It was hard to believe local economist, Paul Brewbaker, who predicted in 2003 that median price of single-family homes on Oahu could soar almost 60% from $380,000 to a high of $600,000 by 2005. The actual median price in 2003 was $389,250 and in 2005, increased to $627,500, so he was right on the mark.
The University of Hawaii Economic Research Organization predicts the median Oahu home price will reach almost $800,000 in 3 years. They see the present market as somewhat similar to the market around 2000. The forecast is based on a recovering economy led by record tourism, historic low interest rates, declining inventory and a shortage of new home construction. The home price forecast for 2015 represents a 37% jump from last year’s median price of $575,000 and a 22% gain from the prior peak in 2007.
Mike Sklarz, President of Collateral Analytics doesn’t expect quite as much of a run up in prices. He predicts the median home price by the end of 2015 will reach $734,000, not as strong and the UH prediction, but in the same direction.
Brewbaker considers both projections low and expects median prices in the $700,000 by next year. He doesn’t see anything on the horizon that will keep Oahu home prices from a major rise. Brewbaker said, “People can believe what they want, but they will probably look back on things in 2015 and say that they should have bought real estate a year ago (meaning 2011). Three years from now they’ll wish they had”.