How The Fed's Recent Rate Cut Could Impact the Oahu Real Estate Market: What Sellers Should Know

The Federal Reserve cut interest rates by 0.25% in September 2024, lowering the interest rate target to a range of 4.75% to 5%. This rate cut is expected to have significant implications for the real estate market, especially here in Oahu. Lower interest rates often spark increased buyer activity, higher home values and greater investor interest. And with another potential rate cut expected later this year, now may be the perfect time to sell your home. Here’s a breakdown of how lower interest rates affect the Oahu real estate market and why selling your home with a Realtor can make all the difference.

Expect Increased Buyer Demand

With this rate cut, mortgage rates are likely to follow suit, making it more affordable for buyers to finance a home purchases. This affordability boost typically results in more buyers entering the market, increasing competition for available properties. For sellers, this means more potential buyers, quicker offers and potentially higher sale prices. Single-family homes in Oahu, which are already in high demand, are poised to see increased buyer interest. If another rate cut follows later this year, the demand could rise even further, benefiting sellers who act now.

Rising Property Values Are Likely

Lower interest rates usually lead to increased buyer activity, which can drive property values higher, especially in areas like Oahu where housing inventory is limited. With more buyers competing for a finite number of homes, prices can climb as bidding wars become more common. If you’re considering selling, this month's rate cut could be your opportunity to capitalize on rising property values. While single-family homes are likely to see strong demand, condos may also experience renewed interest as buyers re-enter the market following the Fed's decision.

Investors Re-Enter the Market

Investors often take advantage of lower interest rates to purchase rental properties, vacation homes or multi-family units. With September's rate cut, expect to see more investors looking for opportunities in Oahu’s real estate market. If you're selling a property that appeals to investors—such as a condo in a prime location or a home with rental income potential—this could attract more interest. Highlighting the long-term return on investment for potential buyers can make your property stand out.

Bidding Wars Become More Likely

As more buyers enter the market due to lower interest rates, bidding wars can become more  common—especially for well-priced homes in competitive Oahu neighborhoods. Multiple offers can drive up a home’s final sale price, allowing sellers to get more than the asking price, if the home is marketed effectively. Partnering with an experienced Realtor who understands local market dynamics can help to attract competitive offers and potentially spark a bidding war.

Selling with a Realtor Can Maximize Your Profit

Selling a home can be an emotional and complex process, and today’s market conditions add an extra layer of complexity. According to a study by Clever, sellers who worked with a real estate agent earned an average of $46,603 more in profit compared to those who sold without an agent. The study also revealed that 77 percent of those who used an agent were satisfied with the selling process, compared to only 58 percent of those who did not. The sellers who didn’t use an agent often had regrets, for example:

• 25 percent wished they received more offers. 
• 23 percent said their home took longer to sell than expected. 
• 23 percent wished they could have negotiated better. 
• 23 percent paid more in repair credits and closing costs than anticipated. 
• 21 percent had one or more offers fall through. 

Selling with a Realtor not only increases the chance of getting more offers but also reduces the likelihood of costly regrets and stress. Nearly half of sellers who didn’t use an agent reported crying at some point during the home-selling process, while those who worked with an agent were significantly less likely to feel overwhelmed by the experience.

Stay Informed with Hawaii Mortgage Group’s Latest Rates

Staying up to date on mortgage rates is critical. For the most accurate and current mortgage rate information, visit Hawaii Mortgage Group's website. They provide real-time insights into local mortgage rates, helping you plan your next steps in the home-buying or selling process.

Learn More at Locations’ Free Seminars for First-Time Homebuyers and Investors

Whether you’re selling your home or considering buying in today’s market, Locations offers free seminars for first-time homebuyers and investors. Our seminars provide expert insights into the Oahu real estate market, financing options and strategies for success. Register for an upcoming seminar today, and learn how to navigate the current real estate landscape with confidence.