New numbers out today show that the housing market in Hawaii is about 50% overvalued and that there is still much more to come for real estate investors.
The median home price in Hawaii was $1.2 million last year, and median household income was just $41,836.
The average price per square foot was $3,900 in 2017, up from $2,700 a year ago, according to new data from the National Association of Realtors.
This is a record for Hawaii.
Hawaii is not only home to some of the world’s largest and most affluent economies, it also houses some of America’s wealthiest.
The island is also a magnet for big-time tech companies like Amazon and Google, and a magnet to some big-name investors.
Real estate experts believe the trend is about time, but the numbers are not good.
“There’s been a lot of noise about this in the past couple of years, but there hasn’t been much real estate activity in the state for quite some time,” said Michael J. Leung, chief executive officer of Leung Holdings.
“It’s not surprising that this has slowed down.
It’s not a surprise that the market is overvalued.”
The biggest gains were in Hawaii’s biggest metropolitan areas, which added $6.5 billion in 2017.
Honolulu and Maui both added more than $6 billion.
Hawaii has the largest population of any state and is a big financial center, and there is plenty of room to grow.
But the real impact will come from a new trend: The number of people living in Hawaii will more than double from 4,835,000 in 2020 to 6,054,000 by 2030, according the NAR.
“I think the real question is whether or not this will be a positive development for the state,” said David O’Brien, chief economist at the realtor and broker O’Brian.
“Is it going to continue to be a strong economic engine for the entire state or is it going be a drag for the rest of the state?”
The new numbers show that a lot has changed in the last two years.
Hawaii’s population increased by 10.2%, while its income grew by 11.9%.
The state’s median household incomes fell by 5.9% and the median household debt rose by 6.5%.
Hawaii also had the fastest population growth in the country, adding 7.7% to its population.
Hawaii also experienced the biggest job growth in all of the country.
Hawaii added 1.2% of its jobs last year and is now expected to add 2.2%.
The numbers will help drive interest rates down on residential real estate in the next few months.
The Federal Reserve’s next interest rate decision will be on June 15.
The recent surge in the housing price bubble is being felt in other parts of the US, with home values falling in many cities, including Miami and Seattle.
The latest housing market data has put pressure on mortgage rates, but they are still low and investors can borrow at relatively low rates.
“Real estate is still the most affordable form of borrowing for a lot longer than people think,” said Leung.
“If you have a home in Hawaii that you can live in for a year or two and you can’t get a mortgage, that’s not an option for most people.”
But if home prices continue to rise and the Fed decides to hike rates in September, it could cause another housing bubble to burst.
“We’ve seen housing prices explode over the last year or so,” said O’Reilly.
“So the question is, does that create a drag on the rest, or does that help the real economy in a way that we need it to?”