We live on an ISLAND. Our real estate market tends to behave by its own rules because we live on an ISLAND. When trends in any direction affect marketplaces on the mainland, they may have little effect here . . . because we live on an ISLAND.
Our prices tend to be very high because buildable land is at a premium: there’s only so much of it! And our real estate market tends toward steady, though sometimes slow increases in price, brisk demand and short times on the market.
I’ve been looking at appreciation rates the last few days. I’ve looked at rates for various markets around the country and at ours here in Honolulu over the past 30 years. I’ve learned a few interesting things!
Over the past 30 years, the median price of a single family home in Honolulu has risen 176.74%! That means the $900,000 home you are enjoying today probably would have sold in the $325,000 range in 1985!
Median price has risen on average 5.89% per year over the 30 year period. If that metric holds true, it is on the likely side of possible that your $900,000 house will be worth $953,000 next year and about $1.2 million in five years.
We do have real estate downturns in Honolulu, but they tend to be shorter and milder than in other parts of the country. For example, during the last horrendous downturn (2007-2012), the median price in Honolulu fell a little more than 3%. In Southern California, prices fell 30%-45% depending on the specific market. It wasn’t just a West Coast phenomenon, either: Atlanta lost about 25%, which was typical for most metro areas on the Eastern side of the country.
There is a message here for anyone living on Oahu, or thinking about it:
- If you already own a home here, congratulations! You made a wise decision and if history is any predictor, your housing investment will grow with few stumbles.
- If you are renting today but have the ability to buy: what are you waiting for? Next year you will be able to buy less house than you can today (assuming you will still be able to buy at all), and if the 30 year trend continues, you’re housing investment will be gaining value every month.
- If you are thinking of moving to Hawaii, don’t let our prices scare you. We actually do have nice single family homes under $600,000 and condos begin in the mid-$300,000s.
Most important: if you want to take advantage of the opportunities this wonderful ISLAND real estate market presents, get professional help! At Help-U-Sell Honolulu Properties, we are expert at helping you maximize your housing investment and at finding the perfect home for your family.
Help-U-Sell Honolulu Properties is a full service real estate company that provides exceptional service while charging less than ordinary Realtors. We’ve been successfully helping buyers and sellers all over Oahu for more than 12 years and we’d be delighted to help you achieve your housing dreams. Contact us at (808) 593-8811, or visit our website.