In times of uncertainty, we must rely on facts and hard-core analysis.
Hawaii's real estate market is one of the most dynamic markets in the world. The latest report published in February 2023 by Hawaii Life 2022 Luxury Market Report shows that despite a lower number of transactions and total dollar value of sales in 2022 compared to 2021, Hawaii still remains an attractive destination for buyers from all over the world.
A recent MansionGlobal article states, "Brokerage Hawaii Life has sat in the middle of that luxury activity, serving as the islands' top real estate firm in total listings and sales.
In 2022, a whopping three in four residential sales across the state were in the $3 million to $5.99 million range, according to Hawaii Life's end-of-year market report. "
Although focused on luxury real estate (properties $3m+), the report reveals some interesting trends in the overall Hawaii real estate market. You can read the complete publication here or the highlights below.
Some things stayed the same. Hawaii is still at the top of the list of the best places to live due to its location and quality of life.
"Location continued to play a stronger role in influencing Hawaii real estate values."
"Both internationally and domestically, Hawaii's market continues to garner substantial attention as the world's top destination for relocation, despite its standing as the most expensive state to live in the nation, outpacing both New York and California as most expensive.
Quality of life - including climate, culture, health, and recreation opportunities - remains the most common reason given for relocation to Hawaii. Other criteria include quality of education, low crime incidents, and longevity.
Based on these criteria, Hawaii has ranked first in quality of life, as measured by both Mercer and by Gallup-Healthways Well-Being Index.
Hawaii not only leads the US in life expectancy, but in healthy life expectancy. And Hawaii is consistently ranked in the top 10 best places to live in the nation."
State of Hawaii
Not surprisingly, sales were lower in 2022 compared to 2021.
"2022 Statewide high-end sales trailed 2021 in both number of transactions (-22%) and total dollar value (-23%) for a total of $3.72 billion."
652 Sales Above $3M
$3.72B Sales Volume
97.3% Avg Sales Price/List Price
$1,835 Avg Sales Price/Sqft
Despite a slowdown in sales, the report forecasts a rise in real property values in every market segment statewide.
Hawaii Island (Big Island)
The Big Island sales were also lower, but the report projects more quality inventory to hit the market in 2023.
"While Hawaii Island's high-end sales inched down from 2021 in number of trades (-24%) and dollar value (-31%), 2022 sales totaled $927.4M, more than double values before the pandemic."
157 Sales Above $3M
Sales Volume
97.8% Avg Sales Price/List Price
$1,912 Avg Sales Price/Sqft
69.2 Avg Days on Market
"We do expect the private club communities that began creating inventory in 2022 to continue building more vertical product to meet demand.
And we will continue to see ample new construction in resort areas, which should hit the market in 2023.
We are seeing more seller buydowns and creative financing with buyers who want to move into the right home, right now, and are willing to refinance down the road. We expect this to continue.
Although demand for Hawaii Island real estate shows very little sign of letting up, we are starting 2023 with a healthier, more balanced market."
What I see
In my 40-year-old real estate career, I have seen several ups and downs in the market. Back in 2021, we witnessed a real estate frenzy, and now the market is returning to its more normal, balanced state. When my clients ask me if prices will return to 2021 levels any time soon, I simply say I don't know.
I do know that, at least in my area of Puako, prime properties that are priced correctly sell fast. But conversely, properties not priced correctly lead to longer days on the market and softening of the overall real estate market conditions.
In addition, buyers have become selective and astute with what they do. They are not running to buy properties sight unseen anymore. Instead, they are hunting for value. They are smarter, very discerning, and make sure it is the right purchase.
Realistic sellers react to market conditions; others, however, still use the prices from a year ago, when the market was at its peak, creating a disconnect between asking prices and what buyers are willing to pay right now. So what to do in this situation? My advice to both buyers and sellers is to turn to facts!
Facts are compelling and can help home sellers and buyers make their expectations and demands more realistic, ultimately resulting in a closed sale.
My recent offer is a good example. My buyer clients wanted a home that I firmly believed was significantly overpriced. But, always honest with my clients, I shared my opinion with them. As a result, we agreed to submit an astute, fact-based offer for a realistic value of the property. The offer included actual facts like price per square foot, a comparative market analysis of the recently sold properties in the area, and other hard-core data pointing to the house's real value. It was very convincing, and the sellers accepted the offer.
Uncertain conditions can create a lot of confusion; the best way to deal with it is to analyze facts. No matter what you may hear from various information sources, take it with a grain of salt and do your own research or turn to a trustworthy professional who can do it for you.
As a Hawaii realtor, I believe that the market will continue to attract buyers from all over the world. The high quality of life, the unique cultural experiences, and the unparalleled natural beauty of Hawaii will always make it a top destination for those looking to purchase a luxury property.
But buying and selling a house takes work, and you want to do it right. So contact me if you need help figuring out where to start or have questions about the process. I will give you an honest, professional opinion and assessment and help you navigate the ever-changing real estate market.
Coming Soon
My research team and I are working on a series of blogs on becoming astute real estate buyers, preparing to buy a property in Hawaii, choosing the right agent, not spending extra money, and much more!
We follow the local real estate market, the nationwide market, the global economy, and the geopolitical situation in general to bring you fact-based information that will help you make informed buying or selling decisions.
Stay tuned for more straight talk with Jan Nores!
Ta Da!
Aloha,
Jan
For the latest COVID-19 travel-related information, click here.