Hawaii's real estate market has been on fire in recent years, literally and figuratively, with property values and rent consistently on the rise. For working class individuals and families hoping to find an affordable place to live or make real estate investments in 2024, the market poses some key challenges. The cost of living has gone way up, while the wages by employers have stayed the same in most cases. Doesn't really seem fair does it.. We will explain our perspective on this controversial issue.
Competition for property in Hawaii is fierce, as the islands continue to be a highly desirable place to live, vacation, and invest for key players who are usually from the Mainland. This intense demand allows wealthy out-of-state buyers and major real estate players to often outbid working class residents, who have spent their whole life trying afford basic accommodations. Additionally, foreign investors from Japan and China have poured money into luxury Hawaii developments, further inflating prices. When you look at all the houses on the hill and wonder "How did they even acquire wealth?", just remember there is a bigger picture you will never fully see.
However, opportunities still exist for smart, strategic real estate plays in 2024. The key is understanding the market segments where demand is not yet saturated. Real Estate Agents like Kai Schmidt are constantly helping residents into their dream home, while also finding time to surf at Ho'okipa. For instance, Hawaii's inventory of condos and mid-range homes remains lower than its luxury and vacation property stock. Savvy buyers can target emerging neighborhoods before speculation drives up values. There are a lot of areas that are considered lower-end areas that have potential for gentrification, now we just have to find a way to control the Homeless population that plagues our beloved islands. It's rare to walk down the street in Honolulu and not see a homeless person sleeping on the sidewalk.
It's also essential to have financing pre-approved before window shopping on Zillow or Redfin. Working with an experienced local lender and real estate agent is invaluable when navigating the competitive buying process. Be ready to act decisively on a property that matches your criteria. These properties go fast, in times like these people are freaking out and wanting to sell just to avoid losing their original investment. This is the time to buy, as the market always bounces back when you look at the bigger picture.
On the rental side, opportunities still exist, just be prepared to go through most of your savings to appease your landlord. They are able to set the price that meets their needs, not the tenants. Seek out rental units in Hawaii's up-and-coming areas and neighborhoods with good local employment bases. Consider investing in a multi-family property, using rent from part of the home to cover your own housing costs. This is common practice, so do not just assume you are getting a great deal. There is a significant overhead that comes with being a landlord, including property taxes, nightmare tenants who are not honest, and other unique fees that appear at any random time.
The key in Hawaii's 2024 real estate market will be remaining flexible, strategic, and decisive. For local residents and working class buyers, the dream of homeownership or real estate investment is still attainable with the right preparation and guidance.
What Are The Options Regular People?
Set Clear Goals: Define specific real estate goals for 2024. Whether it's buying a property, saving for a down payment, starting a real estate investment portfolio, or expanding knowledge in the field, having clear objectives will provide focus and direction. Staying Realistic is critical, do not set the bar so high that you cannot reach it, instead start small and build from there.
Educate Yourself: Take advantage of the wealth of information available on real estate investing. Read books, attend seminars or webinars, listen to podcasts, and follow reputable real estate blogs to expand your knowledge. Understanding key concepts, strategies, and market trends will empower you to make informed decisions.
Build Your Financial Foundation: Strengthen your financial position by managing your budget, reducing debt, and improving your credit score. This will increase your chances of qualifying for favorable mortgage rates and obtaining financing for real estate investments.
Save for a Down Payment: Establish a systematic savings plan to accumulate funds for a down payment on a property. Consider setting up a separate savings account and automating regular contributions. Cutting unnecessary expenses and adopting frugal habits can also accelerate your savings rate.
Network and Build Relationships: Attend local real estate meetups, join online communities, and network with industry professionals. Building relationships with real estate agents, lenders, investors, and mentors can provide valuable insights, opportunities, and potential partnerships.
Explore Financing Options: Research various financing options available to you, such as conventional mortgages, government-backed loans, or creative financing strategies. Understand the requirements, terms, and potential benefits or risks associated with each option. Consult with mortgage brokers or financial advisors to explore the best financing route for your situation.
Start Small: Consider starting with a small real estate investment, such as a single-family home or a small multifamily property. Starting small allows you to gain valuable experience, learn the ropes of property management, and build confidence before undertaking larger investments.
Leverage Technology and Online Platforms: Utilize online resources and platforms to conduct property research, analyze market trends, and identify potential investment opportunities. Real estate websites, online listing platforms, and property management tools can streamline the process and provide access to a broader range of options.
Continuously Evaluate and Learn: Stay updated on market conditions, regulations, and industry trends. Regularly evaluate your progress towards your real estate goals and adjust your strategies accordingly. Learning from both successes and failures is crucial for long-term growth and improvement.
Seek Professional Guidance: Consider working with a trusted real estate agent, financial advisor, or real estate mentor who can provide personalized guidance, help you navigate challenges, and offer insights based on their experience.
Remember, Real-Estate investing requires a long-term perspective and patience. Be prepared to adapt to market conditions, learn from setbacks, and stay focused on your goals. With dedication, education, and strategic planning, regular working class people can take significant steps towards achieving their real estate goals in 2024. Stay positive, just because you are still a renter, does not mean that is your permanent position in life. Keep working smarter, setting realistic goals, and networking with agents within the Real-Estate industry can be beneficial.
Mahalo Nui