Real estate is booming in Hawaii.
With the population expected to grow by nearly 20 percent over the next 20 years, and the state’s population projected to double to more than 20 million by 2060, many of the city’s most popular places are becoming more and more affordable.
The biggest changes in the housing market are happening at the high end, but a new report from real estate website Zillow predicts the trend is going to accelerate in the coming years.
“The market is going through a pretty dramatic change,” said Paul Bresson, vice president of real estate for Zillot, in an interview with Real EstateWire.
“The next wave of growth will be in the middle of the market, and as that trend continues to grow, it will be a lot more affordable.”
A typical house in Honolulu, Hawaii.
The growth of the middle market is a good sign for the city, which is still recovering from the aftermath of the massive 2008-2009 recession, Bressoron said.
Honolulu has seen more than 500,000 home sales in the last two years, up from more than 350,000 in 2014.
The city’s median price of $1.3 million is a record for Honolulu, which has seen median prices of $939,000 and $1,053,000 since 2010, respectively.
According to Zillovest, the median price for a home in the city is now around $1 million, up by more than 50 percent from 2015.
The median home price in the state of Hawaii is now $2.2 million, down from $3.2 millions in 2015.
Honolulu’s median income is now at $65,900, up 14 percent from $55,900 in 2015, and its median home value is now over $2 million.
Zillow said the growth in the market is expected to continue for the next several years.
The company forecasts the median home prices for 2020 to reach $2,000,000.
The market will continue to see a rise in prices, which will continue pushing more and better-to-rent houses into the middle, Bessoron explained.
With the trend of rising home prices coming to a halt, the city may need to look beyond Honolulu to find new housing.
Bresso said the state is in the process of looking at building a $2 billion housing project that will be used as a mixed-use community with retail and restaurants.