November 2023 Market Report
Big news! The Federal Reserve recently had a meeting and decided not to change the key interest rate for the third time in a row. However, they hinted at making three rate cuts in 2024, four in 2025, and three in 2026. Right now, the borrowing rate is about 5.5%, but in 2 or 3 years, it might drop to around 2% as inflation gets under control. This news made the stock market jump up by 400 points, reaching 37,000 for the first time.
So, what does this mean for you? If you're thinking of buying a property, now is the time to act. Once interest rates go down, more people will be buying, and prices will go up. Don't wait—be proactive and buy now while there's less competition. Consider getting a property with a lower price and credits from the seller. You can use a highly leveraged loan with a low down payment, ARMs, and points back from the lender. Later on, when interest rates drop, you can refinance.
If selling quickly isn't a priority for you and you can find someone to rent your property for now, it might be a good idea to wait until interest rates drop a bit. With more buyers in the market, you'll likely be able to sell your property for a higher price when there's increased competition.
Currently, interest rates are around 8%, and the Hawaii market is still staying roughly the same or down ever so slightly. I believe we'll see these recent months as the last opportunity to grab a great deal before prices go up.
If you're a buyer, will you take action to get ahead of the crowd, or will you repeat the same mistake and wait? Contact me directly, and we can discuss how to guide you in the right direction!
In November, the number of houses and condos sold went down a bit compared to last year. All the sales together were about 8% less than in November 2022. The sales of single-family homes dropped by 6.3%, and condos went down by 8.8%.
The prices for houses and condos in November were pretty similar to October 2023. Compared to last year, the price for a single-family home went down by 4.3% to $1,100,055. But for condos, the price went up by 7.5% to $516,179.
In November, many people signed contracts to buy houses priced between $800,000 and $999,999. This range made up almost one-third of all the pending sales, with 56 contracts signed. In the condo market, more than 75% of pending sales were for condos priced between $200,000 and $799,999. The most popular range was $300,000 to $599,999, making up about 46% of all contracts signed in the month.
Sales of single-family homes in the $800,000 to $1,199,999 price range took a hit, dropping by 28% compared to November 2022. The number of sales dwindled from 82 to 59. On the flip side, the lower-priced homes between $500,000 and $799,999 saw a significant uptick, experiencing a 60.9% increase with 37 sales. The decline in the higher price range could be attributed to factors such as economic uncertainty, higher interest rates, or a shift in buyer preferences. Potential buyers might be reconsidering their budgets or opting for more affordable homes due to financial concerns.
In the condo market, the $200,000 to $499,999 price range faced a downturn, experiencing a 23% decrease with 127 sales. However, sales at other price points remained relatively steady.
This year, there has been a notable decline in the number of home sales closing above the initial asking price. For the single-family homes, only 21% of transactions closed above the original asking price, marking a drop from the 31% recorded the previous year. For condo sales, only 19% closed for more than the original asking price, compared to nearly a quarter in November 2022. Possible reasons for this shift could be linked to changes in buyer behavior, economic factors, or adjustments in overall market conditions.
For buyers, this shift presents some advantages. It might become slightly easier to secure a property without having to exceed the initial asking price, which is particularly beneficial for those on a tight budget. This also translates to more stability and potentially more room for negotiation.
On the flip side, sellers may face some challenges. The decrease in transactions closing above the asking price might mean a slower market, and sellers might need to be more strategic in pricing their homes to attract potential buyers.
Properties took longer to sell in the current market, with both single-family homes and condos showing a median days on market of less than a month. Single-family homes, in particular, had a median days on market of 29 days, which is an increase from the 18 days observed in November 2022. Similarly, condos had a median days on market of 23 days, reflecting a five-day increase compared to the previous November.
This shift has implications for both buyers and sellers. For buyers, the extended time on the market may provide more flexibility and opportunities for careful consideration before making a purchase decision. On the other hand, sellers may need to be patient and adjust their expectations, understanding that it might take a bit longer to sell their properties.
In terms of new listings, there was a slowdown in comparison to the previous year, with single-family homes and condos experiencing a 7.6% and 13.1% decrease, respectively.
For potential buyers, this reduction in new listings might translate into a more competitive and constrained market. With fewer homes coming onto the market, buyers may find themselves facing increased competition for the available properties. This heightened competition could potentially lead to an upward pressure on prices, making it more challenging for buyers to secure a property within their desired budget. Buyers may need to act more swiftly and strategically in their home search, being prepared to make stronger offers in a market where choices are limited.
On the seller's side, the decrease in new listings can present both challenges and opportunities. While the reduced inventory might mean less competition for sellers, allowing them to potentially command better prices, it could also mean a longer time on the market for those looking to sell. Sellers may need to carefully consider their pricing strategies and be prepared to navigate a market with fewer options for potential buyers.
The single-family home market had 672 active listings at the end of the month, showing a 1.5% year-over-year decrease. However, the condo market saw an increase of 7.5% year-over-year, with 1,337 listings. It's worth noting that both markets still had lower active inventory levels compared to before the COVID-19 pandemic, dropping by 32% for single-family homes and 26% for condos compared to November 2019.
For potential buyers, the reduced inventory could mean a more limited selection of homes to choose from, potentially leading to increased competition for available properties. This heightened competition may place upward pressure on home prices, making it a more challenging environment for buyers, particularly those with budget constraints.
In November 2023, the total sales for single-family homes were 180, marking a decrease of 6.3% from the 192 sales recorded in November 2022. Additionally, the median prices for these single-family homes witnessed an decrease of 4.3% compared to the previous year. However, condos experienced a decline of 8.8% in sales, with 310 closed sales in November 2023 as opposed to 340 in November 2022. Condos also saw an increase of 7.5% in median sales price in November 2023.
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Whether you're looking for a stunning beachfront home or a cozy condo in Honolulu, feel free to reach out to Mike Hegazy II & team. We're dedicated to providing exceptional service and expertise to our clients.
