As the real estate market moves, the rest of the world market is also changing. Even the smallest changes can result in an important movement in other aspects of business, finance and even travel. That is why it is important that we occasionally lower the speed and analyze the different tendencies that develop.
Ten years ago, the housing bubble burst and housing prices across the country began to fall to record levels as the Great Recession shook the nation. Today, housing prices in Hawaii are again record, but in a very different economic climate, reinforced by the growing tourism in the country, construction, low interest rates and low unemployment.
What we can expect for the Hawaiian real estate market are six trends this year:
Some tax benefits that the owners have enjoyed for a long time have been reduced. And under the tax code review, states with high taxes and house prices such as Hawaii will be more affected. For e.g, owners of new homes can deduct the interest rate of only $ 750,000 in mortgage debt, below the previous $ 1 million limit. That would not have to influence the majority of the nation, as only 4 percent of the mortgages purchased in 2017 were more than $ 750,000, according to research firm Attom Data Solutions. But in Hawaii, where the average price of a single-family home on Oahu is about $ 750,000 (modest home), it will be a consideration to buy a house. According to the new tax legislation, taxpayers who are specified are limited to $ 10,000 for deductions in state, local and property taxes. There was no limit earlier.
Hawaii’s unemployment rate is the lowest in the country at 2 percent, which is a constant boost for the housing market. The adjusted labor market can make a much-needed contribution, but as long as Hawaii continues to be a service-based economy and the shortage of affordable housing continues, buying houses remains a challenge for many.
Micro – Units
Micro units become popular in urban centers around the world as an innovative, efficient and affordable housing option. The micro-units (also known as micro-dwellings, individual user units) are essentially small studio apartments, as small as 200 to 300 square meters. It would be logical in Hawaii, where the country is scarce and house prices are high.
So-called “monster houses” in residential areas have taken the headlines and drew the attention of the mayor and other city leaders, who will do their best to banish them in 2018 or make it very difficult to have more built on Oahu.These big-box houses have an impact on the neighborhood and are eye-catching symbols of the lack of affordable housing opportunities here, especially in the city. I just hope that city leaders are just as aggressive, creative and passionate about offering affordable housing solutions as they are about closing these samples.
Long-term mortgage interest rates are expected to rise well above 4 percent in 2018. The prediction rates of the National Association of Realtors will gradually increase to 4.5 percent by the end of the year. A little relief for local home buyers is that the Federal Housing Finance Agency raised the high credit limits in Honolulu this year to $ 721,050. The “conformed” loans are loans that meet the guidelines of Freddie Mac and Fannie Mae.
Single-family homes prices in Oahu are completed in 2017 met at an average $755,000, an increase of 2.7 percent over the previous year, said Honolulu Board of Realtors. Of economic research organization of the University of Hawaii single family homes against predicts 790,000 $2018 around.
With the recent success of the focus on the growth strategy the majority of revenue from Hawaii commercial real estate business. The housing market of Hawaii has long been in a perpetual state of feast or famine. It’s perfect for the ultra-rich but can often offer few options for a population largely employed in the service and hospitality industries. 2018 can see a change as more investors turn to smaller houses of just two and three hundred square feet as a way to provide more affordable housing. Hawaii seems ready to enjoy another year of steady growth in terms of average home values, and it remains one of the most expensive places in the country to live.