The potential for real estate investment in Hawaii remains strong despite some reports which indicate statewide sales prices have decreased somewhat over the past year. In fact, home sale statistics actually indicate that prices are higher than they were just one year ago across the board statewide.
Maui
On Maui 68 homes were closed on in April and while more than 50% of them did sell for less than $700,000 the median sales price is still higher than this time last year; $16,000 higher, in fact. Further study of April Maui real estate sales statistics indicate that while most home sale prices did remain below the $700,000 mark this was not due to a reduction in sales prices but can more accurately be attributed to the fact that more sales shifted to districts on Maui that have traditionally been more affordable than other districts. In fact, half of the April sales were concentrated in just two Maui districts: Kihei and the central plain. In districts where median prices rose into the millions, such as Napili, Kaanapali, Maui Meadows and Wailea, there were only a few sales. This data would certainly indicate that while sales remain strong on Maui, they are shifting to more affordable and less affluent districts.
Even though it seems sales in higher priced districts have tapered off somewhat, this is certainly no indication there is a lack of buyers for these areas. The fact that Maui has consistently ranked as the top destination island keeps buyers interested in purchasing second homes as well as retirement homes. The bustling activity of Lahaina Town continues to bring in tourists interested in restaurants perched on the beach as well as live music and theatre venues while Kaanaplai offers plenty of amenities such as luxury condos and shopping opportunities to keep residents and tourists alike satisfied.
Big Island
Median sales price for Big Island real estate have shown one of the largest increases in the state, up almost $200,000. While there have been such reductions in prices, these were primarily focused on homes that were admittedly overpriced when first entering the market. For the most part, homes prices on Big Island remain historically high. The lowering of overpriced homes has allowed the real estate market on Big Island to stabilize with an increase in inventory. This has allowed buyers to gain more choices in Big Island real estate, leading many real estate professionals to predict that we may be approaching the beginning of a buyers market.
Kauai
Kauai real estate home sales have shown an increase of $140,000 over the past year, indicating a bright future for continued activity. When sales on neighboring islands were showing a reduction sales on Kauai remained strong. These sales translated to an overall increase of 25% from last year. While interest rates remain relatively low, both investors as well as individuals interested in non-foreign tropical retirement locales are ranking Kauai as one of the first options for real estate purchases.
Oahu
While it is true that there was somewhat of a reduction of sales in Oahu real estate in March and April, sales in May, more than made up for that slowdown by increasing almost 10% from this time last year. This new record allowed the median home price to hit over $665,000. Not only were homes sales prices higher, but the number of homes going to closing also increased in May over last year; from 366 in May 2005 to 374 this year, as revealed by the Honolulu Board of Realtors. Further study of sales records indicate that the slowdown of prices in early spring could be attributed to heavy rainfall. Once the weather cleared, Oahu real estate sales recovered. Market conditions now indicate strong sales activity, expected to continue throughout the year and beyond.
Considering all aspects of the Hawaii real estate market, the slight fluctuations we’ve experienced over the past few months have done nothing to diminish overall sales activity. More and more people are recognizing the benefits of enjoying the lush tropical setting of the Islands while reveling in the security remaining in the USA can provide. After the initial shock of 9-11 passed, individuals interested in retiring as well as those looking for vacation options realized foreign locales were no longer as attractive and began looking for safer alternatives. The Hawaiian Islands provides all the comforts and familiarities of America while retaining an environment that somehow still feels like another country altogether. As large segments of the Baby Boomer population begins the retirement phase of their lives it is anticipated the Hawaiian real estate market will remain strong.