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On Oahu, the median sale price of a single-family home increased in June to a new all time record of $700,000. The previous record ($685,000) was set in June '07.
Condo prices also reached a new high of $360,000. The previous record ($359,450) was set in Feb of this year.
I've noticed local rents and the military's BAH has skyrocketed since last summer too. Good for owners, not so good for new and repeat buyers. Inventory is still very low island wide and mortgage rates have come down quite a bit this year. The economy (local & national) appears to be improving too, an interesting time for real estate in Hawai'i for sure. Thoughts everyone?
Last edited by bjbennett29; 07-07-2014 at 09:46 PM..
I've noticed local rents and the military's BAH has skyrocketed since last summer too.
Thoughts everyone?
I've been quite clear for about 2 years now we are on run up on real estate and rent would continue to rise - and I've suggested to many, rent is not going down, it is going up and grab what you can get.
I see nothing stopping it right now except another 2008 global meltdown, war, or natural disaster.
Went to a bunch of single family open houses in Kailua/Kaneohe over the past week and nearly all (in decent shape) under $1m had immediate multiple offers which will obviously go over asking price after the bidding wars. Same story for quite a few homes over that price range too. There does however seem to be a few more homes popping up for sale now that we're on school break.
Just bought my first house in Hawaii - still in escrow, technically, I suppose. My wife and I started looking in January when the possibility of living in Honolulu came up and we watched, month by month, as the prices gradually crept up. Looking at the historical data on sites like Zillow was even more telling.
A lot of people urged us to rent for our first year to "figure out where we wanted to live" but to us the writing was on the wall that staying out of the market for an extra year would not be to our advantage. Prices are definitely going up right now. What we heard about the home prices in Oahu is that they tend to spike, then plateau for up to several years, then spike again etc etc. From what we understand, even in 2008 they didn't drop too much.
I keep Sales stats on my Waikiki condo building beginning with 2010 Sales. So I will share them just for the sake of those interested in such things.
I recognize this is just one building out of many and just one location out of many, the average sale price per unit has been increasing quite rapidly. Each unit in the building is the exact same sq footage, so variants would be the floor and the extent of remodelling. But each unit on average is pretty comparable.
2011 avg sale price per unit was 14% higher than 2010.
2012 avg sale price per unit was 9% higher than 2011.
2013 avg sale price per unit was 21% higher than 2012.
2014 (year to date) avg sale price per unit is 13.7% higher than 2013.
Although, my sense is that sales are slowing a little bit. Price is not dropping, but sales are slowing. I say this because the Number of sales in 2014 year to date (again, just in my specific building) are lower than in the past.
I think this is because many of the properties listed in 2014 had super jacked up list prices. The ones that have sold and closed, had prices that were still high, but more reasonable.
There are also a couple other 2014 pending sales in escrow right now and I suspect they will be consistent or slightly higher than the other 2014 sales already closed.
I don't know how this translates to the rest of the market, because it's just one small sample, but in my opinion I agree that it might represent a better option to buy something now and then transition into something different down the road a ways.
I've often wondering if there is a correlation between price spikes and visitor spikes. 2008 through 2010 had lower visitor arrivals in part because of the US downturn in the economy and the Tsunami in Japan. But that started changing and people came roaring back in 2012 & 2013. Prices started climbing again as well. So I've often wondered about if there is any real tangible correlation between the two.
I've often wondering if there is a correlation between price spikes and visitor spikes. 2008 through 2010 had lower visitor arrivals in part because of the US downturn in the economy and the Tsunami in Japan. But that started changing and people came roaring back in 2012 & 2013. Prices started climbing again as well. So I've often wondered about if there is any real tangible correlation between the two.
There is a significant correlation. When visitor arrivals are down - that translates into less jobs, not just entry level jobs but senior management jobs. Senior Managers without a job are hesitant to buy property.
In a down economy - banks are hesitant to lend. And, appraisals tend to come in low. Low appraisal may make or break the loan.
Now that we have a robust economy on Oahu - people are working - banks are lending - and that translates to higher housing pricing as demand outstrips supply from renters wanting to leave the rental market - and of course the population growing.
I keep Sales stats on my Waikiki condo building beginning with 2010 Sales. So I will share them just for the sake of those interested in such things.
I recognize this is just one building out of many and just one location out of many, the average sale price per unit has been increasing quite rapidly. Each unit in the building is the exact same sq footage, so variants would be the floor and the extent of remodelling. But each unit on average is pretty comparable.
2011 avg sale price per unit was 14% higher than 2010.
2012 avg sale price per unit was 9% higher than 2011.
2013 avg sale price per unit was 21% higher than 2012.
2014 (year to date) avg sale price per unit is 13.7% higher than 2013.
Although, my sense is that sales are slowing a little bit. Price is not dropping, but sales are slowing. I say this because the Number of sales in 2014 year to date (again, just in my specific building) are lower than in the past.
I think this is because many of the properties listed in 2014 had super jacked up list prices. The ones that have sold and closed, had prices that were still high, but more reasonable.
There are also a couple other 2014 pending sales in escrow right now and I suspect they will be consistent or slightly higher than the other 2014 sales already closed.
I don't know how this translates to the rest of the market, because it's just one small sample, but in my opinion I agree that it might represent a better option to buy something now and then transition into something different down the road a ways.
I've often wondering if there is a correlation between price spikes and visitor spikes. 2008 through 2010 had lower visitor arrivals in part because of the US downturn in the economy and the Tsunami in Japan. But that started changing and people came roaring back in 2012 & 2013. Prices started climbing again as well. So I've often wondered about if there is any real tangible correlation between the two.
I don't know of any condo prices in Waikiki that have increased 71% in value over the last 3.5 years. Your building is definitely the exception. Between 2007 and 2010 my condos in Waikiki dropped in value by an average 20-25% (peak to trough). Fast forward to today and the prices are back to where they were in 2007... maybe 5-10% higher. If my properties increased 71% in 3.5 years I'd be expecting a major pull back. Luckily we're not seeing that kind of ridiculous price growth across Waikiki.
There is definitely a correlation to real estate prices in Waikiki and tourism numbers. A lot of condos in Waikiki are placed in hotel rental pools... or are managed by companies that rent units out short term. Their property values are based on occupancy and daily/weekly/monthly rates. If rental income is high and vacancy low, the property value bumps up a bit. The owner occupancy rate in Waikiki is comparatively low so rental income fluctuations will exacerbate real estate valuations more there than other communities. Further, higher tourism numbers means more private money being injected into making building/amenity improvements thus providing gentrification in areas of Waikiki that have never benefited from it before. High tourism numbers drives Waikiki prices up disproportionately from the rest of the island. If tourism tanks, it will also have the same effect... on the downside.
What we heard about the home prices in Oahu is that they tend to spike, then plateau for up to several years, then spike again etc etc.
Sounds like you've been talking to a lot of realtors. Price corrections in recent years on Oahu have exceeded 30% and even approach as much as 40% in Makaha, Waianae, Nanakuli, Ewa Plains, Ko Olina, North Shore and other areas on the Windward side. The urban core has been the most resilient (<10-15% price correction peak to trough) because of its desirability to asian foreigners, high concentration of old money (lowest LTV on mortgages), generational gentrification (parents with little to no mortgage pass away and give property to kids, kids want to improve and renovate) and convenience/short commutes to schools, work and activities. Areas that exhibit those characteristics will continue to be the strongest, most resilient performers going into the future. Property valuation performance has been all over the place on Oahu.
Sounds like you've been talking to a lot of realtors. Price corrections in recent years on Oahu have exceeded 30% and even approach as much as 40% in Makaha, Waianae, Nanakuli, Ewa Plains, Ko Olina, North Shore and other areas on the Windward side. The urban core has been the most resilient (<10-15% price correction peak to trough) because of its desirability to asian foreigners, high concentration of old money (lowest LTV on mortgages), generational gentrification (parents with little to no mortgage pass away and give property to kids, kids want to improve and renovate) and convenience/short commutes to schools, work and activities. Areas that exhibit those characteristics will continue to be the strongest, most resilient performers going into the future. Property valuation performance has been all over the place on Oahu.
lol, we did talk to a lot of realtors....
Our hope is to live in our home until we have to start worrying about breaking our hips, so hopefully we're somewhat protected!
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