Kapolei Real Estate Forecast: Housing Market Prediction in 2023

Kapolei Real Estate Forecast: Housing Market Prediction in 2023


Whether you’re knee-deep in exploring homes for sale in Kapolei, HI or have just decided to put your property on the market, you know that the enclave is one of the most coveted on Oahu — if not Hawaii. Kapolei’s prime location, coupled with the Aloha State’s impeccable weather and astounding beauty, renders the region exceedingly desirable.

Despite its attractiveness, Kapolei may not be immune to the shifts in real estate we’re seeing across the nation. But how will it be affected, exactly? And what can you do to ensure you make the savviest buying and selling decisions?

Read on for Fran Magbual’s dive into the Kapolei housing market to get a better handle on what we may see in the year ahead.

Kapolei homes may continue to hold a high value

The Hawaii real estate scene broke records in 2021 and 2022. Bidding wars and homes selling above their listing price became the norm, and a “frenzied” atmosphere enveloped Hawaii and the continental U.S. While several factors have tempered this pace, Kapolei may sustain its stronghold in real estate.

In October 2022, the average price of a home in Oahu exceeded $1 million, representing a 5% increase from the preceding year. Through October, some 3,080 homes sold in Oahu, making it Hawaii’s most valuable real estate market. Hawaii also has a unique distinction: as a chain of islands, there is limited space for new residences. That exclusivity is an enormous part of its appeal — and why its home prices have been historically high. Further, as home prices drop around the country, Oahu homes may see only a slight dip. Experts like Hawaii economist Eugene Tian believe Hawaii is shielded from the significant decline in market rates that will be felt on the mainland.

Interest rates will impact Hawaii real estate

In a single year, the national interest rate has more than doubled, with present rates hovering around 7% for a fixed, 30-year mortgage, adding a substantial amount to a buyer’s monthly mortgage payment. Rising interest rates don’t just impact a mortgage, either. Auto loans, homeowner’s insurance, and credit cards are affected. And because Hawaii has the highest cost of living in the United States, rising interest rates render homeownership infeasible for some hopeful buyers.

Savvy homebuyers, however, will uplevel their home search to find a residence (or investment) before interest rates spike again — a likely scenario if inflation continues. Further, homeowners may be taking their homes off the market or electing not to sell, as they, too, will be subjected to higher rates if they choose to buy right away again. At the same time, there are home buyers, such as those who buy with cash, who aren’t affected by rising interest rates.

Does this sound insanely complicated? Indeed, it’s intricate, but the market isn’t unpredictable. Simply put, we probably won’t see homes in Kapolei (and throughout Hawaii) sell as rapidly as they did in the past two years. Nonetheless, while demand may decline, the relatively low inventory in Kapolei may result in a more stabilized market.

Rents in Kapolei may climb

Rents throughout Hawaii have continued to climb. Condo sales are down in Oahu, and the cost to rent a home has increased. For homeowners who have decided to forestall selling, the rental market represents an attractive opportunity. By leasing real estate in Kapolei, you can receive lucrative passive income as you monitor the economy and real estate trends. However, for first-time prospective buyers, this dynamic may delay their ability to save for a down payment. 

The silver lining? The Economic Research Organization at the University of Hawaii states that the job market in Hawaii will stay robust. Hawaii will remain a consistent market thanks partly to the fact that Japanese travel is gaining momentum.

Sellers may have to increase their efforts in 2023

All the factors listed above indicate that we are effectively shifting out of a seller’s market and moving in the buyer’s direction. This is terrific news for prospective buyers, who will have greater leverage in the coming year. They will enjoy greater power in negotiations, and homes may sell closer to the asking price, contrasting the bidding wars that came to define the past two years. As the pace of the real estate market levels out, however, sellers may have to step up. Sellers will need to “keep up with the Joneses” via professionally staged homes, superb marketing, and renovations comparable to similar properties on the market.

Hawaii’s unique position will continue to fuel luxury real estate sales

Hawaii’s indisputable reputation as one of the top vacation destinations in the world makes it a favorite for investors searching for a second home. Indeed, roughly a quarter of homes in Hawaii are sold to foreign and mainland investors (many of them affluent professionals and retirees searching for their own piece of paradise). As such, the luxury real estate market in Kapolei and beyond may remain steady or even see impressive growth.

#luckywelivehawaii isn’t just a trending hashtag: it’s a reality for those who live on the islands. Whether you're scouting out new single-family homes in Kapolei or planning to sell your piece of Kapolei real estate, Fran Magbual is the best realtor to bring along your journey. Enthusiastic, determined, and knowledgeable, she can guide you through the changes now and in the future — and will deliver world-class service while she’s at it. Contact Fran today as the next vital step in your Hawaii homeownership journey.

*Header photo courtesy of Shutterstock


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