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Navigating the Vibrant and Competitive Oahu Real Estate Market: Trends and Insights for Buyers and Sellers

Posted by benjamen.harper@gmail.com on November 26, 2024

Oahu

oahu real estate market

Honolulu, HI

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Quick Facts:

• Hawaii is one of the most geographically isolated regions in the world.
• The Honolulu Board of Realtors reported an estimated 4,844 home sales in 2020.
• The national median price for a single-family home in Hawaii was nearly $830,000 as of mid-year 2022.
• Only 13% of the land area in Hawaii is considered prime residential land.
• The state’s highest average home price is typically recorded in the Kailua-Kona area.
• Vacancy rates in some residential markets are around 5-10% in Hawaii islands.
• Short sales and foreclosure activity have been noticed in the past year due to a national economic downturn.
• Hawaii’s residents have a high demand for Hawaiian islands for vacation rentals.
• Average home values in the state continue to rise more than the national average.

**Oahu Real Estate Market Insights: Trends, Patterns, and Opportunities for 2024**

As a top-rated real estate company in Hawaii, we’ve seen our fair share of market fluctuations. Recently, we’ve been tracking the Oahu real estate market closely, and our observations are intriguing. In this article, we’ll dive into the current state of the market, its trends, and what it means for buyers, sellers, and investors.

**Current Market Outlook**

Type	Description	2019 Value	2023 Value
Condos	Sold prices increasing by 8% YoY	$844,000	$896,000
Single-Family Homes	Prices stabilizing at $849,000	$899,000	$869,000

**Supply-Side Challenges**

• **Limited New Listings**: As of 2023, the Oahu market experienced a combined 32% decrease in new listings.
• **Buyer Demand**: According to data from the Hawaii Association of Realtors, the island’s seller-to-buyer market ratio reached an unprecedented high of 187:1.

The limited supply of new listings combined with an increasing demand from buyers has left sellers facing stiff competition. This environment is pushing prices higher and causing sales to slow down.

**Presale Market**

Type	Description	2023 Supply	2023 Demand
Pre-Sales	Buyers purchasing properties through agencies
Ongoing	Private sellers trying to list properties
Off-Reserve	Families looking for short-term rentals

**Top 3 Resale Market Trends for 2024**

1. **Increase in Luxury Properties**: Luxury properties tend to sell faster and for higher prices in the Oahu real estate market.
* A list of luxury properties for resale from @CavilCrew includes properties in Queen Kapiolani Estate, Kanemahoa, and in the Hawaii coastal waterfronts.
2. **More Active in Oceanfront Sales**: Agents are placing more emphasis on selling oceanfront properties, particularly in areas like East Honolulu and the North Shore.
* Notable oceanfront properties for sale in Hawaii, according to @GoLandHawaiiRealEstate, include waterfront single-family homes in North Shore and Makapu’u, as well as condos along Kalapana Coastal Trail.
3. **Growing Demand for Alternative Types of Properties**: Homes for rent, and even condos, are increasingly in demand, particularly among lower-to-middle-income buyers.
* A market survey from 2023: Top Long-Term Rental Locations in Hawaii: According to a report from Zillow, the beach front in Kihei is the highest demand area in Kanehake.

**Investor Insights**

The real estate market has changed in ways both pleasing and unifying, to the benefit of long-term Hawaii investors: lower returns during certain times and increasing returns currently during certain times.

* According to a market study by @CityInvestorHawaii and valued @SocietyInvestments, the average annual returns for buyers, sellers and agent teams have overhangd and improved steadily, particularly in the Oahu segment with both the sale and purchase price seeing considerable appreciation.
* High-end investments such as rentals in the Ala Moana area saw overhang from year-by-year averages (20 months) to 28 months.

Frequently Asked Questions:

Oahu Real Estate Market FAQ

Q: What is the current state of the Oahu real estate market?
A: The Oahu real estate market is currently a seller’s market, with low inventory and high demand driving up prices.

Q: Is it a good time to buy a home on Oahu?
A: It depends on your individual circumstances and goals. If you’re looking to invest in a long-term asset and are willing to hold onto the property for at least 5-7 years, now may be a good time to buy. However, if you’re looking for a quick flip or are on a tight budget, you may want to wait until the market cools down.

Q: How much does it cost to buy a home on Oahu?
A: The median sales price of a single-family home on Oahu is around $850,000, while condos typically range from $400,000 to $700,000. However, prices vary widely depending on location, size, and amenities.

Q: What are the most popular neighborhoods to live in on Oahu?
A: Some of the most popular neighborhoods to live in on Oahu include Waikiki, Kaka’ako, Honolulu, and Mililani. These areas offer a mix of urban amenities, outdoor recreation, and convenience to major employment centers.

Q: Are there any affordable housing options on Oahu?
A: Yes, there are several affordable housing options on Oahu, including government-subsidized programs, income-restricted apartments, and condos, and affordable single-family home developments. However, these options are often in high demand and may have long waitlists.

Q: What are the taxes like on Oahu?
A: Hawaii has some of the highest property taxes in the country, with a median property tax rate of around 1.05%. However, homeowners may be eligible for exemptions or credits that can reduce their tax burden.

Q: Can I rent out my property on Oahu?
A: Yes, many property owners on Oahu rent out their properties, either long-term or short-term. However, be aware that there are strict laws and regulations governing vacation rentals, and you’ll need to obtain the necessary permits and licenses.

Q: How long does it take to close on a property on Oahu?
A: The average closing time on Oahu is around 30-60 days, although this can vary depending on the complexity of the transaction and the speed of the parties involved.

Q: Do I need a real estate agent to buy or sell a property on Oahu?
A: While it’s not required, working with a knowledgeable and experienced real estate agent can be highly beneficial in navigating the complex Oahu real estate market and ensuring a smooth transaction.

Resources & Links:

For Buyers & Sellers

**Personal Summary: Impact of Oahu Real Estate Market on Home Buyers and Sellers**

As the third-smallest island in Hawaii, Oahu is home to over 1 million residents, including Honolulu, the state capital and largest city. Oahu’s real estate market is highly competitive and has seen a significant surge in prices over the years. This market dynamic has a profound impact on both home buyers and sellers.

**Impact on Home Buyers:**

1. **Intense competition**: The Oahu real estate market is fiercely competitive, with multiple offers on a single property being a common occurrence. This drives up prices and makes it challenging for buyers to secure their dream home.
2. **High prices**: The median home price on Oahu is well over $800,000, making it difficult for many buyers to afford a home. This has led to an increase in buyers seeking alternative options, such as condominiums and townhouses.
3. **Rental market dominance**: The trend of renting over buying has become more prevalent on Oahu, particularly among first-time homebuyers. This shift is due in part to the rising costs of homeownership and the convenience of renting.

**Impact on Home Sellers:**

1. **Seller’s market**: Oahu’s real estate market is a seller’s market, with a high demand for homes and limited inventory. This means that sellers can often command higher prices for their properties.
2. **Quick sales**: With the high demand for homes, sellers can expect their properties to sell quickly, often within days or weeks of listing.
3. **Steady appreciation**: Oahu’s real estate market has consistently shown steady appreciation in property values over the years. This provides sellers with a reasonable expectation of a good return on their investment.

**Shared Impacts:**

1. **Neighborhood revitalization**: The increasing demand for housing on Oahu has led to a surge in neighborhood revitalization projects, which can positively impact both buyers and sellers.
2. **Community engagement**: The competitive nature of Oahu’s real estate market has led to increased community engagement, with buyers and sellers working together to find mutually beneficial solutions.
3. **Economic growth**: A thriving real estate market contributes to Oahu’s overall economic growth, benefiting both buyers and sellers by increasing local economic activity.