Weak Dollar is Great for Oahu Real Estate

Recently I have been seeing more and more activity from Canadian, Australian, and Japanese buyers. The recent $23 million purchase in Kailua demonstrates how powerful the Japanese buyers can be.

Canadians too have more buying power, with about a 30% rise in their currency lately, and 50% over the last several years. Canadians, especially on the west coast, are finding great opportunities to buy Oahu real estate at a reduced cost for them. Vacation homes, retirement homes, and investment properties are all popular ways for foreign investors right now, all fueled by the weak dollar policy that the Fed claims they don't have, but do.

The Yen has gained over 15% on the dollar in one year, which makes Oahu real estate very attractive right now. What do these foreign buyers want? Some want a regular little home, but most want ocean front condos or luxury homes in the several million range.

Luxury Oahu real estate is the biggest benficiary, as wealthy foreign investment here is going strong even as the US economy lags. I recently showed $2million condos to Canadian investors who were glad they waited until their currency bought them more real estate for the same money. They didn't spend any less than they would have last year, but they can get a larger condo than they would have, and with an ocean view.

Condos like Koolani, Keola Lai, Colony Surf, and others in Waikiki and Diamond Head are very popular for vacation or investment properties on Oahu.

Population of Honolulu goes down, home prices too.

In the News today: Honolulu's estimated population was about 905,601 in July 2007 which was a 0.1 percent decline. The Census bureau estimates there were 1,114 fewer people in Honolulu on July 1 than a year earlier

It's hard to believe there are over 900,000 people on this island, when you consider that it only takes about 40 minutes to get from one end to the other. Also, most of the people live along the south side, right in Honolulu town, while much of Oahu remains uninhabited. If you drive up to the North Shore from the Windward side, you'll see there is still plenty of space on Oahu for people to live, there just isn't much infrastructure out there.

This leads me to wonder how many people this island can sustain without being in massive trouble. How much water, power, trash, sewage, etc, can the island sustain? How many more people can move here before the amount of housing just completely runs out? How many more people can the freeways and roads handle?

All these things point to the cost of real estate rising in Hawaii forever. That is, until the Lord returns.

Honolulu Homes For Sale

There are currently 1924 homes for sale on Oahu, and of course the entire island if the city of Honolulu. There 2476 condos for sale in Oahu, with a median list price of $339k.

That's the higest list price in the history of Oahu real estate, which just shows how strong our market is compared to other states. Single family homes on Oahu are listed at a median price of $675k.

There were 287 Condos sold in metro Oahu, this year through February 29th, with a total of 548 condos sold island wide. That's down 21.7% since last year, when 700 Oahu condos sold. However, the average sales price is up 3.7% sinc last year, and the median sales price of Oahu condos is up 4.1% since last year.

All around Oahu, real estate is selling at record levels. In Moanalua and Kalihi, median prices are now $742,500, compared to just $600k last year. While the number of homes sold has dropped by 32.1%, the median price has risen 23.7%!

In cored Honolulu, the median price of homes was $780k, compared to $796,500 last year, a drop of 2.1%, so it's not all up everwhere, and the number of sales was down from 20 to 11 sales. Honolulu home sales are still strong, but not as strong as last year.

In Hawaii Kai, median prices were up to $1,035,000, up from only $816,500 last year. That's a whopping 26.8% rise from last year, even though the number of sales in Hawaii Kai homes was down 35.7%. Hawaii Kai just seems to be the most desireable place for many people, especially those moving to Hawaii from the mainland.

In Kailua, the median price is down to $762,500 from last year's $792k, and sales are down 50%, but inventory remains low overall, with only about 8 months of homes on the market. Compare that to over 2 years of inventory in other states, and you see that Kailua real estate is also very healthy.

Molokai gets bad news, Oahu real estate is more stable as always

This morning's paper reported that Molokai farms is shutting down, taking 120 jobs away from the sparcely populated island. On an island with only a few thousand people and nowhere else to work, that is huge news.

People ask me everyday which island they should live on and start a business, and I always tell people that Oahu has the most stable economy and infrastructure. If you move to Maui or Kauai and try to start a business, you're going to be in for a rude awakening. In most areas of Maui, Kauai, the Big Isaldn, and Molokai, there aren't enough people to support a new business, and if you don't know anybody you'll have a hard time getting the word out. Traditional advertising doesn't work very well on those islands.

Oahu has nearly 8 times the population of other islands, with new people and new businesses springing up all the time. The closing of one business doesn't effect our island's economy the way it would effect a smaller island.

Oahu has a very deep and diversified economy that allows newcomers to easily get started and thrive. And that is exactly why Oahu real estate has been more stable than the other islands in this current market. While the neighbor islands' markets have dropped dramatically, Oahu real estate has been one of the most stable markets in the entire country.