A Record Year for Hawaii Real Estate

If you followed Hawaii real estate last year, or know anyone who bought or sold a home in 2021, you probably already know that the market was hot. So hot, in fact, that it broke several records in 2021 —on Oahu as well as on the neighbor islands.

Sales soared statewide

Statewide, single-family home sales in 2021 were higher than any prior year, including 2005 — the previous high. Statewide condo sales were the highest in 16 years but fell just short of the record high. Compared to 2020, single-family home sales increased by 17% on Oahu, 30% on Maui, 20% on Hawaii Island and 39% on Kauai. The jump in condo sales from 2020 to 2021 was even more pronounced, with a 52% increase on Oahu, 73% increase on Maui, 57% increase on Hawaii Island and a whopping 92% increase on Kauai. Oahu home and condo sales accounted for the bulk of all Hawaii sales in 2021.

Prices climbed higher

Median single-family home and condo prices rose on all islands in 2021. The median single-family home price increased by 20% on Oahu, 25% on Maui, 17% on Hawaii Island and 36% on Kauai. The annual median price for single-family homes crossed the one-million-dollar mark on Kauai and came very close to it on Oahu and Maui. The median home price on Hawaii Island remained under $500,000 last year; however, it’s important to note that more than half of those sales are on the east side, where the median price is $336,000. On the west side of the island, the median single-family home price was $865,000 — closer to prices on the other major islands. For condos, the median price increased by 9% on Oahu, 13% on Maui, 22% on Hawaii Island and 11% on Kauai.

Low for-sale inventory

There were fewer than 1,000 single-family homes for sale statewide in December 2021 — a record low. The number of single-family homes for sale last year decreased by 28% on Oahu, 35% on Maui, 36% on Hawaii Island and 43% on Kauai. The number of previously owned condos for sale at the end of last year fell even more — down 35% on Oahu, 80% on Maui, 83% on Hawaii Island and 75% on Kauai.

Stiff competition

Competition among buyers also reached record highs in 2021, thanks to strong demand from local and off-island buyers and low for-sale inventory. On Oahu, 58.3% of homes and 36.2% of condos were sold for above asking as a result of bidding wars. With accelerated competition among buyers, properties sold in record time last year. Single-family homes were on the market for a median of just 10 days on Oahu in 2021, while condos were on the market for a median of 13 days. The last time homes came close to selling this quickly was 1978.

What to expect in 2022

Those looking to get into the Hawaii real estate market shouldn’t wait for prices to fall. According to Locations’ Research Department, single-family home and condo prices will continue to rise this year, though perhaps not as sharply as last year. Competition is also likely to remain stiff, although there are some indicators that point to easing in the single-family home market. More good news: Mortgage interest rates are expected to remain near historic lows for most of the year. However, just like last year, the market is expected to continue favoring sellers in 2022. A well-priced, well-maintained property is likely to sell quickly and for at or above the asking price. Remember, market conditions can vary greatly from neighborhood to neighborhood, so it’s best to consult a knowledgeable Realtor® before buying or selling a home.