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  • Ryan O.

Reflection


In 2008, I was in college during the subprime mortgage crisis. I recall being in class and my professor telling us there might be budget cuts and that our economy was going to have a significant negative impact. I was on tract to graduate on time, but suddenly became worried that I might not get my classes for the upcoming semester.


Sometimes ignornance is bliss. I was too old to be naive, but also too young to fully comprehend what was really occurring. However, I knew the sky was falling.


My brother, a finance major, watched Bloomberg News in the morning. Since I would often drop him off at the bus stop, I would get up to watch with him. I had recently opened a brokerage account and my brother was showing me first hand on what the market was doing.


Fast forward 12-13 years... Our COVID-economy feels oh-so similar. Hawaii's unemployment rate hit 22.6% this past May. Let that sink in for a bit -- that's over one out of five people unemployed. Although the economy is reopening, there has been double digit new COVID-19 cases recently. Thankfully, Hawaii has done well to control the pandemic.


I am always monitoring data from the Honolulu Board of Realtors to share with my clients. In May 2008 -- the thick of the housing crisis, there was a 25% decrease in single family and condo sales from May 2007. Accordingly, the median single family price decreased .8%, while condos decreased 2.5%. What is interesting during this period, investment banks were closing, people were losing their jobs, businesses were going bankrupt, and entire neighborhoods were being foreclosed on.


How does this 2008 period compare to May 2020's housing stats? On Oahu, there was a 22.5% decease in single family sales from 2019. In addition, there was 51.2% decrease in condo sales from the same time last year. The median single family homes prices increased 3.5% and the condo median decreased 4.4%.


Due to a lack of inventory and also a lack of buildable space, our housing market tends to be resilient even during economic downturns. The median single family home price in May 2020 was $797,000, while it was $630,000 in May 2008. Likewise, the median condo price in May 2020 was $399,000, while it was $330,000 in May 2008. Real Estate continues to outperform other investments over time.


If you are looking for financial stability, owning real estate could be a solution. Although there could be deals, prices have seemed to hold well.


-Roda


#RyanOda #RealtorRoda #ForwardRealty #MovingYouForward #HawaiiRealEstate #Buyer #Seller #HousingCrisis #COVID19 #COVIDEconomy #HomeOwnership


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Ryan Oda (RB-23073) is a Real Estate Advisor with Forward Realty (RB-19423) in Honolulu, HI.