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July 30th, 2019 by Marco Santarelli
How is The Honolulu Real Estate Market 2019?
Real estate can be a worthy investment opportunity. With research, a plan and the right price, just about anyone can be a real estate investor. If you are looking at investing in the Honolulu real estate market as a potential investment opportunity, you must read till the end. Honolulu is among nation’s top housing markets to watch in 2019.
Honolulu is the epitome of Hawaii. It is a premier tourist destination. However, that’s not a reason in and of itself to consider buying Honolulu real estate investment property. Honolulu itself is home to around 400,000 people. The Honolulu housing market is largest in the state, because the Honolulu metro area is home to almost a million people.
Size isn’t reason enough to invest in an area. If you are an investor, Honolulu has a record of being one of the best long term real estate investments in the nation. There are a number of reasons to consider investing in the Honolulu real estate. The Hawaiian economy is very strong and unemployment is low.
There is a rising demand for rental units year-over-year. The issue however is that rent prices are too high to be affordable for many renters. Is Honolulu going to be one of the hottest real estate markets for investors in 2019? To answer this question, let’s take a look at the latest Honolulu housing market trends and find out the prospects of investing in the Honolulu real estate in 2019.
Honolulu Real Estate Market Forecasts 2019 & 2020
The median home value in Honolulu is $655,100 on Zillow. Honolulu home values have declined -2.6% over the past year and Zillow’s Honolulu real estate market prediction is that the prices will fall -3.1% by June 2020. The median list price per square foot in Honolulu is $678, which is higher than the Urban Honolulu Metro average of $562.
The median price of homes currently listed in Honolulu is $639,000. The median rent price in Honolulu is $2,300, which is lower than the Urban Honolulu Metro median of $2,450.
Here is the Honolulu real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of -2.6% till June 2020.
Honolulu Housing Market Forecast 2019 – 2021
The Honolulu housing market forecast for the 3 years ending with the 3rd Quarter of 2021 is also positive. The accuracy of the Honolulu housing market trend prediction is 72%. Accordingly, LittleBigHomes.com estimates that the probability for rising home prices in Honolulu, HI is 72% during this period. If this Housing Market Forecast is correct, home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Honolulu, HI Real Estate Forecast.
Honolulu Real Estate Market Trends
Honolulu real estate market trends in show a -0% week-over-week drop in average listing price and a -8% drop in median rent per month. The median rent per month for apartments in Honolulu for Jun 16 to Jul 16 was $2,300.
Trulia has 1,952 resale and new homes for sale in Honolulu lined up for you, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.
As per the real estate company named Redfin, the Honolulu housing market is somewhat competitive. Homes in Honolulu receive 2 offers on average and sell in around 79 days. The average sale price of a home in Honolulu was $600K last month, up 16.7% since last year.
The average sale price per square foot in Honolulu is $589, down 2.6% since last year. Homes typically receive 2 offers. Homes in the Honolulu housing market sell for about 3% below list price and go pending in around 79 days.
There are 2,077 homes for sale in Honolulu, HI ranging from $5K to $30M on Realtor.com. 163 of which were newly listed within the last week. Additionally, there are 909 Honolulu rental properties up to $24,000 per month. The median list price of homes in Honolulu, HI was $625K in June 2019, trending up 6.8% year-over-year. The median listing price per square foot was $597.
There are 18 neighborhoods in Honolulu. There are 163 schools in Honolulu, HI. There are 61 elementary schools, 35 middle schools, 14 high schools and 53 private & charter schools. Some of the best neighborhoods in Honolulu, Hawaii are Waikiki, Ala Moana – Kakaako and Hawaii Kai. Waialae – Kahala has a median listing price of $1.9M, making it the most expensive neighborhood. Makiki – Lower Punchbowl – Tantalu is the most affordable neighborhood, with a median listing price of $408,000.
The median list price in Honolulu, HI is $685,000 on Movoto.com. The median list price in Honolulu went down 2% from June to July. Honolulu’s home resale inventories is 1,988, which increased 4 percent since June 2019. The median list price per square foot in Honolulu is $639. June 2019 was $641. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in July.
Honolulu, HI Single Family And Multi-Family Homes
Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate.
Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.
The single family housing market of Hawaii is competitive, low-inventory housing market. Billions of real estate investment dollars have flowed into the Hawaii real estate market in the last few years. Foreign buyers too are pouring billions into the Hawaiian housing market. Honolulu is the focus of most real estate investment interest in the state of Hawaii.
When it comes to renting or buying condos and apartments, Hawaii is the least affordable housing market in the nation. The rent prices are beyond the reach of most. According to the Honolulu Board of Realtors, during June 2019, single-family home sales fell 10.4% while condo sales fell 13.5% year-over-year.
Prices rose moderately with single family homes up by 2.3% $800,000 while condos rose 3% to $432,500. New home listings declined by 8.9% from June 2018, yet overall inventory increased 6.7%. More condos were listed in Oahu. They went up by increased by 6.3%, as did overall inventory by 13.8%.
Currently, there are 563 single family homes for sale in Honolulu, HI on Zillow. Additionally, there are 204 single family homes for rent in Honolulu, HI. Under potential listings, there are about 3 Foreclosed and 11 Pre-Foreclosure homes. These are the properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
Honolulu, HI Foreclosures And Bank Owned Homes 2019
According to Zillow, in Honolulu 0.0 homes are foreclosed (per 10,000). This is the same as the Urban Honolulu Metro value of 0.0 and also lower than the national value of 1.2.
The percent of delinquent mortgages in Honolulu is 0.5%, which is lower than the national value of 1.1%. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth.
The percent of Honolulu homeowners underwater on their mortgage is 4.9%, which is higher than Urban Honolulu Metro at 4.6%.
There are currently 183 properties in Honolulu, HI that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 1,293. In June 2019, the number of properties that received a foreclosure filing in Honolulu, HI was 33% higher than the previous month and 23% lower than the same time last year.
Home sales for May 2019 were up 0% compared with the previous month, and down 100% compared with a year ago. The median sales price of a non-distressed home in Honolulu was $0. The median sales price of a foreclosure home in Honolulu was $0, or 0% higher than non-distressed home sales.
Should You Invest In Honolulu Real Estate In 2019?
Is it worth buying a house in Honolulu, HI? Investing in real estate is touted as a great way to become wealthy. Many real estate investors have asked themselves if buying a property in Honolulu is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
We have already discussed the Honolulu housing market 2019 forecast for answers on why to put resources into this market. Although, this article alone is not a comprehensive source to make a final investment decision for Honolulu but we have collected ten evidence based positive things for those who are keen to invest in the Honolulu real estate in 2019.
Investing in Honolulu real estate will fetch you good returns in the long term as the home prices in Honolulu have been trending up year-over-year. Let’s take a look at the number of positive things going on in the Honolulu real estate market which can help investors who are keen to buy an investment property in this city.
1. Its Diverse Economy
When someone mentioned Hawaii, the default assumption is beautiful beaches and sparkling waters. However, Honolulu has a surprisingly diverse economy. It is the state capitol, and that results in many administrative jobs in the area. Because of the large harbor, there are several military bases in the area.
The military bases create an estimated hundred thousand jobs across the Hawaiian Islands. As both the capital and largest city in the state, it is home to the biggest hospitals and service providers. T
hey’re also a busy international port as well as home to an international airport. This attracts many Hawaiians to Honolulu to work, both in tourism and in other market sectors.
2. The Honolulu Rental Market Growth
The Honolulu real estate market initially seems to be balanced with a roughly 5 percent rental vacancy rate. However, it has a serious shortage of affordable housing, and most of the new construction consists of luxury properties that are out of reach for the local population.
This is aside from the slow, steady, 1-2 percent population growth year over year. Oahu, the island Honolulu is located on, is expected to have a 26,000 housing unit shortfall over the next ten years. Given the relative lack of space to build new housing, this will drive up rental rates.
3. The Honolulu Economy that Guarantees a Large Pool of Renters
Housing in Honolulu is expensive, and the relatively large number of people working in low-pay retail and tourism jobs results in many who will never be able to afford owning a home or condo.
Roughly sixty percent of Hawaii residents are cost-burdened renters, people who spend more than a third of their income on rent.
Compounding the matter is that they’re competing with several large pools of renters who are almost immune to local economics, driving up rental rates.
4. The Large Military Market
We’ve already mentioned the various military bases in the area. The Hawaii Department of Defense is essentially the command center for the Pacific Fleet. U.S. Army Fort Shafter is here.
There’s a Coast Guard here, as well. Not everyone can live on base, and not everyone wants to live on base. The Marines and Air Force have bases on Oahu, too. This creates a large, permanent class of renters in the Honolulu housing market.
5. The Large Student Market
Any state capital will be the home to at least one state university, and Honolulu is no exception. There are actually several University of Hawaii campuses in and around Honolulu.
Private schools like Chaminade University of Honolulu flesh out the educational market, and they provide a diverse market for those considering Honolulu real estate investment so they can rent to students.
6. The Impact of Geography
Geography impacts the Honolulu real estate market in a variety of ways. It is already an incredibly dense housing market (fourth densest in the U.S). They can’t expand out onto the water, and the steep hills are not amenable to new construction.
Much of the open land that exists is protected natural reserves or beaches maintained so that the hotels can maximize tourist income. That limits new construction to tearing down existing buildings and putting in denser housing stock.
That both limits the addition of new units to the Honolulu housing market and increases their cost. This is why the Honolulu real estate market is both incredibly expensive and suffers far higher overcrowding than the rest of the U.S.
7. The New Rules that Allow for ADUs
ADU stands for an accessory dwelling unit. The new rules were intended to encourage people to build “mother-in-law” suites and other small, secondary units on existing property. This would legalize the secondary buildings many homeowners already have and allow them to rent them out legally.
This presents a redevelopment opportunity for those who buy an older fixer-upper with a yard. It also means that you could turn freestanding garages and other smaller buildings into housing stock and legally rent it out on the Honolulu real estate market.
8. The High ROI on Approved Rental Properties
Hawaii has an affordable housing crisis. This is why the city is hostile to short term rentals in housing units unless it is part of the Waikiki tourist district. While there are only a few hundred homes and condos that are licensed by the city, each one is an incredibly valuable Honolulu real estate investment because you can rent it out to the millions of tourists who visit Honolulu every year.
And condos offer an even better deal for investors. If you’re shopping for a Honolulu real estate investment property, the Honolulu market is notable for the sheer abundance of condos and the high ROI they provide.
Because the Honolulu housing market is so dense, most tourists know they won’t be able to find a single family home to rent out. The beaches are lined by walls of condo towers and hotels.
They expect to stay in a condo and spend most of their time on the beach or at tourist attractions. There are several benefits of condos over single family homes. One is the lower cost, and the other is reduced maintenance. This results in a higher return on investment for condos than bungalows.
9. The Relative Landlord Friendly Market
Hawaii is relatively landlord friendly. You don’t have to keep receipts or pay interest on deposits. There is no specific payment grace law at the state level. Written leases aren’t required unless someone is staying more than 12 months, though a written agreement is advisable.
Hawaii allows for unconditional quit notices against those who violate their lease. Hawaii’s eviction courts typically side with the landlord. This makes the Honolulu housing market far better than California or Oregon.
10. The Relatively Low Tax Rates for Property Owners
The Hawaiian government earns a large share of its income from hotel fees and sales taxes. This is why the state has the lowest property tax rate in the nation. It is just 0.3 percent.
Effective property taxes are somewhat higher because of the high valuation of homes in the Honolulu real estate market. All of that combines still gives the Honolulu housing market an average property tax bill of 1150 dollars per year, 33 out of the 50 states.
Business taxes are middling, but that rarely applies to an owner of an investment property in the Honolulu real estate market.
Honolulu Real Estate Investment
Maybe you have done a bit of real estate investing in Honolulu, HI but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold.
A good cash flow means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt.
Therefore, finding a good Honolulu real estate investment opportunity would be a key to your success. in If you invest wisely in Honolulu real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate.
The less expensive the Honolulu investment property is, the lower your ongoing expenses will be. Roughly a $150,000 property is what some experts recommend starting with but it going to be difficult to find such a deal in the Honolulu real estate market. Honolulu home prices may be falling, however prices are often beyond the reach of many Hawaiians.
Although apartment rental prices have declined in the last 12 months, Hawaii is one of the least affordable states to rent or buy as a rental property investor. Limited supply translates to big rent increases. According to the Honolulu Board of Realtors, sales have declined over the past year, however prices continue to climb in the Honolulu real estate market.
Most investors naturally gravitate to residential property investment. When looking for the best real estate investments in Honolulu, you should focus on neighborhoods with relatively high population density and employment growth.
Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Honolulu, HI. The Honolulu housing market is dense, profitable and unable to growth except at the margins.
This will result in high returns for almost any Honolulu real estate investment property. The possibility of staying for free in a Hawaii condo or bungalow you own is just a bonus.
Buying an investment property is different from buying an owner-occupied home. Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor in Honolulu, HI is your ability to find great real estate investments in that area.
According to real estate experts, buying in a market with increasing prices, low interest, and low availability requires a different approach than buying in a cooler market.
We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The aim of this article was to educate investors who are keen to invest in Honolulu real estate in 2019. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor.
Other Best Places To Invest in Real Estate in 2019
The other best place to invest in real estate is Fresno, CA. Fresno is sometimes seen as the boring middle child in a famous family. It is overshadowed by Los Angeles, San Francisco and San Jose. Yet it is free of their many problems, too, while remaining solid and stable. That’s why you can’t afford to ignore the Fresno area.
The median rent in the Fresno area is 1600 dollars a month, though you can rent a single family home in the Fresno area for much more than this. A side benefit of the relatively affordable real estate market is that you’ll pay less in real estate taxes than you would a “hotter” market.
That’s why the theoretically lower property tax rate in LA doesn’t matter, since the average home costs twice as much as one in the Fresno real estate market.
Another sizzling market to invest in real estate is Tulsa, Oklahoma.The Tulsa housing market offers affordable properties, decent rental rates, strong property rights, low taxes and a number of other benefits. You can’t afford to ignore this real estate market when searching for investment opportunities.
It is attractive to many who come here to learn and work, but it isn’t growing so fast that it suffers problems from that growth. These are a few reasons why you should seriously consider the Madison area for investment.
There are several opportunities to profit from short term rentals with a Tulsa real estate investment property. One is offering short term rentals to people relocating to the area or in the area for events like college graduations.
Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, you may fill up the form given here.
One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.
*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Economy guarantees renters
High ROI on approved
Landlord friendly https://www.avail.co/education/laws/hawaii-landlord-tenant-law https://www.rentcafe.com/blog/renting/states-best-worst-laws-renters
Property tax rates
Rental market growth
Housing Market Data, Trends & Statistics
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