Real Estate Insight

Hawaii March Housing Statistics – Condo Prices Still Rising

Not Much Gloom and Doom For Oahu, Hawaii’s Real Estate Market

During March, Oahu sales of 282 single-family homes and 392 condominiums were reported through the Honolulu Board of Realtor’s MLS, decreases of 14.5 percent for single-family homes and 27.5 percent for condominiums, compared to the same month last year. This brings total single-family home sales on Oahu to 673 for the first three months of 2008, a decrease of 22.2 percent over the same time period one year ago. Total condominium sales through February were 1,037, a 23.8 percent decrease from last year.

While the number of sales continued to decline, the most important statistic shows Oahu real estate is holding its own. The median prices paid for Oahu properties were $628,000 and $329,300, respectively, a small decrease of 2.4 percent for single-family homes from the March 2007 price and an increase of 2.6 percent for condominiums. While single family prices declined, the small percentage is almost a welcome relief when comparing real estate markets across the country. The total dollar sales volume generated in the housing market for the first three months of the year was $974.1 million, a decrease of 18.0 percent or $213.1 million, compared to the $1.187 billion produced one year ago.

What Does All of This Mean?

“The Oahu median prices for both single-family homes and condominiums are still constant, while the sales volume for the market has slowed,” said Dana Chandler, President of the Honolulu Board of REALTORS®. “Even with the instability in the finance industry, the market for Oahu residential properties appears to be holding, unlike the very negative conditions we hear about on the Mainland.”

“There is a continued demand for residential properties, especially in the high-end, which could be an outgrowth of the weaker U.S. dollar and other local factors, such as our low unemployment and pleasant climate,” added Harvey Shapiro, Research Economist at the Honolulu Board of REALTORS®. “The limited availability of land and housing on Oahu should prevent any significant downturn in prices.”

Hawaii’s Aces in the Hole

How is it possible that Hawaii is not experiencing the same doldrums as the U.S. mainland? While it is true that Hawaii has experienced a downturn in the real estate market, few people acknowledge two variables unique to Hawaii’s real estate; 1) A desire shared worldwide to live in Hawaii and 2) The finite nature of real estate available to buy in Hawaii. When you consider a global base of buyers wanting to own a home in Hawaii and combine that with the physical limits of being one of the smallest land masses, it may not be so surprising after all. Also, as pointed out by Harvey Shapiro, the week U.S. dollar is giving foreign buyers much more for their money.

*Source: The Honolulu Board of REALTORS®

Elliot Lau