Hawaii Real Estate Sales in 2024

Photo byAlisa MatthewsonUnsplash

According to Hawaii Business News, there was a 30% decrease in real estate sales in 2023. The median price of a single-family home decreased in 2023 to $1.06 million. With the high cost of single-family homes, many buyers turn to condos in the islands because they're cheaper than a single-family home. The median price of a condo in Hawaii is just over $515,000.

There is still a hidden cost in the condo market. Many of the condo buildings on Oahu are underinsured because of hurricane insurance. About 390 condo buildings, with some newer high-rise ones, need the required hurricane coverage. That means the insurance coverage does not cover 100% of the replacement cost.

It means many local banks will only loan money to homebuyers with 100% insurance on the condo building. You may have homeowners insurance within the four walls, but the building is underinsured.

As a condo owner for over 20 years, I have first-hand experience of being turned down by four banks for a HELOC. I have homeowners insurance, but the condo building still needs to be fully insured. Banks won't loan money to anyone, including first-time home buyers who want to purchase a condo in one of the many buildings in Hawaii without the 100% insurance replacement cost.

While interest rates may decrease in 2024 to spur more interest in the Hawaii real estate market, many of the sales won't happen in 2024 because banks will not loan money to homebuyers who want to purchase condo units in one of the affected buildings.

Final Thoughts

As optimistic as some in the real estate industry may be, a huge stumbling block will be the skyrocketing cost of hurricane insurance rates. Unless something changes, most banks won't loan money to a home buyer wanting to purchase a unit from many of the affected condo buildings.

Also, how many first-time home buyers in Hawaii can afford the median price tag of a single-family home of $1.06 million? I don't see many waiting in line to buy a $1.06 million single-family home.