Residential Home Sales in Hawaii
Understanding the Limitations and Reliability of Data
The thing about statistics is it’s just a statistic, a fact or piece of data from a study of a large quantity of numerical data; it’s designed to put analytical measures on vast amounts of data which we can then quantify into meaningful information. Although stats can never ensure 100% accuracy, it can provide a near accurate picture of the market.
For the purpose of this article, the statistics and data have been synthesized and compiled by the Hawaii Department of Business, Economic Development and Tourism (all graphs provided by DBECDT). In their findings, their final analysis is subject to: 1. Data gathered from 2008-2015, 2. Data based on monthly averages making it susceptible to out liers, 3. Sorted by property location and buyer residency, and 4. Property type not included in the analysis. In essence,the report does a great job of painting a picture of the current mood of the state’s market and each island’s market.
Market Overview
Number of home sales and average sale price in Hawaii (statewide)
The above graph shows the total number of annual home sales in Hawaii from 2008 to 2014 and the average sale price from 2008 to September 2015. The market didn’t show any indication of the total number of homes sales steadily inclining or declining, but rather a fluctuating number of total home sales. However, in 2010 total number of home sales shot up by 20% to the next closest highest grossing year.
Average sales price tells a different story with a steady increase since 2011. The average sale price in the first nine months of 2015 was $614,778, which is a little over 30% increase in average sale price in 2011.
Number of home sales and average sale price in Hawaii by county
The 4×4 comparison reveals the 2010 spike in the number of sales can be attributed to an increase in sales across neighbor islands (Hawaii County, Maui, Kauai), especially Hawaii county with almost 2000 more transactions than 2009.
You could say as far as the number of homes sold goes, Kauai’s market has been the most stable with close to a steady stream of about 1000-1500 or so. Honolulu’s number of sales has been steadily inclining since 2012 with December 2015 up in the air as to whether or not that trend will continue. Since a sharp decline after 2010, Hawai’i County’s market has leveled off and has been steadily performing at the same rate since 2011. As for Maui County, sales have been at a slow decline with price moving in the other direction; it’s no coincidence that as the number of sales have gone down, the price has gone up.
The Kauai and Maui markets experienced similar trends with average price reflecting a parabola shape with a vertex at year 2011 reflecting lows of around $450,000 or so. Honolulu County for the most has been in the range of around $500k-$600k. Hawai’i County has seen a steady increase in price since 2012.
Where the Real Story Lies
The graph on the left for the period of January 2008 to September 2015, a total of 139,998 homes were sold in Hawaii, representing 18,064 sales on average per year. Local residents=72.5% of the total buyer pool state wide, mainlanders represent 23.5% of share, and foreigners rounds out the rest at an even 4%. For awhile now, there has been heavy speculation among the real estate community that foreign and mainland buyers have been gaining influence and developing a penchant for Hawaii real estate. Now with the data compiled, we can say they make up a little over a quarter of Hawaii’s entire real estate market.
The graph on the right tells a frightening story, homes foreign buyers bought were 64% more expensive than the homes local residents bought. Because non local buyers can afford steeper purchase prices, it gives the market not a false impression per se (because the market is doing its job and responding to the price buyers are willing to pay), but it is tricked into pushing the average purchase up while simultaneously pricing out local residents from certain markets.
The most notable fact to point out is over 50% of the homes sold on Maui were to non local residents if you combined Mainland and foreign buyers. Honolulu County’s high percetnage of local buyers can be partially explained by Oahu residents access to a wider variety of skill jobs and number of residents.
At this point it is pure speculation, but one can theorize non residents view neighbor island real estate as a worthy investment vehicle to park capital in and build equity. It makes sense if you think about it; for example Wailea is teeming with all sorts of new construction options and with the development path Maui is on real estate prices in the area have historical gone up and can potentially add some nice padding to investment portfolios.
Wailea Real Estate Market
3885 WAILEA EKOLU PL
194 E PANANA PL
173 HELEUMA PL
4351 WAILINA ST
187 HELEUMA PL
3907 WAAKAULA PL
199 E IKEA MOKU PL
195 E IKEA KAI PL
100 WAILEA IKE DR #10
100 WAILEA IKE DR #6
Contact a South Maui Real Estate Specialist
We’d like to extend an invitation to you to stop by our on-site Ho’olei real estate information office, which is open daily, before the reservation desk, from 9:00AM–5:00PM.
Our team has been blessed with the opportunity to have been part of this luxurious community since its infancy stages back in 2005. We’ve been in the in house sales team for the past 9 years. It truly brings a smile to my face when I see first time guests, return visitors, and full-time residences who embrace and wholeheartedly love their Maui lifestyle.
Mahalo,
Anthony Sayles
(808) 280-6532