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2007 Hawaii Real Estate Forecast
Buy or sell with me and receive 1 year Home Warranty for FREE
To receive e-mail updates of NEW or SOLD listings in any building or neighborhood on the island na.roud@pruhawaii.com
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The Oahu single family home market finished 2006 with the median price at $620,000, up 6.8% from the year previous.
This is a respectable price gain, although a slower appreciation rate than in recent years.
Median home prices increased in every area of the island in 2006, with the exception of East Honolulu where annual
median prices dropped 5.0%.
The East Honolulu area stretches from Waialae to Kuliouou, and includes luxury/oceanfront neighborhoods like
Hawaii Loa Ridge and Niu Beach as well as inland valley neighborhoods
such as Aina Haina, Niu Valley and Kuliouou. East Honolulu area
Although the region overall saw a drop in median price, each individual neighborhood performed differently.
For example, high end neighborhoods
in East Honolulu had 33% fewer sales in
2006, while moderately-priced neighborhoods collectively had 2% more. Some neighborhoods such as Hawaii Loa Ridge,
saw tremendous increases in median
price while others saw very
little sales activity and experienced moderate price appreciation.
2007 looks to be a transition year for real estate in Hawaii. Although we expect the rate at which home prices increase to slow,
we still anticipate single-digit price
appreciation for the
Hawaii market overall. Home price appreciation will fluctuate by area of the island, with those neighborhoods having a more universal appeal continuing
to maintain value and even show increases.
Some neighborhoods may begin to weaken this year, but not significantly.
We continue to believe that Hawaii real estate is a terrific long-term investment and one that buyers and sellers can feel confident to be a part of.
Long term, Hawaii's unique factors such as a healthy tourist economy, strong military development and the lack of developable land,
combined with low interest rates and the buying power of
baby boomers continue to set the foundation for stability in Hawaii's real estate market for years to come.Here are some important trends to consider:
REMEMBER * Home prices have peaked for this cycle.
While 2006 median prices for Oahu are higher than 2005, the 4th quarter 2006 shows that prices have leveled off.
No big price decreases have been are revealed - so far. It's the number of sales that has gone down dramatically and dominated the headlines.
REMEMBER * The housing supply remains tight in Hawaii.
There are many geographic and regulatory restrictions on building new homes. Also, the inventory of homes for sale has not gone up, as expected.
Compared to most other urban areas, Honolulu home prices and supply have less "elasticity" than all but one of the tracked areas.
Basically, there is no land here to "stretch" into unlike Dallas or Phoenix with vast undeveloped tracts just outside the urban areas.
MRI is rising in almost every price range. Interestingly, the $1.0-$1.9 million price
range has only increased 11% and in the $5.0-$9.9 million price range, MRI has dropped 41%.
Remaining Inventory is rising, reflecting Oahu’s changing market conditions with a slower sales pace and a higher number of homes listed for sale.
MRI in the $1 Million+ price range is only 14% higher than last year, showing stronger supply-demand conditions than the rest of the market.
Real estate sales activity on Oahu in the $1 million-plus market is returning to a more stable and sustainable pace.
The number of resales has declined, however home sale prices have continued
an upward trend. Prices should flatten out in the coming months, but are not expected to drop significantly as the market returns to more normal conditions.
With this shift in the market, high-end neighborhoods across the island are taking longer to sell, requiring sellers to avoid overpricing and pay close attention
to comparably
priced properties that
have recently sold. Sellers should also expect to take extra steps to sell their homes, such as making cosmetic improvements or offering concessions to
buyers. Sellers of luxury homes
who price their properties correctly and go the extra mile to prepare and market their home continue to be successful in this market.
Low interest rates, a stable economy and more inventory a
vailable still provide both buyers and sellers excellent opportunities in real estate.
Because every Oahu neighborhood, particularly those that are high-end, is unique and has its own distinct conditions and activity, it is important to look at each specific
neighborhood you live in or are interested in to get an accurate picture of what is happening.
Data for Oahu high-end neighborhoods are available upon request. These comprehensive graphs illustrate the activity of home
Sales in several high-end neighborhoods in
the Kahala area, icluding but not limited to Kahala, black point, diamond head, Hawaii loa ridge, waialae golf course,
niu beach areas; Hawaii Kai Area, including but not limited to
Portlock, na pali haweo, anchorage, queen’s gate, luna kai, koko kai
Whether you are thinking of buying, selling or financing real estate
I'd love to hear from you!
Your Oahu Real Estate Consultant for Life!
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