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HOUSING PRICES The unique aspect of Hawaii's housing market <br /> history is the length of time that prices remain <br /> The most distinguishing characteristics of fairly steady after a run-up. Prices drop, but by <br /> Hawaii's housing market are its high prices and lesser amounts and at a slower pace than in <br /> cyclical nature. Figure 7 shows representative other high-priced markets. <br /> data 16 for Honolulu housing prices in current <br /> dollars and Figure 8 compares Hawaii housing At the beginning of a run-up in a high-priced <br /> prices with those of other states. housing market prices are relatively low, <br /> household incomes have caught up with or even <br /> Our last two price run-ups are clearly indicated. passed home prices, and affordability is high. <br /> In both cycles, housing prices more than People start buying houses and prices rise. The <br /> doubled in a few years. Both periods of inability of incomes to keep up with housing <br /> expansion ended quickly, after which prices prices eventually stalls even the most persistent <br /> dropped slightly, held in place, and then dropped run-up. Sales drop off quickly and the process <br /> again. The period of adjustment following the begins anew. The length of time the average <br /> last run-up was nearly a decade long. price holds after a run-up defines the recovery <br /> The intensity of the run-up periods is not unique period. <br /> to Hawaii. West Coast States, New England, In other high-priced markets, prices fall, incomes <br /> New York, Washington D.C., and Miami have rise, and affordability is recovered. In Hawaii, <br /> similar profiles. New York, Boston, and Los prices remain relatively high and it takes longer <br /> Angeles have had higher home prices than for incomes to catch up and restore affordability <br /> Hawaii in some recent years. San Francisco's to the market. Nationwide, high-priced real <br /> price history is a bit more volatile than Hawai i's. estate markets lost more than 50 percent of their <br /> boom-years gain by the end of 2009 (Glaeser, <br /> Figure 7. Housing Prices in Honolulu, 1980 2009). In Hawaii, prices have been steadier <br /> to 2011 than that. <br /> 700000 Figure 8. Housing Prices in Six High-Price <br /> —SF Price Markets, 1985 to 2010 <br /> 600000 _Condo Price $100 <br /> 500000 $90 San Diego <br /> Boston <br /> 400000 $80 Los Angeles <br /> �SanFrancisco <br /> 300000 0 $70 — — •New York <br /> 0 Honolulu <br /> 200000 0 $60 <br /> N <br /> N <br /> 100000 a $50 <br /> u <br /> ff- <br /> 0 ° $40 <br /> m a ti N m a ti N m a ti N m a � <br /> C7 C7 C7 C7 C7 C7 C7 C7 C7 C7 C7 C7 C7 C7 $30 <br /> o rL L� r�, m a 6 ob o m rn r�, m <br /> m m m m 0 0 0 0 0 <br /> m m m m m m m m m 0 0 0 0 0 $20 <br /> N N N N N <br /> Source: University of Hawai'i Economic Research $10 <br /> Organization(UHERO) rn 0 W 0 N m rn m 0 N a 0 i m <br /> W W W m m m m m m 0 0 0 0 0 0 <br /> M m m m m m m m m 0 0 0 0 0 0 <br /> rs Some data are available for other counties and for other <br /> Source: National Association of Realtors,2011 <br /> and types are not fully comparable. No reliable data are <br /> available for the State as a whole for such a long series. <br /> Hawaii Housing Planning Study,2011 Page 20 <br /> 0 SMS, Inc. November,2011 <br />