time homebuyers on Oahu are facing an uphill battle. Despite affordable housing projects like 801 South Street, Kapiolani Residence, Ke Kilohana, and A'ali'i, developers can't keep up with the demand for entry level homes. With construction costs being high in Honolulu, some developers might want to wait until our current housing cycle cools down. If you're a first time homebuyer, what can you do? Well, it's important to be flexible and realistic. We all have a dream home. We all have our "must haves." There's nothing wrong with that. However, depending on your mortgage prequalification, your dream home might not be obtainable (just yet). For example, it's not uncommon for people wanting to live in Kaka'ako. However, Kaka'ako can be very expensive. Although a Buyer's dream could be to live in a luxury condo, that Buyer might only be able afford a condo in Makiki or Punchbowl.
Every Buyer is different. In my experience, almost all Buyers enter the housing market. A few decide to wait. The common explanation I get is, "I'll wait until there's more inventory." I don't have a crystal ball, but I don't know when that time will come. For the most part, studies have shown that your first home, probably won't be your last home. If you're ready, it might be beneficial to enter the market. Don't rush. Enjoy what your home has to offer. Let it appreciate in value. If you want to purchase something else, use your first home as a springboard to the next step.