The 10-Year Real Estate Rule: Why Waiting is a Bad Idea in 2026!

So what is the state of the real estate industry here in 2026? As we're getting ready to start the fourth quarter, what does the outlook look like? I'm going to tell you that by looking back coming up next. Hey everyone, Dan Palomino here from KW Big Island and the Hawaii team. While I was in San Antonio, Texas in the middle of August for Keller Williams Mega Camp, and that is for mega producing agents. There's about 5,000 to 8,000 agents that go to Austin and San Antonio for this annual conference. And you get to connect, and you get to network, and you get to learn a lot and find out about trends. But almost every year at this conference, they do a state of the industry presentation. And there's, you know, 50, 60 slides. What I did here today is I pulled out the most important slides. And based on these slides, and we can see what happened the previous eight months of the year, we can kind of get an idea of what's going to happen going forward. So I thought for all of you who like data and want to know about where the industry is going, this would be a great a few slides for us to take a look at. So I'm going to share my screen with you here. All right, here we go. Home sales. Obviously, you see this big number here at 6.1. That was 2021, when all you had to do was fog a mirror, and you could sell a house. Now, we're, you know, and since then, basically for five years, you've been seeing the number of sales come down. Now, while you've seen the number of sales come down, what you haven't seen is the price of homes come down. And so we're going to get to that in a second. But you'll see in 22, about 5 million homes were sold in the United States. And then for 23, 24, 25, and 26, we've just been stuck at the same 4.1. The question that's on everybody's mind is how long can that last? Well, it just depends. I mean, are you a disciple of the seven-year cycles? If you are, then you think it's probably going to last for another three more years before it bounces back. We can debate all kinds of different theories about when it's going to go back. But one thing we know for sure is it's probably not going to get worse, and it really only has nowhere to go but up. If you look at home sales monthly, keep in mind this is very seasonal, and it's seasonal for the United States. This is not seasonal for Hawaii. So while you see homes, you know, being sold in different months, what you need to know about Hawaii is that our season starts at Thanksgiving and goes through the end of April. That is our high season. That's when we sell most of the home. If you're a real estate agent on this island and you're not making 60 or 70% of your income from Thanksgiving to April, you're going to be in trouble the rest of the year. But, you know, one of the things that happened was, at least here on the island, is we had an extremely slow first quarter, very slow first quarter. And then we had our best second quarter we've had in forever. And some of that bears out when you're looking at these numbers. You see the teal is 2026 and the purple is 2025. You can see the numbers jump up here in the second quarter. And so we trended along with the rest of the United States. Now they're saying that we're going to have a great end to the year, and I don't know if that's going to be true. We'll see. I love the home prices slide. This is one of my favorite slides because it goes all the way back to 1990. And you'll see here that the average trend line across the United States, average appreciation across the U.S. on a yearly basis is 5.4. We've been above that average trend line all the way back to 2021, right? We were just below it in 2020. And then since 21, the average price has been going up, and it's been going up well above the 5.4% average. This is why at the beginning of the video, I said, you've seen the number of sales reduce, but not the pricing, right? The appreciation continues to go up, and as you can see here, we're going to be, even in 26 with 4.1 million homes sold, we're going to be well above the 5.4% trend line. This is home prices monthly, again, very seasonal, but it does follow the pattern that we saw across the United States, which was extremely slow first quarter, record second quarter. Look at price, homes of prices in the second quarter jumping up. They're the ones in teal. And then it looks like it's going to level off here and maybe decline a little bit as we go into December. So if you're a buyer, you're probably targeting the fourth quarter for an opportunity with prices coming down. Now, how many homes in the United States are having price reductions? Great point. You'll notice that this goes back to January of 21. The teal line are non-luxury homes, and the gold line is luxury homes. And so if we're looking at July of 26, about a quarter of the luxury homes in the United States had a price reduction on the non-luxury, about a third 32, 33% had price reductions. And this is all over the board, right? I mean, over here back in January of 26, not a lot of price reductions, very low somewhere in that 13 to only 14%. But since then it's jumped up because home sales have slowed Home prices, new versus existing. Again, the gold is existing homes. The teal is new homes. They're not very far off, about $20,000 apart, right? With existing homes being slightly more expensive than new homes. And that's because builders produce a lot of homes. They have a lot of inventory. They've got to drop the prices. They've got to get the inventory off the books. And so new homes will always sit slightly under existing homes. Inventory monthly. I think you can kind of see this in your respective market. We can kind of see it here on the big island, but you'll see where we are now. August of 26 is teal. We've got the highest amount of inventory. Just last week, I did a video telling people that we had 76 properties for sale, just in two resorts, just in Waikoloa Beach and just in Montelani. That was a ton of properties for sale for just those two resorts. And we're seeing that as a trend like the rest of the country. Days on market. Interesting here that, you know, the days on market are not huge. In the beginning of the year, when we had a very, very slow time, they were staying on the market longer. They came off really fast when everyone was buying in the second quarter, and they're slowly creeping up. And the reason why they're projecting, you know, 39 days on market in December is because December is the holidays. And generally, there's not a lot of people out buying homes. Mortgage rates. So September of 26, they were sitting at 7.1. We've been watching them bounce all over the place. But the important thing for you to know is that mortgage rates follow the 10-year treasury. So watch the 10-year treasury really, really close. It's been bumping up against 5%. Hasn't gone over. It's been sitting just under 5%. And we haven't hit 5% in the 10-year treasury in quite a long time. But the way mortgage rates go is tied directly to the 10-year treasury, the 10-year T-note. So follow the treasury note closely, and you'll know where mortgage rates are going. New home sales been pretty consistent in the teal across the board, right? And then these are in the thousands. So around 600,000 as of July. But staying pretty much in the 600s, they suspect that new home inventory is going to go way up before the end of the year as builders complete stuff before the winter. And that should bring down new home prices considerably. And then this is what I was talking about on the U.S. treasury yields. See where the teal is here? This is the 10-year treasury note sitting just under 5%. And that's the direct correlation between, you know, you can see the graph. When the T-note goes up, so do mortgage rates. All right. I hope that was some useful information for you. If at any time you want to talk about the market, is it the right time to sell? Is it the right time to buy? Should I invest? Give me a call. I'd love to talk to you. Call me on my cell phone. 808-987-3306. And here's the thing. The person that was giving this presentation said to everybody in the room, raise your hand if you wish you would have purchased all the real estate that you saw 10 years ago. Everybody raised their hand in the room. Of course, they would raise their hand in the room. And that's because 10 years ago, the prices were unbelievable. And the prices just keep going like this. That's the answer. Even if you buy today, 5 years from now, you're going to be delighted that you bought today. 10 years from now, you're going to be delighted that you bought today because prices are just going to continue to go up in perpetuity. I think about some of the deals that I lost out on. I think about the $350,000 condo that I didn't pick up at Halikai when I had the chance. I think it was an 05, right? And that thing is worth, you know, 1.5, 1.6. I think about the $700,000 condo I could have bought in the villages. And now that is worth $2 million. There's a lot of these stories. So the answer is, when the question comes up, is it the right time? Is it a good time to buy? It's always a good time to buy for the right piece of real estate. All right, that's my pitch. I look forward to talking to you. And until we talk again, aloha.