18 West Hawaii Real Estate | July 6, 2016 Relentless supply constraints and Existing-home sales on course for best year since 2006 home price growth outpacing wages are testing the patience of homebuyers this year, but existing-home sales are still on track to come in at their highest pace since 2006, according to a recent economic forecast forum at the 2016 Realtors Legislative Meeting & Trade Expo. Lawrence Yun, chief economist of the National Association of Realtors, presented his midyear economic and housing forecast and was joined onstage by U.S. Sen. Elizabeth Warren (D-Mass.). Senator Warren explained with purpose the growing burden repaying student loan debt is having on young adults, the housing market and the overall U.S. economy. According to Yun, monthly existinghome sales were uneven in the first quarter but still came in at a seasonally adjusted annual rate slightly higher (5.29 million) than last year’s overall annual pace (5.26 million). Demand has mostly remained strong – especially in the top job-producing metro areas – and is being upheld by mortgage rates near three-year lows and the 14 million jobs gained since 2010. “The housing market continues to COLDWELL BANKER MARYL REALTY Kailua Kona • Queen Kaahumanu & Henry St. #203 Offi ce # (808) 331-8200 / Toll-Free # (800) 845-7559 View Current Listings listings at CBMaryl.com Offi ce License # RB-16961 KAAUHUHU HOMESTEAD - HAWI Snapshot of old Hawaii with nearly 7 acres. Spectacular ocean views from everywhere. MLS #288314 $695,000 Robert D. Hudspeth, RS-55464 (808) 896-3066 WAIKOLOA VILLAGE 7 bedrooms, 7.5 bath “Castle on the Hill”. Large, 3 story luxury home with amazing views. MLS #295389 $999,900 Dylan Nonaka RS-64242 (808) 937-8382 PUA MAU GARDENS 5 separate “pod” buildings & over 45 acres of gardens. Very special property. Visit: PuaMau.com for more info. MLS #293768 $3,999,000 Buddy Norwood, RB-11909 (808) 896-0144 KOMOHANA GARDENS - HILO 3 bedroom, 2 bath home in great neighborhood. Priced very affordably because it needs a little TLC. Easy to see! MLS #296930 $339,000 Dylan Nonaka RS-64242 (808) 937-8382 SUNSET RIDGE, WAIKOLOA Brand-new, 3 bed / 2 bath home with stucco exterior, open floor plan, granite, tile & large covered lanai. MLS #282593 $545,000 Leanna Flem, RS-61159 (808) 895-3157 KONA VIEW ESTATES Large, panoramic home with ocean views. 3 separate bedroom suites, 3 car garage, surrounding gardens & pool. MLS #290922 $1,999,950 Karen Ostlie, RS-60256 (808) 937-1174 KOLEA FARM 7.8 acres with coastline views, Kona coffee trees and tons of fruit trees. 2 bed / 1 bath home in gated community. MLS #294529 $819,000 Kona Carla Womack, RS-61019 (808) 896-6768 ALII COVE 2 bedroom, 2 bath, newer condo in complex with pool, spa & fitness center. Wonderful location to enjoy Kona sunsets! MLS #290555 $379,900 Kona Carla Womack, RS-61019 (808) 896-6768 KONA PACIFIC CONDO Spacious corner unit in popular “C” Building with ocean views. Walking distance to the beach. Turnkey, furnished. MLS #293094 $414,000 Kona Carla Womack, RS-61019 (808) 896-6768 KEALAKEKUA INN 4 suites with 3/4 baths upstairs and a master suite with hot tub downstairs. All 5 rooms currently produce rental income. MLS #293239 $689,000 Dylan Nonaka RS-64242 (808) 937-8382 expand at a moderate pace in spite of the fact that home prices are rising too fast in some areas because of insufficient supply fueled by the grossly inadequate number of new single-family homes being constructed,” said Yun. “The good news is that pending sales in recent months have remained stable and should support a modest gain in home sales heading into the summer.” Yun forecasts existing sales to finish 2016 at a pace of around 5.40 million – the best year since 2006 (6.48 million). After accelerating to 6.8 percent in 2015, the national median existinghome price is forecast slightly moderate to between 4 and 5 percent this year. During her remarks, Senator Warren applauded Realtors for their role in helping build America’s middle class through homeownership. Unfortunately, Warren explained, this path to economic security is being threatened by the seven out of 10 college graduates that need to borrow thousands of dollars to attend college and then spend countless years afterwards repaying the debt at high interest rates. “Student debt is crushing young people, it’s hurting the nation’s economy and delaying the opportunity for many to buy their first home,” said Warren, who cited NAR’s 2016 Profile of Home Buyers and data on the percent share of first-time buyers remaining at its lowest point in nearly three decades (32 percent). “Every monthly payment going to reducing their student debt could instead be money going towards saving for a down payment on a house.” On the topic of first-time buyers, Yun remarked that their ongoing absence is the missing link to a full housing recovery; this is, amazingly, during a time when conditions are ripe for a larger share of them buying homes. Job growth has been strong for multiple years, rents have soared in many areas and mortgage rates are historically low. Unfortunately, a multitude of factors such as increasing home prices amidst flat wage growth, the lack of available starter homes and repaying student loan debt is thwarting many young would-be buyers. “Spectacularly low mortgage rates mean today’s prospective homebuyers are the luckiest in a generation but the unluckiest in actually becoming homeowners because of the roadblocks hampering their ability to buy,” added Yun. Warren concluded her remarks by urging Congress to pass the “Bank on Students Emergency Loan Refinancing Act,” which would give a much-needed break to student debt borrowers by giving them a chance to refinance their federal and private student loan debt at the same low rates offered to new borrowers in the federal student loan program. Yun on inventory shortages, home prices and unspectacular economic growth Although contract signings nationally have held steady for several consecutive months, Yun said regional differences are beginning to appear in places where home prices have appreciated the fastest – specifically in parts of the South and in the West. Although data from the Realtors Confidence shows that home buyer traffic is still strong, demand is somewhat weakening from a lack of available inventory and the subsequent affordability pressures it’s putting on a large segment of would-be buyers. “Homebuilders need to significantly ramp up production so that more existing homeowners can trade-up and list their home for sale,” added Yun. “Otherwise, inventory shortages will continue and demand could soften even more in some areas as a greater number of buyers are unable to find homes at affordable prices.”
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