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Luxury Market at a Glance: Property Values ​​Rising as Luxury Real Estate Sales Rise

Hawai’i Life just released its 2022 year-end luxury goods market report in Hawaii. Full of island-by-island data, infographics and the year’s most impressive and noteworthy properties, the report shows that across the island chain, the property market grew steadily throughout the year.

Over the past decade, statewide luxury sales have topped every year in both number of transactions and total dollar value except for 2021. Property values ​​also continued to rise across all segments of the luxury market, despite fluctuating interest rates.

While the year-end report compares 2022 to 2021, it also offers a long-term view of the Hawaii luxury real estate market to provide a more accurate picture of where the Hawaii luxury real estate market is and where it is heading.

According to the report, there were no signs of a bottom falling or recession in Hawaii at the time of publication. While the looming recession is still debated, there’s no arguing that demand for luxury real estate across the island chain in 2022 was higher than ever.

In this post, we’ll look at the highlights from the Hawaii Luxury Market Report for the year. For an overview of luxury property market data and insights across the island chain, the company’s performance throughout the year and what we expect in the future!

Hawaii Luxury Market at a Glance: Luxury Goods Sales in 2022 Topped Almost Every Year of the Last Decade 

Luxury goods sales in 2022 have exceeded every year of the past decade in both number of transactions and total dollar value except for 2021, according to a new report on the luxury market in Hawaii. The second quarter of the year was particularly active, with Q2 closings accounting for 38.77% of luxury real estate sales for the year in dollar terms. Moreover, 34.36% of all high-profile transactions in the State of Hawaii were closed in the second quarter of 2022.

By the third quarter of 2022, the record growth in luxury real estate sales that began in the summer of 2020 came to a rather abrupt end. By the end of the year, however, we had yet to see significant depreciation in value. What we did see was a steady increase in property values ​​in every segment of the luxury real estate market in Hawaii (defined as sales at or above $3 million).

Location has been proven to play a significant role in influencing property values ​​in the luxury market. In terms of the ultra-luxury market (defined as sales of $10 million or more), the impressive portion of this segment has been driven primarily by the rarity that many of our ultra-high-net-worth clients value most.

Sales over $3 million statewide included 488 sales ranging from $3 million to $5.99 million, 101 sales ranging from $6 million to $9.99 million, and 63 luxury sales over $10 million, for a total of 652 deals by the end of the year. While this value is down from the unprecedented 838 transactions in 2021, the value is still the second highest in the last 10 years. 

Oahu Luxury Real Estate Market 

In 2022, Oahu’s luxury real estate market growth, which has been observed throughout the year, continued, presumably due to the opening of international markets. By the end of 2022, Oahu had recorded 178 sales ranging from $3 million to $5.99 million or more and 32 sales ranging from $6 million to $9.99 million.

For all of 2022, the Oahu luxury condo market accounted for 57 sales and 3 sales over $3 million. Making up more than 73% of all transactions over $3 million, it’s clear that single-family homes are back in vogue, with 164 homes sold in 2022.

Compared to 2021 and 2022, luxury goods sales on Oahu reached a total dollar value of $1.13 million by the end of 2022, down 3.67% from 2021. Despite this decline, Oahu has outpaced other islands in luxury sales. by 88.72% from 2021 to $200.08 million. 

In terms of total transaction volume for properties at or above $10 million, Oahu also saw greater growth than other Hawaiian islands. The growth the island has experienced has been nothing short of extraordinary: Oahu had 14 transactions in 2022 compared to 7 in 2021, representing a 100% increase.

Kauai Luxury Real Estate Market

The island of Kauai has received more attention this year, in part because of a North Shore estate that was listed and sold to Hawai’i Life. As the state’s most expensive luxury sale, it sold for $36 million after being on the market for just 40 days, well below the average number of days on market (DOM). Down 40.9% from 151.7 days in 2021, Kauai’s average market days in 2022 was 89.6.

In 2022, 60 Kauai deals were in the $3 million to $5.99 million price range, 14 were in the $6 million to $9.99 million range and 13 were at $10 million or higher for a total of $568.03 million.

Of the 87 luxury goods transactions, there were 9 condominium transactions and 5 land transactions. With 73 transactions for the year, home sales on Kauai were particularly strong. The majority of the 87 transactions occurred on the north shore of Kauai, where 47 transactions occurred. Explosive growth was also seen on the South Bank, where 30 luxury items were sold.

Kauai’s sales price of $2,407 per square foot beat the state average of $1,835 per square foot. And Kauai topped state averages with an average listing price of $6.8 million and an average sales price of $6.353 million in 2022.

Maui Luxury Real Estate Market

A look at Maui real estate sales data for 2022 shows that it is in line with pre-pandemic data. By the end of 2022, the number of months of inventory on Maui homes priced over $3 million increased from 9.5 months in 2021 to 18.2 months, indicating that buyers have begun to gain more bargaining power.

In 2022, Maui trading volume of $3 million or more continued to exceed pre-pandemic levels. Valley Island recorded 184 sales of $3 million or more for a total of $1.09 million. Although this is 31.6% less than last year, it is 95.7% more than in 2017. Of the 184 transactions on Maui, 13 were land, 72 were condos and 99 were residential.

Among the most notable sales that topped $3 million were listings conducted by our team on Maui, including a rare two-lot listing in Kihei that sold for $8.38 million in March. Another deal that confirmed Maui was worth pursuing was a 73-acre oceanfront estate in Haiku that sold in June for $15 million. Of the four most populous islands in Hawaii, Maui saw the most transactions over $10 million, with 20 transactions in that segment.

Hawaii luxury real estate market

Hawaii Island saw total luxury transactions of $927.4 million in 2022, more than double the $455.5 million in 2017, before the pandemic. While the state of Hawaii saw a decline in sales, there were 157 luxury sales on Hawaii Island, down just 24.15% from 2021.

The Big Island luxury market remained strong in 2022 with 64 condo sales, 73 home sales and 20 land sales over $3 million. Of the four most populous islands, Hawaii Island had the most land sold, including the largest tract of land sold in the entire state of Hawaii. The 1,834-acre site in Naalehu sold in November for $4.69 million.

In 2022, we saw more seller buyouts and creative financings, with buyers looking to move into the right home immediately. So it’s no surprise that luxury homes in Hawaii stayed on the market for just 69.2 days in 2022. Down 52.2% from 144.8 days in 2021, the island’s average days on market (DOM) was significantly lower than other islands.

In 2022, Hawaii home buyers paid an average of 97.8% of the list price for their luxury properties. And some of the highest home transactions occurred on the Big Island, including 37 total listing sales above the $3 million mark. for a total of $221.74 million.

Looking forward

As 2023 unfolds, Hawai’i Life will continue to take a broader look at the luxury market, examining data over the last decade to understand exactly where the luxury market in Hawaii is and where it is heading. Our capabilities, experience with agency in all its forms (buyer, seller and dual agency) and ability to see the big picture continue to allow Hawai’i Life to increase our market share in this coveted Hawaii luxury real estate space.

Looking ahead, a significant amount of data continues to point to Hawaii’s fundamental economic strength. Demand for luxury homes in Hawaii continues to outpace available supply, and we expect this to continue into 2023.