Suzanne  Smith

 

Principal  Broker, Realtor

Suzanne  Smith  Associates

 
 
     

Market  Analysis

 

State  of  Hawaii

Due to falling loan interest rates, a gradual but continuing new housing shortage, and increased investment, demand for Hawaii real estate had gone up drastically until 2007 throughout the state.  Whether of luxury homes, single family homes or condominiums, all islands had seen greatly increased prices (in some areas by more than 50%) after loan interest rates hit (then) record lows of under 6% over 10 years ago.

As a state where the land that is available for private ownership and new construction are in short supply, prices had not gone down drastically (as some places on the mainland that had experienced a “bursting of the housing bubble”), even with the sub prime loan problems. This year, prices which had leveled off, have been gradually increasing.

For the first time in 37 years, the 30-year mortgage loan rate has gone below 4%, so some residential sectors should see higher sales volume in coming months.  Hawaii has a strong banking system, with credit available and money to lend.  This will offer incentives for "fence sitter" Buyers to make that purchase, or refinance existing home mortgages.

Today's buyers are more aware of market conditions, and lenders' credit requirements are more demanding.  However, it is still a good time to buy or sell.

 

 

Oahu

 

The most populated island in the Hawaiian chain of eight major islands had experienced a dramatic increase in housing prices in the late 1980s. Continuing construction of new homes through the mid 1990s had seemed to glut the market and thereafter prices flattened. But a gradual population increase had led to a scarcity of housing in recent years, and when interest rates dropped dramatically in 2005, prices jumped.

The market has cooled in the previous 8 years, but now there is a lesser inventory of properties for sale.  Since people still need places to live, there is still demand. More stringent requirements from Lenders make obtaining financing a more demanding process for Buyers today.

 

 

Honolulu

 

Although new single family home construction in town is down (with most new construction in communities outside of Honolulu), several high rise properties are planned for the future.  As the international crossroads of the Pacific for air travel and shipping, and the center of commerce, tourism, and government administration for the state, properties in Honolulu’s housing market continue to be in demand. 

The current market seems to be more balanced and realistic to both Buyer and Seller today.  Now more than before, we see that the best properties sell sooner, and overpriced properties may sit.  Accurate pricing is key.

 

Waikiki

The Outrigger Hotel and Embassy Suites revitalization of Lewers Street in the heart of Waikiki, and the construction of the new Trump Tower, Watermark, and Allure luxury condominiums, continue to enhance Waikiki’s value and appeal to a more upscale clientele.   We already have the world’s best known resort beach (Waikiki) and resort landmark (Diamond Head), as well as 365 days of warm weather to go with crystal seas, verdant greenery, and spectacular sunsets.  This has driven purchasing by mainland and off shore buyers for decades.

Waikiki is still in demand for vacation condominiums or investment properties.  Baby boomers still want to purchase for their retirement.  Working people and retirees also like the convenience and amenities. Sales prices have been improving gradually, and we expect them to continue to improve as the economy improves.

 

 

 

 

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