HONOLULU, Hawaii (HawaiiNewsNow) - The pandemic is slowing down another important sector of Hawaii’s economy: Real estate.
And at least one expert is predicting a steep drop in home prices.
“I think sales (volume) easily will be down by half. I think prices will go down 15 to 25%,” said Hawaii real estate consultant Ricky Cassiday.
He said studios in Waikiki have already seen significant declines due to the tourism shutdown and tougher new regulations and enforcement on illegal vacation rentals.
Hawaii’s 22% unemployment rate will mean fewer buyers, Cassiday said.
He added that the real estate market will also be hurt by the exodus of thousands of Hawaii residents expected to relocate to the mainland to look for work.
“We see our major industry going to hell in a hand basket. We see our major industry falling off the cliff,” he said.
But not all experts share this view.
“Hawaii is one of the nine states where we’re actually forecasting prices will be up, not by much but by 1 percentage point,” said Frank Nothaft, chief economist at CoreLogic, a major real estate data company.
Nothaft thinks record-low mortgage rates will buoy the weak market, making homes more affordable for first-time buyers.
He also thinks foreign investment could rebound, boosting the high-end market.
But the market will still be sluggish due to the large number of job losses.
“Hawaii will eventually recover. It will be a little bit slower that what we’re seeing in other states,” Nothaft said.