by M. Anthony Carr
With an economy that has flat-lined, but plagued with more high level jobs than qualified employees, the condo market in Hawaii is showing surprising strength. The Honolulu Star Bulletin reports February was a very good month for condo sellers with prices outpacing February a year ago as high as 19 percent in Kauai to $565,000.
Agents in the island state point to the fact that with a buyers market, high-priced condos (over $4 million) are selling quite well and buyers with money are not afraid to invest now before the turnaround happens.
The state's leading economist, Paul Brewbaker of the Bank of Hawaii, recently used the terms "compression" and "loss of lift" to describe the economic picture in the near future. While real estate and tourism have both flattened over the last year, the state's fastest-growing economic group is the knowledge-based service industries.
Overall the market has done a flip flop. Prices from 2007 to 2006 sky rocketed 40 percent while the number of homes sold dropped more than 60 percent. Meanwhile, some surmise the increase in price continues because of the scarcity of land to build any more units.
Following several years of strong job growth, the simultaneous lull for both real estate and tourism means slower economic growth, however, Brewbaker says the area faces "a serious skill imbalance in the county. That is, there are jobs open but no qualified people to take them."
Published: April 2, 2008
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Mr. Carr has covered real estate since 1989. He is the author of