B4 • Friday, May 28, 2021
thegardenisland.com
THE GARDEN ISLAND
COMPETITION IS FIERCE Homebuyers increasingly willing to pay above asking price Alex Veiga ASSOCIATED PRESS LOS ANGELES — The redhot U.S. housing market is widening the gap between what a home is objectively worth and what eager buyers are willing to pay for it. Fierce competition amid an ultra-low inventory of homes on the market is fueling bidding wars, prompting a growing share of would-be buyers to sweeten offers well above what sellers are asking. Home prices have rocketed to new highs and many homes are selling for more than their appraised value. “This might be the most competitive housing market we’ve ever seen in the United States, at least in modern times,” said Jeff Tucker, a senior economist at Zillow. The share of U.S. homes purchased above their list price has been steadily rising since early last year after the housing market began to bounce back from a brief slowdown in the early weeks of the pandemic. An average of 20.3% of homes sold last year went for more than their list price, up from an average of 14.2% in 2019, according to data from Zillow. Homebuyers appear no
NAM Y. HUH / ASSOCIATED PRESS
An advertising sign for building land stands in front of a new home construction site in Northbrook, Ill. less eager to sweeten offers this year. An average of about 28% of homes sold above their list price in January and February. The trend is apparent in the nation’s most expensive housing markets. Some 54.4% of homes in sold in San Francisco in February went for more than advertised, while 51.6% did in Seattle. Some 42.1% of homes
US average mortgage rates decline; 30-year loan at 2.95% ASSOCIATED PRESS WASHINGTON — Mortgage rates declined this week, pushing the benchmark 30-year home loan back down below the 3% mark. Signs continued of the economy’s recovery from the pandemic recession. Mortgage buyer Freddie Mac reported Thursday that the average for the 30-year rate fell to 2.95% from 3% last week. At this time last year, the average long-term rate was 3.15%. The rate for a 15-year loan, popular among those seeking to refinance, eased to 2.27% from 2.29% last week. With historically low mortgage rates prevailing, the U.S. housing market has grown so overheated as demand outpaces supply that prices keep hitting record highs — and roughly half of all houses are now selling above their list price. Two years ago, before the pandemic struck, just a quarter of homes were selling above the sellers’ asking price, according to data from the real estate brokerage Redfin. New data out this week further illuminated the red-hot nature of the housing market: Prices rose in March at the fastest pace in more than seven years. The S&P CoreLogic Case-Shiller 20-city home price index jumped 13.3% that month compared with a year earlier — the biggest such gain since December 2013. That price surge followed a 12% year-over-year jump in February. The pandemic has encouraged more people to seek out the additional space provided by a single-family home.
sold above their list price in the sprawling metropolitan area spanning Los Angeles, Long Beach and Anaheim, California. Still, even in less pricey housing markets, bidding wars are pushing up prices. Some 41.2% of homes sold in in February in Wichita, Kansas, went above the list price, and 60.5% did in Boise, Idaho, Zillow said.
While sales of previously occupied U.S. homes slowed in April for the third straight month, the dearth of properties on the market has kept prices climbing to new highs. Last month, the U.S. median home price surged 19.1% from a year earlier to a record $341,600, according to the National Association of Realtors. Homes are being snapped
up within days. Nearly 90% of homes sold in April were on the market for less than a month, according to the NAR. Meanwhile, buyers’ increasing willingness to outbid rivals is distorting the objective measure of home values. Last month, 19% of homes had their appraised value come in below the contract
price, according to data from CoreLogic. In the same month the two previous years it was 8%. “The frequency of buyers being willing to pay more than the market data supports is increasing,” said Shawn Telford, chief appraiser at CoreLogic. When a home purchase is being financed by a bank, the lender typically requires an appraisal to make sure the estimated value of the home matches the agreed-upon price. Appraisers determine the value of a property by looking at recent sales of comparable homes. In cases when the appraised value comes in below the contract price, the buyer has to make up the difference between the sale price and the amount above what the bank is willing to lend. Regardless of whether appraisals fall short of what buyers are willing to pay, the bidding war-fueled prices at which homes are currently selling will help set the benchmark for setting home values in coming years. “The sale prices recorded now will certainly help anchor people’s ideas of, ‘OK, that’s just how much a home on this block costs, that’s how much it sold for last year,’” Tucker said. “I suspect sellers will begin to expect to receive that much if they go out and decide to sell their home next year.”
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Friday, May 28, 2021 Page 5
246-0325
KAUAI’S
real estate directory P L A C E Y O U R A D today 2 4 6 - 0 3 2 5
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KAPAHI GEM
Land Area: 32,452 sf Interior Area: 2,960 sf + 288 sf Bed/Bath: 4/4+ Loaded with upgrades! Separate living spaces. Offered for $1,225,000 MLS#649052
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Lihue-$419,000 Lot Size: 10,683 sq.ft Carol C. Cummings RB-14915 808-651-4766 MLS 646180
Lihue-$995,000 3 Bed/2.5 Ba. Interior Area: 1,503 sq.ft. Lot Size: 10,061 sq.ft. Eric N. Yama RB-10975 808-639-3414 Leah Ragsac RS-80621 808-212-4086 MLS 646389
Anahola Hanamaulu-$475,000 2 Bed/1 Ba. Interior Area: 833 sq.ft. Lot Size: 3,534 sq.ft. Ashley M. Carvalho RS-73535 808-639-9307 Mark K. Tanaka 808-639-0367 RB-9222 MLS 639731
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Anahola- $860,000 3 Bed/3 Ba Living Area: 2,436 sq.ft. Lot Size: 12,894 sq.ft. Daniel Kurisu (S) RS-79218 808-652-7302 MLS 649539 TMK: 4-4-9-2-9-1
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Poipu-$2,400,000 5 Bed.4 Ba. Interior Area: 3,433 sq.ft. Lot Size: 10,019 sq.ft. Melinda Yomen 808-482-0452 RS-56237 MLS 643808
Wailua
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Hanapepe-$769,000 4 Bed.3 Ba. Interior Area: 1,708 sq.ft. Lot Size: 7,126 sq.ft. Shelly Kaui-Carvalho RS-64829 808-652-3886 Carol Cummings RB-14915 808-651-4766 MLS 647739
Lihue-$950,000 5 Bed/4.5 Ba. Interior Area: 3,718 sq.ft. Lot Size: 10,067 sq.ft. Clifton Kukino RB-15364 808-639-1490 Jordan Kukino RS-81289 808-634-5032 MLS 643520
Poipu-$875,000 3 Bed.3 Ba. Interior Area: 1,531 sq.ft. Silvia Matsumoto RS-83333 808-634-8474 Leah Ragsac RS-80621 808-212-4086 MLS 644992
Wailua-$669,000 6 Bed/3.5 Ba. Interior Area: 2,220 sq.ft. Lot Size: 12,617 sq.ft. Jesse Fukushima RS-71180 808-482-4077 Glen Kojima RS-80593 808-651-5850 MLS 643722
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HANAPEPE HTS
SHELLY KAUI-CARVALHO RS-64829 CAROL C CUMMINGS RB-14915 Land Area: 7,216 sf (RS) ABR, CRS, SFR, SRS (RB) CRB, CRS, GRI, SFR Living Area: 1,708 sf Beds/Baths: 4/3 808-652-3886 808-651-4766 Great lock-out floor plan for extended family! Shelly@kauairealty.net kauairealty@gmail.com SOLD for $769,000 MLS# 647739
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Email: shelly@kauairealty.net • www.kauai-realty.com 2403 Ulu Maika Street • Lihue, Kauai, Hawaii 96766