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Happy New Year everyone! We’re kicking off January 2023 in style here in Hawaii. It’s been just an amazing festive time here over the holidays. The weather was fantastic, the volcanoes had shut off just before the holiday started and so there was no vog. It was clear it was sunny and a good time was had by all.
It was interesting this year – Thanksgiving actually had more attendance here than Christmas. Thanksgiving was at capacity. All of the hotels and restaurants were 100% full. It was one of our biggest Thanksgiving crowds we’ve ever had. But Christmas was not at 100% or even close to 100%. The hotels were reporting about a 70% occupancy. I will say, though, it was kind of nice because during the two weeks between Christmas and New Year’s, it wasn’t as packed as I was expecting the. The lines weren’t as long as I was expecting. You could get a table and you could get a dinner reservation. So not a good economic outlook at 70% – the hotels and the restaurants are going to have to do better than that.
But, the good news is that it’s the first week of January. The snowbirds are on their way. They are arriving and we get a lot of people from Alaska, Canada, and from the northern part of the country that just want to come here January, February, March and they usually leave in April which coincides with our high season. Our high season (when we’re the busiest) is December, January, February, March, April and then at the end of April the Snowbirds go back and it starts to get a little slower here. Then we get a bump again in June when people are here for the summer. So that’s kind of our cycle.
So, let’s talk about how the market is in general.Prices are pretty stable, it just really is a tale of where it is that you’re buying. For instance, if you are buying in the resorts, and you’re buying something that has the capacity to have a short term vacation rental, you’re probably going to be paying at asking price or over asking price. That market has stayed very, very robust and the properties are not staying on the market very long. If you’re buying somewhere else on the island, let’s say you’re buying up the mountain in up country like Wiamea, Waikoloa Village, and there’s something that’s a primary residence up there that’s been on the market for a while, that’s something that you’re probably going to be able to get a discount on. How much of a discount just depends.
But here’s one thing we have found out – whether you’re up country, or you’re down in the resorts, or wherever you are in the island, if it’s a great house in a great location, it will sell and it will sell quickly, and it will probably sell for asking price. In fact, I said it was going to get really busy here. And sure enough about a week before Christmas, our showings picked up dramatically and we had three properties on the market. All three of our property listings went under contract over the two weeks of Festive. There were a lot of showings and a lot of interested people who were ready to buy again.
We think you’re going to have this window of opportunity here between January and the end of April where you can get some price stability. Or you might be able to get some money off the house. The thing that you need to watch out for is the Consumer Price Index (CPI). The CPI number for January is going to be released on January 12th and I expect that it’s going to show inflation. As the inflation number comes down, mortgage rates will come down as well. And as you know, if you’ve been watching our blog for a while, you know that we’ve been telling people that mortgage rates are going to settle at about 5 1/2 percent around the April, May, June time period. If we get down to 5.5%. The market’s going to take off again and there could be bidding wars, so I think you’ve got this window of opportunity to avoid the bidding war to avoid price escalation between now and I would say May 1st, so take that for whatever it’s worth.
Alright, remember if you need to buy, sell or invest in real estate, contact us here. At the Hawaii team, we’d love to hear from you (808) 913-0899 or contact us at the hawaiiteam.com, Aloha.