Forecast Hawaii Real Estate 2022

by | Feb 24, 2022 | Buying Real Estate, Selling Real Estate

Many are wondering what is the forecast for Hawaii real estate in 2022. Coming through the COVID-19 pandemic we saw the efforts of the federal government to lower interest rates turning into huge home buyer opportunities. A lot of local families and investors were on the hunt for real estate last year. The competition was fierce, houses were flying to escrow within a couple of days in the market. Buyers were throwing offers above market, left and right. Appraisals not always in line with those high offers. And for the first time, some buyers didn’t really care. It felt like a deal and once in a lifetime opportunity to get a good mortgage rate for many. This drove the market up so much that in certain cases some properties appreciated a good 20-30% in one year only.


How do you feel about buying a home in 2022?

If you follow the new you have heard the intent of the government to increase interest rates multiple times this year. If you are looking for a home or investment property you may feel the rush to lock it in sooner rather than later. It has been forecasted that mortgage rates will rise to 4 percent by the end of 2022 


Windward Oahu has the Most Potential for Increase in Real Estate Value

In the past year we saw the increase in home prices throughout Oahu, but especially Honolulu, Hawaii Kai, Aiea, Ewa Beach, Makakilo and even Kailua and Kaneohe. As all the above areas appreciated so much, we can predict a shift in the market for the island of Oahu. We may see a large growth pattern on the windward side. Specifically, the area north of Kaneohe.

 A Year of Growth to Northeast Side of Oahu

We are starting to see a trend in 2022 in which buyers are moving farther north on the windward side. The competition is less, the land is bigger, and the prices are cheaper. There are amazing beaches there, away from turist and crowds which is very attractive. The drive can be quite long as you get toward Kahuko, however. This may be less important for retired families, or families who work from home.

In truth, there’s a lot to be discovered in the northeast side of Oahu. This is the are you may find some deals and hidden gems. The west side has been looked at over and over.


Interest Rates Are Increasing

The rise of interest rates affects us globally. As money gets more expensive to borrow, you’re going to have less people borrowing it. Bottom line is that the buyer pool will be reduced.

 Higher Mortgage Rates Will Decrease Buyers

In history, it has always been this way. The higher the interest rates, the harder to qualify for the same loan. Basically, underwriting requirements are going to be higher and you’re going to need to come in with a little more cash. What you could have afforded a year ago, you may not afford now. In some cases people qualify for a much smaller mortgage just by a point adjustment in the rate.

Ultimately this shift to increase interest rates will help thin out the buyer pool a little bit which is going to provide a little bit relief in the fierce competition that has been occurring. Ultimately, it will help keep prices of homes from continuing to increase so quickly. Even though the prices increased so much in the past year, it is not expected for them to fall. Interest rates are will still be considered low despite the projected increases.


More Inventory Will Drive Hawaii Home Prices to Slow Down

As there will be less buyers hunting for Hawaii real estate, there will be more inventory available at one time. Buyers will have more choices and less competition. Hawaii home prices are still expected to continue to rise but at a slower pace. If you wanted to buy a home in Hawaii, or one more investment property, now is still the time. You may have slight less competition than a couple months ago, and you will still benefit from lower mortgage rated before the forecasted increases.