November 2023 Real Estate Market Update
Stay informed with the latest updates on Hawaii’s real estate market for November 2023. Discover insights into property prices, economic trends, and more.
Introduction
In this November 2023 real estate market update, we delve into the current state of Hawaii’s real estate landscape. From property prices to economic forecasts, we aim to provide you with comprehensive information to keep you well-informed about the market.
The Real Estate Market Overview
Property Prices
The real estate market in Hawaii has seen some interesting trends in October 2023. The median price for single-family homes reached $1,100,000, representing a 4.8% increase compared to October 2022. However, condos experienced a slight decline, with a median price of $515,000, down 1.0% from the previous year.
Sales Activity
Despite these price fluctuations, demand has stabilized. Single-family home sales dropped by 4.1% compared to the previous year, while condo sales saw an 8.3% decrease. However, properties under contract waiting to close have shown a similar trend, with pending sales for single-family homes down by 3.0% and condos down by 5.0% compared to the previous year.
Supply and Demand
Supply levels have also seen some stabilization, with 4.6% fewer single-family homes for sale compared to October 2022. Interestingly, there are 9.4% more condos available for sale than the previous year. This indicates that while demand may be softening, it’s still a seller’s market. Single-family homes have only 2.9 months of supply, while condos have 3.3 months of supply.
Economic Insights
Paul Brewbaker’s Analysis
Economist Paul Brewbaker recently addressed Hawaii’s real estate agents, shedding light on various economic aspects. Some key takeaways include:
- Hawaii’s economy has returned to long-term trends following pandemic disruptions.
- The labor participation rate in Hawaii continues to drop at a rate of about 5% per decade due to the aging population.
- Oahu’s inflation rate has reverted to the pre-pandemic average of 2.2% per year in 2023.
- Despite higher mortgage rates, Oahu’s real estate prices are expected to appreciate annually by about 2.2% higher than the inflation rate.
- Hawaii’s gross domestic product growth has stabilized compared to the national average, with Hawaii’s GDP falling about 15% compared to the U.S. GDP growth from 2018 through 2022.
Mortgage Rates and Home Buying
A Wall Street Journal article has highlighted the impact of current mortgage rates on the cost of home buying. Nationwide, the median monthly mortgage payment is now 52% higher than the monthly rent for an average apartment. This surge is attributed to a 60% increase in monthly mortgage payments for median-priced single-family homes on Oahu over the past three years.
1031 Exchange Deadline
If you are involved in a 1031 Exchange and closed on the relinquished property after October 18th, you have less than 180 days to close on the replacement property unless you file for a tax extension before the tax deadline. The replacement date aligns with the 2023 tax return filing deadline, anticipated to be April 15, 2024. Therefore, it’s crucial to plan accordingly to avoid any tax-related issues. For more information on filing for an extension, click here.
Association Management Issues
Honolulu Civil Beat recently reported an embezzlement scandal involving the Makaha Surfside association. Approximately $300,000 was embezzled from the association over the last couple of years through fraudulent payments to vendors for “planned” projects that were never completed. This incident serves as a reminder for owners to review annual financial statements and address any irregularities promptly.
Evacuees’ Uncertain Future
Around 1,400 Lahaina evacuees face uncertainty regarding their temporary lodgings. Short-term rental communities are eager to reopen to visitors, but this conflicts with the evacuees’ desire to maintain their accommodations. The Red Cross, which signed short-term leases, is currently looking for new accommodations for the displaced residents.
State’s Software Struggles
After investing two years and $7.8 million, the state of Hawaii has decided to abandon its efforts to replace its 50-year-old Enterprise Financial System. The primary reason for this decision was the inability to meet cost, schedule, and performance parameters. Disagreements between the state and the contractor regarding customization played a significant role. It’s essential to strike a balance between customization and off-the-shelf solutions to ensure the success of such projects.
USS Arizona’s Legacy
The U.S. Navy is commemorating history by building the next USS Arizona, a Virginia-class fast attack submarine. The keel was laid on the anniversary of the Pearl Harbor attack, December 7, 2022. The USS Arizona will be based in Groton, CT, upon completion, continuing the legacy of the original battleship.
Expanding Operations to the Ninth Island
Hawaii Pacific University (HPU) and Zippy’s are extending their operations to Las Vegas, often referred to as Hawaii’s ninth island. HPU will offer two doctorate programs at the new campus, focusing on Occupational Therapy and Physical Therapy. Zippy’s follows a similar expansion strategy, catering to the local Hawaiian community in Las Vegas.
Zingipop Sodaworks: A Taste of Hawaii
A new beverage company, Zingipop Sodaworks, opened its doors in August, producing non-alcoholic craft sodas crafted from Hawaiian-grown ingredients. These sodas feature locally sourced fruits, roots, herbs, and are sweetened with local honey. Available in 12-ounce cans and sixtel kegs, you can find Zingipop sodas at various locations, including Farm Link, Kualoa Grown, Grace in Growlers, Nii Superette, and The Country Eatery.
Restoring Hawaii’s Coral Reefs
The state Division of Aquatic Resources has completed a significant project to restore damaged coral reefs in Hanauma Bay. Using a pioneering method developed by the Hawaii Coral Restoration Nursery, damaged coral fragments are collected, quarantined, and grown in a lab. Once ready, these coral fragments are attached to concrete pyramids and acclimated to their new environment. This method accelerates coral growth and demonstrates the potential for reef restoration.
Tagged Papio Release
The Waikiki Aquarium has released 150 tagged papio into the wild, aiming to gather recapture data and gain insights into this species. Papio is a member of the jack family and a popular Hawaiian game fish. The research will help in understanding their behavior and potential for restorative aquaculture.
Humpback Whale Migration Begins
The Pacific Whale Foundation has spotted its first humpback whale of the season off the coast of Maui. These majestic creatures migrate 3,500 miles every year from Alaska to Hawaii’s warm waters for breeding, birthing, and nursing their young. Federal regulations strictly prohibit approaching these whales within 100 yards by boat and 1,000 feet when in an aircraft to ensure their protection.
Fire Ant Invasion
Fire ants have rapidly spread across Oahu, with colonies now confirmed at various locations. These invasive species are known for their painful bites and have hitched rides on infected plants, making them a significant concern. Treating yards regularly to prevent home infestations may become necessary, aligning with practices in the Southern U.S.
Alala Release on Maui
The state Division of Forestry and Wildlife plans to release alala, the Hawaiian crow, on Maui after previous unsuccessful attempts on the Big Island. One key reason for the earlier failures was the presence of their main predator, the io (Hawaiian hawk). Researchers hope that the alala will thrive in Maui’s wetter forests without the threat of io, ultimately contributing to the survival of this unique species known for its tool usage.
Waiahole Poi Factory Expands
The Waiahole Poi Factory, a beloved stop along the Windward Coast, is opening a second eatery in the Windward Mall. Known for its Hawaiian plate lunches, freshly pounded poi, and the signature dessert “Sweet Lady of Waiahole,” this expansion aims to bring their delicious offerings to a broader audience.
Conclusion
In conclusion, the real estate market in Hawaii continues to see fluctuations in property prices and demand. Economic insights from Paul Brewbaker provide valuable context, while various other developments, from coral reef restoration to wildlife releases, reflect the unique ecological and cultural aspects of Hawaii. Stay tuned for more updates on the ever-evolving real estate landscape in Hawaii.
Frequently Asked Questions
Q: What is the current median price for single-family homes in Hawaii?
A: As of October 2023, the median price for single-family homes in Hawaii is $1,100,000.
Q: Are there any issues with association management in Hawaii?
A: Yes, there have been recent issues with embezzlement in some associations, highlighting the importance of reviewing financial statements regularly.
Q: What is the status of the 1031 Exchange deadline?
A: If you closed on the relinquished property after October 18th, you have less than 180 days to close on the replacement property unless you file for a tax extension. Be mindful of the tax return filing deadline, which is anticipated to be April 15, 2024.
Q: How is Hawaii addressing the invasive fire ant issue?
A: Officials are considering treating yards regularly to prevent home infestations, similar to practices in the Southern U.S.
Q: What are some of the expansion efforts happening in Hawaii?
A: Hawaii Pacific University (HPU) and Zippy’s are expanding their operations to Las Vegas, and a new beverage company, Zingipop Sodaworks, has recently opened, offering craft sodas made from Hawaiian-grown ingredients.
Q: What is the goal of releasing tagged papio into the wild?
A: Releasing tagged papio aims to gather recapture data and gain insights into the behavior of this species, contributing to their conservation and potential for restorative aquaculture.
Q: How is Hawaii working to restore damaged coral reefs?
A: Hawaii is using innovative methods, such as collecting and growing coral fragments in a lab, then attaching them to concrete pyramids in the ocean to accelerate coral growth and restore damaged reefs.
