Hawaii Real Estate Future: Market Condition and Prediction

By: David Kucic, RA
CRS, GRI, ABR, e-PRO, AHWD
First Sergeant, USA (Retired)
Tropic Lightning Real Estate, Oahu, Hawaii
Military Relocation Expert and VA Loan Homebuying Specialist

HAWAII REAL ESTATE MARKET PREDICTION AS OF FEBRUARY 7, 2008

Consumers always ask me what I think the future of the Hawaii Real Estate Market is.  My response never changes when I tell them that I don't know for sure and neither does anyone else.  It is just like trying to predict anything else in life only a heck of a lot more complicated.

So does anyone know what the future of the Hawaii Real Estate Market is?  No.  But.........we are pretty lucky to have a man named Paul Brewbaker that can give us a darn good idea.  Yesterday I was invited to the Hawaii Convention Center in Honolulu to listen to Paul Brewbaker talk about the subject of Hawaii Real Estate.

Paul Brewbaker is the Senior Vice President and Chief Economist with Bank of Hawaii.  Bank of Hawaii was voted the best managed large bank in 2007 so this was not some clown speaking.  When Paul Brewbaker speaks, people listen.  He is pretty damn funny too and incorporates some excellent humor into his presentations.  Paul Brewbaker received his bachelor degree in economics from Stanford University and his Doctorates Degree in economics from the University of Hawaii. 

What Paul does is studies trends and statistics in a way that you could never imagine.  He ties all of the economic indicators together to come up with awesome easy to read and understand charts and graphs.  It is a hell of a lot more complicated than what I am explaining but I am breaking it down so everyone can understand it just like he did for us.  His charts and graphs showed what happened in the past with the Hawaii Real Estate Market, what is happening now and what a statistical prediction is for the future.  Thats why I went to listen.

Here is my recollection of a few points that Paul made during his presentation which were the most important to me.  I beleive that these points highlight my feelings and excitement for anyone wanting to purchase real estate in Hawaii over the next several years:

• The Hawaii Real Estate Market may hit its low point sometime this year (2008) between March and June.
• After that time, Hawaii Home Prices are expected to gradually increase as personal income increases so that the two will stay in line with eachother.  This trend will continue until approximately 2012.
• Prices are predicted to start increasing in 2013.
• We do not have a lot of sub-prime problems in Hawaii.  This is not because there were not sub-prime loans given out but for some unexplained reason, HAWAII RESIDENTS PAY BACK THEIR LOANS!
• Hawaii is number 51 out of 52 states for defaults of loans.  The only state that has a lower amount of defaults is Alaska.
• Hawaii has a huge presence of Military with the bases at Schofield Barracks, Wheeler Army Airfield, Ft. Shafter, Pearl Harbor, Hickam Air Force Base, Marine Corps Base Kaneohe, Camp H.M. Smith and Tripler Army Medical Center to name a few.  Across the nation, 4% of the Gross Domestic Product is from Military Spending.  In Hawaii, the percentage is much larger at 8%.
• China will play a major roll in the future of Hawaii Real Estate because the value of their currency is gaining strength.  They may not be purchasing Hawaii Real Estate as individual investors but they may be looking at large purchases of land, buildings and businesses.
• During our last buying frenzy in Hawaii, it was people from California and a lot of baby boomers that were purchasing in Hawaii.
• Another country that may be purchasing Hawaii real estate on a larger scale is Korea.  They have increased (tripled) the amount of money that the Korean nationals can invest abroad.

If you are sitting on the fence post trying to figure out if it is a good time to jump in to the Hawaii Real Estate Market then you may want to make your move sooner rather than later.  With excellent interest rates, a large inventory of homes and low prices what else could you be waiting for?

For all of your Hawaii Real Estate needs, professional advice and responsive service, visit Team Kucic on the web at:

www.davidkucic.com

www.TropicLightningRealEstate.com