Latest Oahu Areas Analyses – Buyers’ or Sellers’ Markets?

By Damon Rhys February 19, 2019

Oahu Buyers' or Sellers' Markets

Test! Knowledge is Wealth!

So would be beforehand knowledge of the 4 Rates that can both create and moderate wealth. These 4 Rates are Interest Rates, GDP Growth Rates, Inflation Rates and – especially important in Hawaii – Exchange Rates. In the following 2nd article below the 4 Rates will all be addressed in conjunction with predictions for 2019 that could affect the Real Estate Market here in Hawaii. First though, the main topic of this column is meant to be an important update of the May 2018 Buyers’ or Sellers’ Market Analyses for many neighborhoods on Oahu. For both Buyers and Sellers it is important to know if you are buying or selling in a Buyers’ Market or Sellers’ Market – strategies should be planned accordingly! In previous Hawaii Damon Newsletters we reviewed strategy so will not delve too much into that topic this month. However, the links to those previous newsletters are now posted on the blog section of the Hawaii Damon website and can be found here: Market Strategies for Buyers and Market Strategies for Sellers. Please check them out. For this month we will simply focus on identifying the actual Buyers’ or Sellers’ Markets themselves on Oahu with some actual data for several neighborhoods. I’ll make it easy to understand and if the neighborhood you are (interested) in is not reviewed this time please do not hesitate to contact me here and I can get you a full analysis on your requested neighborhood – usually by the next day we’ll let you know and have it uploaded to the Hawaii Damon website.

Are You in a Buyers' or Sellers' Market?

In the main article of the last Hawaii Damon Newsletter we discussed “elasticity” (think of a rubber band) of demand in the Hawaii Real Estate market. It simply means how quickly and how far prices react to overall demand and supply. Real estate in general is fairly elastic. When most people move they figuratively pick up their home and take it with them – literally speaking, they move the equity in it by selling and buying elsewhere. Most people do not have the luxury of owning more than one property – at least not until later in life. In other words, elastic demand/supply means prices will normally rise when supply is low and demand is high and vice-a-versa. It is also a function of and highly affected by the 4 Rates mentioned above. For a full review of the main article of the last Hawaii Damon Newsletter please check out: Buy A Luxury Home in a Buyers’ Market

Real Estate Prices Can Be Sticky For Luxury Properties

Just as the cheeky graphic above indicates, prices in luxury home neighborhoods can be more “inelastic” (sticky) than median neighborhoods for various reasons discussed in last month’s newsletter. In other words, in times when there are large inventories of luxury homes which is the case now, prices tend to be stickier in luxury neighborhoods and do not decrease as fast or as much as would a normal median neighborhood. Most of the Oahu Luxury Home neighborhoods are in Buyers’ Markets (large inventories – complete opposite of Median Home neighborhoods which currently have small inventories and are in Sellers’ Markets). Current inventories for luxury home neighborhoods – defined as homes over $1.9M – are on average 14.8 months. For luxury condos – defined as condos over $700K – they are at 8.6 months. To put it into perspective a neutral market (neither Buyers’ or Sellers’) would be 5-6 months of inventory. If you are a Buyer and have an astute Realtor, he or she should be able to “sniff-out” the luxury home bargains and the sellers willing to let go at a significant discount to their asking price. If you are a Seller and have a talented Realtor well versed in staging techniques, you can really make your home stand out of the crowd – regardless of it being a Buyers’ Market in your luxury home neighborhood.

Elasticity of Demand for Real Estate

Market Analyses by Neighborhood: (Condos below)

Waialae Iki Ridge Area Overview (from the Hawaii Damon Website, Waialae Iki Area Page) – One Luxury Home neighborhood bucking the Buyers’ Market trend is the Waialae Iki Ridge neighborhood. Although it is not altogether surprising since it is an entry-level luxury neighborhood with many semi-luxury homes. This beautiful neighborhood on the adjacent ridge to the West of Hawaii Loa – also with beautiful ocean views – straddles the price range between luxury homes and just one level below. It is conveniently located just East of Kahala thus making this neighborhood easily accessible and just a short commute to the downtown Honolulu areas. It is also within a short driving distance to several of the well known private schools where many residents in this neighborhood choose to send their kids.

Waialae Iki Homes – Market Update and Forecast for 2019:
Waialae Iki currently has 4.3 months of inventory as of Q4 2018 and had 7.5 months as of last Q4 2017 – inventory has almost halved reversing this neighborhood from Buyers’ to Sellers’ Market territory. The actual data and a CMA (comparative market analysis) for Waialae Iki can be found here. If you have ever been thinking of buying a home in Waialae Iki, now would be a great time to do so before inventories decrease further. Lower inventories translate to more bargaining power for Sellers.

Waialae Iki Homes for Sale – Click the graphics here for all current listings:

For analyses of other neighborhoods just click on the one of the graphics below and it will take you to the Hawaii Damon website with a full explanation and analysis similar to the one included above for Waialae Iki – including all current listings.

Have fun! (I will be adding new neighborhoods to our website so please do not hesitate to contact me if the one you are interested in is not included below. We can usually have it ready within 24 hours).



Condos

Gold Coast – One of Oahu’s most prestigious luxury condo areas, the Gold Coast between Diamond Head and Waikiki boasts of some of the most expensive real estate per square foot on the planet. Currently it has 14.9 months of inventory and had 8 months as of last May – significantly increasing rocketing it into extreme Buyers’ Market territory. If you plan to sell your Gold Coast Condo soon please contact me or find another skillful Realtor in 5 Star staging techniques. For Buyers it is a great opportunity to find bargains. The actual data and a CMA for the Gold Coast can be found here (fee simple properties only). Dedicated Gold Coast Area Section on the Hawaii Damon Website available from Jan 11th, 2019.

Hawaii Kai – Not only does Hawaii Kai have beautiful luxury and semi-luxury home neighborhoods (Portlock & Koko Kai, Napali Haweo & Upper Hahaione – see above), it also has a plethora of condos and townhouses to choose from mostly in the Lower Hahaione and West Marina neighborhoods. Families in these neighborhood can also send their children to either Hahaione or Koko Head Elementary Schools both of which recently implemented the IB (International Baccalaureate similar to some of the private schools in town yet this is a public school – read more about it here). Currently the Hawaii Kai condo neighborhoods have about 4.6 months of inventory placing them, on average, in mild Sellers’ Market territory with pockets of “Goldilocks Zones” in certain buildings approaching the luxury condo category. The actual data and a CMA for Hawaii Kai condos can be found here (fee simple properties only). Dedicated Gold Coast Area Section on the Hawaii Damon Website available from Jan 11th, 2019.

Kakaako, Waikiki & Ala Moana – There are so many condo buildings in these areas with a wide range of prices that they surely deserve to be the main topic of another newsletter. Nevertheless, many of the upper end luxury condos mostly in Kakaako (please see my previous newsletter covering Ward Village here) are in Buyers’ Market territory with some really good value to be found. The average inventory for all of Waikiki condos is just under 6.8 months putting it in mild Buyers’ territory (again 5 to 6 months inventory is the “Goldilocks Zone” – not too hot and not too cold). I have a lot of expertise in these condo areas working with both home/condo buyers along with investors so please do not hesitate to contact me for details on various potential possibilities. The actual data and a CMA for Waikiki condos can be found here (over $700K). For under $700K condos, the data is too large to put on a .pdf so will have it available on the Hawaii Damon Website soon. Dedicated Kakaako, Waikiki & Ala Moana Condo Sections on the Hawaii Damon Website available from Jan 11th, 2019.

Legacy SE Kakaako – Here is the link for the full analysis on SE Kakaako Area (includes the legacy buildings Hokua, Koolani, Nauru Tower, Hawaiki Tower, Waihonua, 1350 Ala Moana – all offering great value now):

Though I am busy, if you have taken the time to read this and my other newsletters, I would definitely make a priority to work with you – no matter your price range – Buyer or Seller.

 

Knowledge is Wealth!

Aloha!

Damon Rhys

*Disclaimer: Any opinions expressed in this newsletter are that of Damon Rhys only and do not necessarily reflect the views of his brokerage firm, Sachi Hawaii Pacific Century Properties. Though knowledgeable including Management Science / Quantitative Economic Decision Science & Master (MPIA) Degrees from the University of California, Damon Rhys is a licensed Realtor in the state of Hawaii. He is not a licensed Financial Advisor. For any specific investment decisions, it is advised that one consults with a licensed financial advisor.

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