Corcoran Pacific Properties is pleased to present a closer look at the luxury real estate market in Hawaii, which includes detailed statistical analysis of Kauai, Oahu, Maui, and the Island of Hawaii for May 2022.
This month we question whether the high demand for luxury properties in Hawaii has begun to change. We measure the facts against recent news reports that inventory levels in the U.S. have shifted upwards dramatically during May and there has been a significant decrease in the number of sales year-over- year.
Analyzing Hawaii’s luxury single-family home market, we do see an increase in the level of inventory available in May compared to previous months, however compared to May 2021 the number of properties for sale is 6% lower. Interestingly, we also see a fall in the number of sales in May, after the previous four months reported steadily increasing numbers and compared to 2021 there was a 15% decrease. Prices, however, have remained steady.
To put this into context, despite the obvious softening of the market compared to May 2021, when compared to pre-covid numbers May 2022 statistics still show over 100-150% more sales, and inventory levels at least 40% lower than average.
Turning to the attached luxury property market, and a slightly different picture emerges. Inventory levels may have increased in May 2022, but unlike the single-family market they had already been steadily increasing month-over-month since January 2022. Compared to May 2021 there was a 14% rise.
However, offsetting this rising inventory level there was also a growth in the number of sales. May 2022 registered a 32% increase in sales against May 2021, although there was a small decrease in numbers against previous months. However, price points remained steady.
In context, the luxury attached property market is not seeing any significant softening, sales are up compared to May 2021 despite the increase in inventory levels. In comparison with pre-covid numbers, sales are over 150% higher and inventory levels are at least 30% lower.
These statistics provide two key insights. Firstly, it is expected that the velocity of price increases will level off, especially if more properties continue to come onto the market and the pace of sales slows. Secondly, economic uncertainty, rising interest rates, volatile stocks, supply issues and increasing costs of living will have a bearing on the rate of purchases as we go through the rest of 2022. However, it is predicted the luxury real estate market will remain strong as luxury buyers remain focused on buying homes that offer them refuge as well as a good return on investment.
It is unlikely that inventory levels will change significantly over the next year which is why it’s important to work with one of our local real estate experts, who are both familiar with local trends and will be your best resource to navigate this challenging market.