Do you want to buy a dream home or sell a property in Honolulu? Whether you are relocating or investing in a new property, there are many things to consider. One of the most important things you need to think about is the condition of the real estate market. Read on to find out how the real estate market in Honolulu is performing, what is expected to happen in 2023, and what this could mean for buyers, sellers, and investors.
The Honolulu real estate market
There are many reasons why the Honolulu housing market has started cooling down. For one, the federal mortgage rate increased to 6.35% for a 30-year loan, affecting many buyers, sellers, and investors throughout the country. In addition, inflation has been rising, resulting in prices for many household essentials to go up. Specifically, the cost of living in Honolulu is 95% higher than the national average, with residents paying more for housing, utilities, and groceries than they would in comparable cities across the country. As long as inflation and home prices keep rising, the market in Honolulu is likely to keep cooling down. Many buyers are likely to get priced out of the market, and sellers might be more hesitant to list during a less competitive environment.
Toward the end of 2022, fewer homes were selling on the market. Of the homes selling, many were selling for less than the asking price, indicating the buyers had greater negotiation power. During much of 2023, it is likely that this trend will continue with fewer homes on the market. It is also likely that home prices will continue to rise steadily throughout 2023 with the rising mortgage rates and inflation.
Potential for appreciation
Despite the Honolulu real estate market experiencing a cooling down, home values will continue increasing. Over the past twenty years, the housing market in Honolulu has risen by 229% at a rate of 5% annually. Home values in Honolulu continue to increase because of a flourishing economy, thriving job market, and excellent location. The job market in Honolulu has experienced a slight increase over the past year, and it is likely to grow by another 31% over the next 10 years. This is further supported by the fact that the population is expected to reach approximately 363,000 by 2029.
There are many reasons why the people and economy will continue to grow in 2023 and beyond. Located in the middle of the Pacific Ocean is the beautiful island paradise of Hawaii. For years, many have desired to move to Hawaii, particularly Honolulu, to enjoy the slow-paced lifestyle in one of the country's most beautiful and tranquil places, perhaps even the world. Furthermore, Honolulu offers breathtaking views, beautiful weather, and excellent outdoor recreational options. For example, residents love surfing at Waikiki Beach or Banzai Pipeline Beach. Locals also love engaging in much-needed retail therapy in the enclosed Luxury Row shopping mall that hosts various upscale brands, such as Gucci, Dior, Golden Goose, Miu Miu, and Chanel. Residents also love the prestigious Honolulu Country Club, where they can play on the 18-hole championship course while enjoying the magnificent city views and a two-story clubhouse. With so many things to do, combined with a thriving job market and economy, there is no wonder why many are flocking to Honolulu.