With the highest median home price of any state, at $522,000, Hawaii’s rebounding real estate market should even out in the near future, according to experts.
Financial and property information provider Corelogic predicts Hawaii home prices will rise 3.2 percent between the first quarter of next year and the first quarter of 2014. That ranks the state No. 28 among all states. The value of a home in Hawaii is predicted to rise 3 percent on an annualized basis between the first quarter of 2012 and the first quarter of 2017, only the 35th highest increase among all states.
In the mean time, Hawaii Realtors are making hay while the sun shines. “Hawaii’s real estate market is just booming, and investors and first-time buyers should really take advantage of this,” noted Dave Dickey, Century 21 All Islands Realtor Associate and Internet Real Estate Specialist. “A lot of investors are just coming in with cash, and buying up multiple properties because home prices have become more reasonable. I know of one Japanese national who bought 100 properties. Compared to the housing slump of 2008, 2013’s market is on the rebound, and it’s good for both buyers (because home prices are evening out now) and sellers (because there’s a lot of activity in the market due to the lower prices).”
According to the Honolulu Board of Realtors, January 2013 sales of single-family homes and condominiums increased almost 30 percent and almost 6 percent, respectively, compared to January 2012. The median price in January of a single-family home was $595,000, and $315,000 for a condominium — a decrease of 3.9 percent and an increase of 3.3 percent, respectively, from the previous month. Yet sales of single-family homes and condominiums were accepted at a faster pace in January, compared to a year ago.
Additionally, current mortage rates are at a 60-year low, allowing prospective buyers to finance new homes or refinance existing mortgages.
In general, Hawaii’s property market has been more robust than the rest of the nation’s. Even after the recent housing crisis, Hawaii bounced back faster than other states primarily due to its geographical isolation, but also because most of Hawaii is considered prime real estate.
“Overall, January’s numbers are good, with sales of single-family homes and condominiums continuing to be strong,” said Kevin Miyama, president of the Honolulu Board of Realtors. “The median sales price for single-family homes dropped due to the higher volume of sales this year over last in the lower price ranges. This means there were fewer high-priced homes sold compared to the mid- and low-priced, which bumped the median price down, due to the high number of first-time homebuyers getting into the market.
“There is a lot of activity in the market and we’re optimistic low interest rates and reasonable prices will continue to fuel the positive trend we’ve been seeing these past few months.”
In February of 2013, Hawaii saw single-family home prices rise 4 percent over the previous month, and 15 percent over the previous year. January and February are typically the two lowest months of the year in terms of sales activity.
The Hawaii Department of Business, Economic Development, and Tourism released a report in February indicating that the state should see stronger economic growth in 2013, with the GDP expected to increase by 2.6 percent, followed by an additional 2.5 percent in 2014.
The increase in the state’s real GDP, in 2005 dollars, would be a full percentage point higher than the 1.6 percent growth in real GDP the state saw in 2012, and nearly 3 percentage points higher than the negative 0.2 percent recorded for 2011.
“We are encouraged by the continued expansion in our visitor industry and the recovery in the construction and real estate sectors,” DBEDT Director Richard C. Lim said in a statement. “This positive forecast is particularly striking, given our decision to be somewhat conservative relative to other forecast models, taking into consideration several unknown variables down the road, like the impact of potential federal budget cuts.”
An article published in Pacific Business News in March (“Hot streak continues for Oahu condo market, single-family home sales dip slightly”) reports that, according to the Honolulu Board of Realtors, “Oahu’s condominium market continued its hot streak in February, with sales increasing by 23 percent and prices rising 8 percent compared to the same month a year ago.”
The article continued, “the median price of an Oahu condo rose to $340,000 last month, from $315,000 in February 2012. That was based on sales of 279 condo units last month, compared to 227 units sold in February 2012. Single-family home sales, meanwhile, declined 7 percent to 201 sales, from 217 sales in February 2012. The median price of a single-family home in February was $600,000, down 4 percent from $625,000 in February 2012.”
Kevin Miyama, president of the Honolulu Board of Realtors, was quoted as saying, “these numbers aren’t all that surprising, given that February is typically a down month in Honolulu. We anticipate the numbers will start to climb from now until July, which is the high point in the market.”
The article pointed to other measures of the Honolulu real estate marketing, including inventory. “There were 2.3 months of inventory for single-family homes, 55 percent lower than the 5.1 months of inventory remaining in February 2012,” it reads in part. “The 2.6 months of inventory for condos in February represented a 51 percent drop from a year ago, when there were 5.3 months of inventory. The median number of days it took for a single-family home to sell in February also dropped 22 percent, to 25 days, from 32 days a year ago, while the median days on market for condos fell 21 percent to 34 days, from 43 days a year ago.”