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Should you Wait to Move on Real Estate Until Interest Rates Drop?

Why this might be the right time to consider buying a house or condo in Hawaii.

A big debate in the real estate market is whether to buy now at today's interest rates (6%-6.5%) or wait in the hopes that rates go down. From a Realtor's perspective who was actively Selling homes as well as assisting Buyers in 2020 and 2021 (The peak of the real estate market in Hawaii), I have a very candid opinion.  

Buyers who sit on the fence hoping for rates to drop forget that all things are not equal when rates are at 6.5% versus 3%. 

When rates were at 2.5%-3.5% in 2021, the market was fierce and Buyer motivation was through the roof. Many of the homes were purchased in cash and Buyers were willing to pay tens of thousands above the list price.  They even went so far as to waive home inspections, termite inspections, guarantee closing despite appraisals falling short, and pay for things that sellers usually pay for like surveys and condominium documents. Buyers that didn't have 100% cash, placed huge down payments of 40%-60% to show their maximum strength due to their need to acquire a mortgage loan. Basically offers that were being placed were A++ Grade. All cash or heavy down payments, with multiple contingencies waived.  Not to mention that the average days on market for a Single Family Home was 5-7 days, Condominiums 5-10 days. Buyers had to immediately jump when properties came on market. 

waiting neon sign
Buyers who sit on the fence forget that all things are not equal when rates are at 6.5% versus 3%. 

Do you have 100% cash to make a purchase? Do you have 40%-60% down payment to show your financial strength? Are you willing to pay thousands over asking to be competitive and waive contingencies? If you don't, then now is the time to buy. Buyer motivation has softened slightly and it now takes longer for properties to sell. Remember, you can't change the price you pay for your property.  But you can change your interest rate should rates go down in the future. Marry your Home but date your Rate!  Buyers now have more time to shop for homes, there is more wiggle room for negotiating, and Buyers without huge down payments still have a good chance to get their offers accepted. 

So you see, all things are not equal.  When rates are low, market demand is High. When rates are high, market demand softens. Where do you stand? I can help you navigate Hawaii's housing market. Contact me for a private conversation


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