O’ahu 2025 Mid-Year Update
Continued hope for affordability
Although the June YTD stats won’t be out for a couple weeks, I wanted to give you a snapshot how the 2025 O’ahu real estate market is shaping up.
TL:DR
We are entering the fourth year of higher mortgage interest rates affecting affordability. Real estate transactions continue at a slow pace.
Inventory is increasing, especially for condos. Condos are becoming more and more a buyer’s market. Prices are flat.
Single family homes (SFH) are stable, in a balanced market. Prices continue to climb. We still see some sellers receive multiple offers when they launch with a reasonable price.
Mortgage rates persist in the 6%-7% range
Affordability and the economic outlook have suffered so far in 2025 due to the new administration’s volatility around tariffs and trade wars, and the downgrading of the U.S. credit rating. Investors are putting their money in safer, longer-term vehicles. As a result, the 10-year treasury yields have risen—and mortgage rates with it. The U.S. coming to Israel’s aid against Iran a few days ago brings even more uncertainty as we enter the second half of the year.
Here’s a review of mortgage rates from 2020 to now (see this page I used for reference):
The summer of 2020 (COVID) and throughout 2021, rates were crazy low in the 2-3% range.
Inflation rose and the Fed responded by increasing their short-term benchmark rate starting in the spring of 2022.
Mortgage interest rates climbed steadily over 3%, then 4%, then 5%. By the fall 2022, the weekly average rates were firmly over 6%, then 7%.
2023 and 2024 the rates never went below 6.09%; the highest point was 7.79%.
So far in 2025, the range has been between 6.62% and 7.04%.
Higher rates, less affordability, fewer sales
At the start of the last three years—2023, 2024, and 2025—we real estate agents have hoped and prayed for a new and better year. Our collective prayers have not been answered. The past three years have seen fewer sales and 2025 is more of the same.
The chart below shows a direct correlation between mortgage rates and real estate activity. I pulled data published by the Honolulu Board of Realtors from May 2019 to May 2025:
The yellow shading is the period of bargain rates during the pandemic, roughly between July 2020 through February 2022. Moving right from the yellow columns to now, interest rates, active inventory, and days on market all increase. Total sales decrease. The biggest swings are in the condo active listings and days on market (red font with blue background).
Less sales, less agents
When we agents meet up these days, we check in with each other, “How’s your business been? Are you surviving?” With the decrease in the number of sales, many real estate agents and loan officers have exited the business or had to find part-time jobs. I have also suffered: my sales went from a high in 2020 of 52 sales, to just 18 in 2024. But I am OK!
I am very thankful for 7 closings so far this year and 5 escrows currently. I thank God for always providing “my daily bread.” I’m doing OK also because I’ve kept my expenses low—a real estate photographer told me recently he’s never seen a top agent driving a Honda. I didn’t know if I should be flattered or embarrassed.
I moved brokerages last November partly so I could better help my buyers by charging less, or possibly nothing at all. (Read about that decision here.) One of my current escrows is my first pro bono client. My buyer client and I are working with a seller who is not willing to pay my commission—the first such seller I’ve encountered since the August 2024 industry commission changes.
“Priced out of Paradise”
Do you remember this American Idol winner from 2023? Even if you remember Iam Tongi well, his audition video is worth watching again! I remember tearing up as he told his family’s story of getting “priced out of paradise.” Did you know there are now more native Hawaiians living on the mainland than in Hawaii?
In 2020, I listed 40 homes and saw firsthand the insane bidding wars my sellers enjoyed. I saw many homes go to investors and non-local buyers with all- or majority-cash offers. They were experienced real estate buyers who felt comfortable waiving home inspections and low-appraisal negotiations. A wider disparity between the haves and have nots has really grown during and since the pandemic.
Many local buyers with 5, 10, and even 20% cash down were often the unfortunate losers of the bidding wars. These are the buyers who continue to be sidelined these past three years, waiting and hoping to someday be able to afford a home. Some have moved away, priced out of paradise. I’ve said goodbye to many friends as I helped them sell their homes and relocate to the mainland.
Never give up, never lose hope
To all my buyers—this agent is full of hope! I am rooting for us and praying market conditions improve. I did a quick analysis of my last ten listings sold (from the end of 2024 to now) and seven of them were sold to local buyers. Also, five of the last seven buyers I represented were locals. This 70% is huge and hopeful!
Buyers, there are opportunities with the softening market—especially with condos—as long as we carefully research any pitfalls such as rising HOA fees. With single family homes, let’s be quick and vigilant to see new listings—the best homes are still seeing multiple offers in the first week or two. Let’s figure out together what affordable means for you and your ohana.
Sellers, the stats and trends here are averages. Let’s drill down to analyze the micro trends in your specific building and neighborhood. Pricing correctly is key—gone are the pandemic days where sellers can be aggressive with the list price—and still get over-asking. I recently had a seller wisely choose a reasonable list price—and we got two offers in the first week. This does not mean we underpriced the home—it meant buyers finally got excited to pull the trigger for a correctly priced listing!
As far as I can tell from following his Instagram, Iam Tongi has yet to purchase a home on O’ahu. If you know him, could you please let him know I’d love to help him and his ohana get back to O’ahu! It is my mission and ministry to help.
How has your 2025 been so far? I’d love to catch up! Take care and God bless!