Hawaii’s overall economic conditions will be better in 2018 than previously projected, a report from the state Department of Business Economic Development and Tourism noted. Entering the new year, the economy will demonstrate positive signs such as a higher minimum wage rate.
How about the real estate sector in the state? The market performed well, with median home sale prices up for all counties in 2017, and growth remains an expectation in 2018. The Honolulu housing market in particular has appreciated in the last years to the point where it was able to remove itself from a period of post-recession price weakness. Both supply and demand there are buoyed by an equally strong job sector, where the unemployment rate continues to decline despite being nearly 2 percent lower than the national average.
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Different trends will shape Hawaii and U.S. real estate in 2018. The housing sector in particularly will see the following:
Increasing inventory
Realtor.com projects an uptick in year-over-year inventory growth into positive territory by fall 2018, a first since 2015. Recovery for starter homes, though, is expected to take longer, as they have been significantly depleted by first-time buyers.
Slower price appreciation
Home prices are seen to slow down to 3.2 percent growth YoY nationally, from an estimated 5.5 percent increase in 2017. Entry level homes, however, will continue to see prices go up due to the bigger number of buyers that can afford them and more limited homes up for sale in the price category.
Millennials gaining higher market share
This is expected in all home price segments despite millennials facing challenges in the form of rising interest rates and home prices. Such factors are attributed to the sheer size of their generation, with the largest cohort of millennials anticipated to turn 30 in 2020.
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Image Source: Pixabay.com
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Kimberly Dey is an entrepreneur currently serving as the President of Renaissance Property Associates in Oyster Bay, New York. Aside from her activities in the Hawaii and Long Island business communities, she continues to play an active role in charitable organizations. Learn more about her work from this site.
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