Janis Magin Meierdiercks

Legal settlements have disrupted how real estate agents are paid. Hawai‘i experts weigh in on what to expect next.

Sales on O‘ahu have fallen nearly 30% so far in 2023, but a reversal is possible next year if mortgage rates decline.

One local insurance agent estimates that the owners associations for as many as 390 buildings have renewed their policies with less than 100% replacement coverage.

The new ceiling will be almost $1.15 million in Hawai‘i. But with 7%-plus interest rates, there will be few takers.

Fannie Mae now says only a 5% down payment is needed to buy a single property with two, three or four homes on it

At issue is the National Association of Realtors position on how the commission for a buyer’s agent is paid, a rule that a federal jury in Missouri has already put in doubt.

Those properties are more likely to sell quickly, and they come with some extra financing options.

In some cases, there are more off-market listings than public ones for homes that start at $20 million, the CEO of Hawaiʻi Life says.

At issue is the commission paid to agents who represent buyers in real estate transactions.

The mortgages come with no down payments, but max out at $977,500, which limits what they can buy in Maui’s expensive housing market.

Hawai‘i Life says 16 West Maui homes have been switched from short-term to long-term rentals since the fire. But most units offered are filled immediately, with remaining long-term rental vacancies in the luxury market only.

In each of those places, prices so far this year are lower than last year.

One Realtor says prices will likely go up fast when interest rates fall, so eager buyers are being encouraged to close on deals now and then try to refinance in a few years at lower rates.

While the number of homes sold in most categories of O‘ahu real estate were flat or down in August, the sales numbers went up for single-family homes priced at $3 million or more and condos starting at $1.5 million.

Oʻahu's percentage drop in refi loans during the second quarter was the second largest in the country, according to a national report.

After the deadly Marco Polo fire of 2017, older Honolulu high rises were required to install sprinkler systems or pass a safety evaluation, but compliance is slow going. Now state legislation asks them to add the costly systems to their reserve studies.

“Our buyer pool is very low, but when I look at the sales, I’d say more than half are cash,” says the president of the Kauaʻi Board of Realtors.

Hawai‘i Island’s overall median price has been relatively steady this year, but the lowest priced deals – including many inexpensive vacant lots – can often be found in Puna.

That’s based on sales of condos and single-family homes during the first quarter of 2023.

Japanese buyers have been mostly absent from the high-end market since the pandemic started, but many mainlanders, and some locals, are showing interest.

The average rent for a studio apartment on O‘ahu last year was up 25% from 2017 and larger rentals were up, too, by at least 17%.

Homeowners are guaranteed a tax break on capital gains up to a fixed amount, while owners of investment properties can defer those gains using a 1031 exchange. But “timing is important” for the strategy to work, says Julie Bratton of Old Republic Exchange Co.

O‘ahu home sales were down in May compared with a year ago, but some areas, like Hawai‘i Kai and Kailua, are starting to see an increase in prices.

Nationwide, homeowners lost equity on average during the first quarter of this year. But in the Islands, homeowners with mortgages gained on average $24,900 in the value of their homes.

But just about everywhere on the island, fewer condos were sold in the first quarter of this year compared to last year – much fewer.

A national report and a local index show that affordability has gotten much worse in the past two years.