With the median sales price of homes on Oahu hitting $700,000 last summer, there's been a lot of concern about affordability for buyers in the marketplace. While this is understandably so for your average home buyer, our luxury market could have a ways to go.

Kahala Home Listed for $22 Million

Kahala's priciest listing (MLS # 201400491) for $22 million

Back in the "Japanese bubble" of 1987-1991, it was common place for homes to sell north of $20 million in Kahala. With a new era of Buyers coming in to the marketplace and purchasing homes from Alexander and Baldwin's portfolio, Kahala is back on an upswing. A number of those transactions took place privately last year, so not much is reflected on the books in MLS yet for 2014. By this time last year, we had four closings above $10 million for a total of 7 on the year. So far this year, we've only had 1 in Lanikai that sold for $11,845,000 in June.

Although the "high end" has been a little bit slower this year, there are other luxury markets across the United States that are cranking. I recently received a market update from a colleague of mine in New York City- Louise Phillips Forbes with Halstead Property. Here are some of the highlights from her summer update:

  • New Development Prices are up 44% in all neighborhoods
  • Co-Op Prices are up 23% and 27% for 3 bed and larger apartments
  • The average price for a Manhattan apartment is up 30%
  • There are 298 homes on the market over $10 Mil.
  • There are 119 homes in contract for over $10 Mil. 

Here's a chart to put things into some perspective when comparing New York's market to ours:

New York Luxury Market Compared to Oahu, Hawaii

The red bar shows our true numbers. Currently, there are 24 home/condo listings on Oahu at $10 million or higher. We currently have none (showing in MLS) under contract at that price. So, one could make the argument that New York's population is 10 times more than ours, so I adjusted our inventory 10 times. Although that puts our high end inventory closer to theirs, it in no way compares to the number of properties they have under contract north of $10 million! This is another reason I see Honolulu real estate prices are still a bargain.