by Dan Polimino
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It’s February. Can you believe it? The winter is flying by, but not winter here. We’ve got beautiful sunny days. Cool breeze, cool nights. It’s about 68 at night when we go to bed. It’s perfect. I wish you were here and maybe you will be soon.
But today we are giving you a February market update. So the shift in the economy or the shift in the housing market really started about April of last year, and in 2 short months it’ll be a year since the market corrected. What I’m here to share with you today, is that all of the vital signs all of the economic vital signs seem to indicate that this market correction in the housing market is near the bottom, if not already there. I would expect that prices are not going to move very much further.
In the months of February and March and as we get into April and May, as interest rates continue to come down, the market is going to start to go up again. There’s going to be a demand and there could be bidding wars again, I think. The year-long market correction is about at the bottom now. As I always say, I reserve the right to be wrong, but so far everything has been tracking in that direction.
The Fed, as you know, only raised the short term interest rate by 1/4 of a point. It remains to be seen whether or not they’ll do another raise in March. My hunch is no, but who knows? It’ll really depend on what that consumer price index number is, and again it came down to 6.5. I think it’s going to come down further. The stock market seems to be improving in some areas and mortgage rates are improving again, I think we’ll be at about 5.5% on interest rates in May, and I think that will spur on a pretty robust spring and summer selling season.
So if you’ve been holding off, and you’re thinking, “oh, I can time the market”. First of all, anyone who tells me that they can time the market. I say hog wash! In over 1200 transactions I’ve never met anyone yet who’s been able to time the market. But if you think you can time the market, then you’ve got about two or three more months before prices are going to start to head up – that’s my professional opinion.
As inventory goes, yes, inventory is up here a little bit on the Big Island. I took a look at the 2022 stats as a whole. Whether we’re talking single family or condo, we had a 5.6% appreciation or 5.6% increase and the reason why that’s significant is because, as you know, the majority of places across the country didn’t see any appreciation in 2022, they actually saw a decrease. I think it’s going to go up again here in Hawaii in 2023. I don’t think we’re going to have negative appreciation, but there is a window here in the market where you can purchase a property at asking price or slightly below. If you’d like more information or details on my analysis, please feel free to call me! (808) 913-0899
