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.
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
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.
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.
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
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