The Hawaii Real Estate Market is

Booming to New Record Highs!

Strong Housing Market Impacted by Multiple Factors

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The Oahu and outer island real estate markets in Hawaii are being driven by several highly positive long- term trends which are all occurring simultaneously. 

Some of the major influences on the real estate market in Hawaii are:  the ongoing baby boomers buying their future retirement homes; a building boom  that is unprecedented in it’s volume and scope due to major new infrastructural improvements; increased military buildup; increased investment and development of hotels, shopping centers and resorts, just to name a few.

As a result, home sales are robust and price increases are hitting greater than 25% per year in various areas.  Vacancies are low in all rental markets as inventory is being snapped up by investors and baby boomers as well as local move up buyers due to record low interest rates.  Home buyers from the mainland are using this window of opportunity to sell or refinance their homes to purchase their dream homes in paradise now before its too late.  Prices on the mainland are now almost equal to homes in Honolulu. 

With all of the new investment coming into Hawaii, coupled with the long term multi-billion dollar infrastructural and military contracts such as the Stryker, new ships, and possibly an aircraft carrier to be assigned soon, and with the massive base renovations that are now underway, the economy in Hawaii is booming!

Key Facts, Trends and Statistics

• The Oahu housing market sizzled in 2003 , as new record highs were set in number of sales and total price volume.  The median price for single-family homes rose 14% over that of 2002.  Likewise, condominium prices rose 12.5%.  11,326 sales were recorded in 2003 totalling $3.5 billion.  Realtors Association President Mary Begier stated: “The buyers are coming from a lot of places – our own local markets, entry-level buyers, move-up buyers.  We also have plenty of people from out-of-town.”

• Big Island, Kauai and Maui home resales also surged in 2003.  About half of  all home sales were outside Oahu.  Here, the Big Island led the way in single-family home and condominium sales, with major price appreciation on the Hilo side.

• As of early 2004, Oahu’s hot housing market showed no signs of slowing down.  February’s single-family homes sales figure was the highest ever for that month, as median prices were up $60,000 from February, 2003.  Likewise, the number of condominiums sold increased by 7%, while median prices were up $21,000.

• Hawaii’s booming real estate market will continue in 2004.  Prognosis among leading experts is very positive.  The upswing in residential, commercial and industrial activity will also benefit local businesses.  A recent 2004 Employment Outlook Survey for Honolulu indicated that 30 percent of firms plan to increase hiring, as opposed to only 17% in 2003.  Jeffrey Hall, research director for CB Richard Ellis Hawaii stated: “In our economy, 2004 will be the best year in Hawaii for 20 years.”

• Hawaii’s economy has outperformed the rest of the U.S. for the last three years.  Recent statistics place Hawaii’s job growth as the fourth best in the nation.  “We don’t see anything slowing down,” said Chief Executive Bill Chee of  The Prudential Locations LLC in Honolulu.  This bright outlook will be further bolstered by the Army’s $7 billion construction contract that will create thousands of jobs and unleash “an avalanche of cash,” beginning in mid-2004.

• Hawaii is becoming increasingly attractive to investors.  Along with its strong housing market and surging economy, Hawaii’s isolated location makes it seem safer from potential terrorist threats in this post-911 world.  Other global trends favor Hawaii as a site for companies looking to set up new offices, especially as Pacific Rim trade increases with growing Asian economies.  Here too, corporations receive a “positive signal” from Hawaii’s tax incentives for technology businesses.