MauiLifeStyleBlog

Hawaii

Empowered by a strong high-end market and few foreclosures, the Hawaii real estate market has not caught the national real estate recession. While Hawaiians see daily news reports of falling home prices on the mainland, they have defied gravity.

Home and condo sales have slowed slightly in Hawaii, but not enough to have a major effect on its markets. Housing Predictor forecasts that Hawaii will stay clear of a housing recession in 2008 and just may miss a down turn in its markets all together, at least for now.

The draw of the Island’s sunshine has propelled Hawaii luxury real estate sales ahead of 2006. Global interest has increased in Hawaii, despite few Japanese investors in the marketplace. However, that may change soon as Japan’s investment trust laws change in 2008 to provide new investment incentives for Japanese investors.

The regulatory changes of the J-REIT (Japanese real estate investment trust) will allow capital to purchase property in Hawaii and could provide a huge infusion of Japanese money into Hawaii, which has long been a major investment area for the Japanese.

International and U.S. east coast real estate buyers have compensated for the drop off in demand from the rest of the nation. In Honolulu the median prices are staying at about where they were a year ago, which represents Hawaii as the only state in the country to have a stable housing market.

The inventory of homes has also declined instead of increased in Hawaii, which is unparalleled else where in the nation.

Building is still abundant in Honolulu. As the nation’s second largest vacation home market behind Florida, Waikiki hasn’t seen as much development as now since the 1960s when the area was originally designed as a resort magnet. In Kapolei a new major residential development is underway. As a result of a healthy market place, few foreclosures, and the infusion from Japan Housing Predictor forecasts Honolulu to appreciate 6.8% for the year.

In Maui condo development is underway. Maui is becoming the state’s second most developed island and new construction is still on-going. Maui will see a healthy pace of home and condo sales on the way to forecast 5.6% appreciation.

On Kauai home sales have also slowed slightly, but with its more relaxed less urban setting Kauai still has healthy consistent growth. Condo development is limited to four stories on this remote more 1970's version of the islands, keeping the flavor of Hawaii rituals more intact.

Kauai is forecast to see another year of good home sales growth in 2008 on the way to 4.9% in appreciation for the year.

Source: HousingPredictor.com - end Feb 2008