I just attended the CCIM/BOMA 2013 forecast for Hawaii, and I learned a lot about what to expect out of the next twelve months.
27% of all transactions in our state last year were multifamily. That’s mostly because there were two huge projects that changed hands. Usually it’s about 8-10%
83% of those transactions were done by local buyers; the non-resident investor properties purchased were mostly $25M and up.
Rental rates are stabilizing and slated to increase for 2013 as lenders continue to have stricter regulations on loans and higher cash flow expectations.
The home ownership rate in our state is 65%–the lowest it’s been in 15 years. Where are the rest of our residents living? In rental units!
Lenders are also waiting for the green light to raise interest rates; something the FED has said will happen when the unemployment comes down to about 6%. The rates will likely rise to between 4-4.6% by the end of the year.
Hawaii’s unemployment is slated to decrease to about 4% in the next two years, and inflation is supposed to rise to about 2%, which means we have about a 2-year window on the up market before the “bust” comes.
In other words, it’s a great time to buy real estate–especially multifamily–in Hawaii!