High-End Housing Market in Hawaii Remains Strong

Hawaii mortgage rates have fallen below six percent recently - but this development is yet to open doors for lower-income buyers.

On the other end of the spectrum, however, million-dollar homes in Honolulu are selling better than the overall housing market and seem less affected by current market slowdowns.

A quarterly analysis of the market from Prudential Locations finds that the number of days on market for homes priced above $1 million rose 27 percent in 2006. For the overall Honolulu housing market the time rose 68 percent.

“The market for million-dollar homes is smaller than the overall market,” said Vice President of Sales Scott Higashi, “and buyers and sellers in that market are typically less price-sensitive.”

The Prudential Locations report Wednesday said the months of remaining inventory at current sales rates grew 83 percent last year, but for million-dollar homes it grew only 14 percent. There’s logic in these figures: higher-end borrowers needn’t worry about Hawaii mortgage approval. If they need a mortgage at all, that is.

It still takes longer to sell a home as the price tag rises: homes priced below $1 million were on the market for just a few weeks - at the $2 million level the sales time is measured in months.

The overall Oahu housing market for existing single-family homes saw a median price of $620,000 in 2006, up 6.8 percent, which Prudential Locations described as “a respectable price gain, although a smaller appreciation rate than in recent years.”

East Honolulu median prices fell 5 percent, but every other region of Oahu saw gains. The East Honolulu area stretches from Waialae to Kuliouou and includes several luxury ridges and beachfront neighborhoods. It’s a popular area for home purchase loan borrowers.
But the report said there was wide variance from community to community, with prices soaring on Hawaii Loa Ridge, while sales volume grew in moderately priced neighborhoods within this area.