Oahu Real Estate Predictions For 2016
Locations forecasts the Oahu Real Estate Market in 2016 to experience a 5 percent growth in median price and sales. Last year was a record-setting year for overall median price levels due to a combination of low inventory and high demand, and these trends look to continue into 2016. The main thing to watch in 2016 will be the rise of historically low interest rates which will directly affect what you can afford and how much buying power you have.
LOOKING BACK ON 2015
The Oahu real estate market in 2015 was defined by low inventory, historically low interest rates and increasing demand that led to record-setting median prices for homes and condos, and high levels of competition. Here is a look at the main data points from the past year; visit locationshawaii.com for more.
The Oahu housing market continues to grow at a moderate pace with a 3.7 percent and 3.1 percent increase in median price for single family homes (SFHs) and condominiums, respectively, and a 5.3 percent increase in overall sales.
For all of 2015, Oahu had record median price for both SFHs ($700,000, up 3.7 percent compared to 2014) and condos ($361,000, up 3.1 percent compared to 2014). Seventy nine percent of Oahu’s neighborhoods had a positive change in median price over 2014, with 40 percent of them having double-digit price appreciation.
HIGHER PRICED LISTINGS ON THE RISE
New listings for properties priced at over $1 million in the single family market and over $500,000 in the condominium market were noticeably higher than last year. Higher priced properties stayed on the market longer, and despite the overall housing shortage, there is more existing inventory now compared to 2014.
LOOKING AHEAD TO 2016
For 2016, Locations forecasts a 5 percent increase in both number of sales and median price for the overall Oahu residential market. Steady growth in sales and price appreciation consistent with the past four years also are expected. However, each market area and neighborhood will behave differently depending on inventory and demand.
The Oahu residential market’s continued near-record levels of strong demand indicators such as days-on-market and bid-up percentages should push both prices and sales up. This is tempered by the constraints of low inventory, reduced affordability and economic concerns such as rising interest rates.
Interest rate increases are the main headwind to watch, which will have a direct impact on affordability and borrowing power. As long as the Federal Reserve continues with its planned policy of cautious, gradual rate increases, the corresponding modest rises in mortgage rates should not have a major negative impact on the Oahu real estate market in 2016.