You may have heard reports that pending home sales dropped nationwide in August, and are wondering if there's any cause for concern. First of all, the report is based on the National Association of Realtors' Pending Home Sales Index, which fell just one percentage point that month to end at 104.7. The dip is miniscule, and it is still an above-average level of contract activity. If anything, the important thing to evaluate is what caused that dip, and where will the market go from here.
Analysts believe that investors have begun to be less active in the housing market because there are fewer distressed homes at cheap prices. This evaluation has a ring of truth to it, especially considering the second quarter data from RealtyTrac that showed that in the second quarter, 42.5 percent of Hawaii home sales and 38 percent of nationwide home sales were paid for in cash. Investors represent the vast majority of those who are able to buy a home outright without needing a loan.
RealtyTrac's nationwide data also revealed that 67 percent of homes priced at $100K or less were paid for in cash. Yes, investors buy up cheap properties. That leaves first-time home buyers and others who need a loan with fewer affordable homes to choose from. Now that there are fewer cheap properties available, traditional home buyers are expected to tow the line for the housing market moving forward.
First-time home buyers have made up less than a third of all home buyers over the past two years, but the job market is improving. While there are more jobs now, we're still waiting for wage growth to pick up. The market should see an increase in the percentage of first-time home buyers making purchases as wage growth increases.
If you're a traditional home buyer who will need a mortgage for an affordable Maui home, there is one way in particular that you can stay ahead of the investors. Keep in mind that they tend to move in a group, and that means delays in their reactions to changes in the market. A few of them might move quickly, but all you really need is to stay ahead of the bulk of them. If they continue to pull out of the housing market, keep an eye on housing prices. Watch very carefully for those new Maui home listings, instead of following the ones that have been on the market for a long time and are slowly dropping their asking price. There's probably a reason those have been passed up. Watch for the new ones, and move quick when you find one that meets your needs. Even if you need a mortgage, the key is to make a reasonable offer that will be accepted before the investors show up to pay in cash. It's all about vigilance.
If you need assistance buying Maui real estate, you'll find our contact information at the bottom of the page. Mahalo!
Maui real estate is moving along, with some new developments in the works that will help meet current demands. Construction recently began on Nuu Aina, the Hunt Development Group's $65 million luxury residential project in Kihei. The groundbreaking ceremony has already taken place, and pre-sales are expected… Continue Reading
The Lahaina Halloween festivities begin Thursday, October 30th. The first annual Maui Comedy Festival presents over 30 different comedians performing at 6 different venues in Lahaina - from Thursday, October 30th to Sunday, November 2nd. This three-day event flaunts the historic town of Lahaina and a portion of the proceeds… Continue Reading
One of the great things about living in South Maui is that you get the beach town experience, but you're not too far out of the way from other places of interest. On that note, the lively town of Lahaina in West Maui is a fun… Continue Reading
If you are looking for a luxurious place to call home in South Maui, we have just the property for you. Unit 512 at Kihei Surfside (Update: SOLD) is located in energetic city of Kihei, Maui.
See all Kihei Surfside Condos for Sale
In this vibrant beach town you will find numerous… Continue Reading
Looking for a way to cut energy costs? Although Hawaiian Electric has been making progress with the cost of energy thanks to increasing renewable sources, there are still options for Hawaii home owners to lower their bills. SolarCity has recently unveiled their loan program to customers in… Continue Reading
If you're thinking about buying a South Maui home for retirement, or you're simply a resident without employer-based health care coverage, the upcoming workshop on health care education may be of interest you. Nothing is more important than your health, so if you have… Continue Reading
Are you considering buying property on Maui? If so, while browsing our property listings, be sure to check out Unit 510 at 10 Wailea Ekolu Pl (Update: SOLD). in the heart of Wailea/Makena. Check out all Walea Ekolu condos for sale.
The Wailea and Makena areas are located at the furthest tip of… Continue Reading
You may have heard reports that pending home sales dropped nationwide in August, and are wondering if there's any cause for concern. First of all, the report is based on the National Association of Realtors' Pending Home Sales Index, which fell just one percentage point… Continue Reading