Smart Money Hawaii

 Summer came and went, and so did the lower interest rates.  According to Freddie Mac, the benchmark 30-year fixed rate mortgage average is now north of 6 percent.  The Honolulu Board of Realtors reported that in August, the number of single-family homes sold was down 26.1%, and condos were down 24.7% compared to last year.  However, this stat is a little misleading because although the number of units sold was drastically lower, the median sales price for a single-family home is up 7.2%, while condo median sales prices were down by only 0.3% from a year ago.  The Honolulu Board of Realtors also reported that new listings for single-family homes and condos were down 17.2% and 15.7% respectively compared to the same time last year.  When mortgage rates went up, affordability decreased, ultimately decreasing the number of units sold.  However, home prices did not experience the same dip because the demand for quality homes remains higher than the supply.  This is evidence that lack of

  Will My House Still Sell in Today's Market by Micah Grafsgaard, Paradise Brokers (RB-23305) If recent headlines about the housing market cooling and buyer demand moderating have you worried you've missed your chance to sell, here's what you need to know. Buyer demand hasn't disappeared, it's just eased from the peak intensity we saw over the past two years. Buyer Demand Then and Now During the pandemic, mortgage rates hit record lows, and that suprred a significant rise in buyer demand. This year, as rates increased due to factors like rising inflation, buyer demand pulled back or softened as a result. The latest data from ShowingTime confirms this trend (see graph below): The orange bars in the graph above represent the last few months of data and the clear cooldown in the volume of home showings the market has seen since mortgage rates started to rise. But context is important. To get the full picture of where today's demand stands, let's look at the Ju

“I’m going to wait for rates to go down before I buy.”  I’ve been hearing this statement a lot these days.  While there is nothing wrong with waiting for the right time to buy your home or investment property, I feel it is virtually impossible to time the market.  However, this statement led me down a rabbit hole, and I started to research historical rates and home prices on Oahu.  Freddie Mac has a site that tracks 30-year mortgage rates all the way back to 1971.  The chart does show that since the early 80s, mortgage rates have trended downward until the present day.  It is crazy to think that mortgage rates got as high as 17% during the Reagan Era!  I am so grateful we are not there again.  Next, I went to HiCentral.com to look back at almost 40 years of sales data on Oahu since 1985.  While we could spend hours debating how interest rates and other external factors will lead us into another housing crisis, I thought we’d take a more simplistic look at historical data in 5-year

It is Sunday afternoon, the signs and balloons are on every street corner - time to head to open houses! You walk into a freshly air-conditioned home, the smell of vanilla candles, light music playing. It is easy to get distracted by the glamorous staging and cute decor of the home. But don’t be so easily fooled. You want to look beyond the surface of the home’s appearance to determine if it will be a good match for your needs. If you plan on looking at more than one open house, take lots of notes to make sure you remember what makes one home stand out more than the next. Write down both the positive and negative thoughts you had while visiting the home What details should you be looking for as a home buyer at an open house?  -        Floorplan - Is there a good flow to the home? Is there ample space for your lifestyle - play area for kids, a spare room for the office, enough storage space? -        Look up! - Check the ceiling, walls, and seams of the house for any damage. This ca

     It’s official! The first half of 2022 is now behind us. The current zeitgeist in the housing market mostly relates to inflation. This reminds me of a book I read a few years ago called The Tuttle Twins and the Creature from Jekyll Island. This is just one book of a series that are meant to teach kids about the principles of a free society. This book talks about the Tuttle twin’s grandparents taking them to a movie. They overhear grandpa complaining about how expensive everything is and how movies were 50 cents when he was a kid. Grandpa talks to grandma about the creature from Jekyll Island stealing his money. The kids overhear them and are worried about this monster. Long story short, grandpa and grandma are on a fixed income, and the creature from Jekyll Island is really a representation of a group of people that control the money supply, which in turn affects inflation.       When the money you make doesn’t outpace inflation, you become poorer and poorer. This can happen to peo

  It’s a Battle Between Stocks and Bonds!  Who Will prevail? In these final weeks of Spring, I’d like to say congratulations to all the young graduates.   Graduation is a time we all remember, and I must say that it was great to see some resemblance of normalcy this year.   I also wanted to make one special shout out to Aiden Rodriguez, son of VP of Operations, William Rodriguez.   He is the first of the Smart Money kids to graduate from high school and we are all very proud of the fine young man he has become.   Continue to do great things, Aiden.   The aunties and uncles at Smart Money are cheering you on! Now on to mortgage news.   In our last newsletter, we spoke about the relationship between the Fed Funds rate and mortgage rates.   I hope you all got something valuable out of that article.   Today, I’d like to discuss the relationship between stocks and bonds.   Specifically, how stocks affect mortgage rates.   Imagine two buckets.   One bucket represents the Stock market a