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James Joyce
  • Investor
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Honolulu Condo - Buy now or wait?

James Joyce
  • Investor
Posted Apr 3 2020, 16:42

Hi everyone! I'm currently renting an apartment in Downtown Honolulu and have been looking to purchase a 2-3 BR condo in the Kaka'ako / Ala Moana / Waikiki area, somewhere in the range of $450k-600k (I'm already pre-approved up to $700k at ~2.75%). My plan is to house-hack it for a couple years then rent it out when I leave Oahu, holding onto it for at least 5 years (but potentially longer) before selling. I already made an offer on a 2BR in Kaka'ako last week, and the sellers dropped the price significantly in their counter-offer, but I ultimately walked away from the deal after they were unwilling to drop further.

I have heard that the Hawaii RE market is resilient, but I have to imagine that the economic uncertainty and impending recession due to Covid-19 will drive prices down to some extent in the short-term. How long will it take the new economic reality to be reflected in the Honolulu RE market? Any prediction on how much prices may drop? I am eager to buy, but also patient and willing to wait if doing so will mean lower prices. I'm reluctant to "grab a falling knife," but also know that perfectly timing any market is impossible. 

My plan right now is to make low-ball (but not insanely low) offers on properties currently listed for sale and see who's panicking and eager to sell. I know it may take a while but I'm not in any rush because I think time is on my side (and my lease on my current apartment doesn't end until May 31 anyway). Any thoughts on that strategy? How low (relative to pre-covid market value) is low enough to reasonably protect myself against a short-term downturn in rents and resale values?

I'd love to hear any and all thoughts and advice! I'm brand new to real estate so I appreciate any help I can get. Thank you!

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