When you buy a new home, you're making an investment, so it's important to buy in an area your home value can continue to appreciate. To do that, you've got to look into specific geographic areas. Take a look at past home value and home sale trends as well as an area's economy, employment and job growth and the attraction level it has to new residents, and you can more reliably predict where your home value will go over the next few years.
The islands of Hawaii (capital city of Honolulu) have never had a problem attracting visitors and new residents. Though its islands are relatively small, Hawaii boasted a population of 1,211,537 in 2006. Its chief agricultural products include sugarcane, pineapple, nursery stock, livestock and macadamia nuts. Not surprisingly, Hawaii's biggest industrial sector is tourism, and others include food processing, apparel, fabricated metal products and stone, clay and glass products. With such varied trades for employment and such a huge tourism sector, it's not really surprising that most of the state's islands still have rising home value appreciation in a slower market.
As far as tourism goes, Hawaii is one of the bigger vacation attractions of the United States. With surf, sand, sun and adventure on every island, you can have a great time on even the smallest of them. Hawaii has 11 different climate zones, meaning the environment runs from lush forest to dry deserts, from black sand beaches to snow covered mountaintops. The Big Island (Hawaii) is full of ancient Hawaiian temples, European missionaries and is a great place to learn about the history and culture of the state. Maui has a combination of great nightlife, shopping and dining and natural adventures including hiking, water sports, wildlife watching and terrain exploring.
The island of Kauai is home of the “Grand Canyon of the Pacific” and the only navigable river in Hawaii. The more rural island of Molokai is considered the most “Hawaiian” island and is ideal for the true outdoorsman. The island of Oahu, one of the most popular in the state, had an amazing downtown area, great surfing and holds the Pearl Harbor Memorial. If you're looking for a more tropical and laid back vacation, Hawaii is the spot to be. With so many attractions and different places to visit, it's no wonder visitors make the decision to become permanent residents, assuring the stability of home value and the real estate market.
Hawaii has a high median household income compared to the rest of the nation at about $58,112 in 2005 (which actually was a slight decline from 2004) and a very low unemployment rate of 2.5% in May 2007. Professional and business services and leisure and hospitality has seen job growth, while government and trade, transport and utility jobs have declined. With an average home value of about $550,000, Hawaii is one of the more expensive places to buy a home in the United States. Their strong labor market, rising incomes and quickly rising home value equals a stable market for most. However, while their median income is high, home value prices are much higher, making homes less affordable then in other “poorer” states.
For now, most agents are noticing homes are spending a bit less time on the market in the 2nd quarter of 2007. One of the most expensive islands, Oahu, has a median home value of $665,000 which is down a couple thousand from the median in May of 2006. According to the Realtor Association of Maui statistics, the average home value sale price on the island of Maui at the end of April 2007 was over one million dollars! The smaller islands tend to be more affordable at this point, though the Big Island Hawaii saw a home value median of $430,000 at the end of 2006. Two of the smallest islands, Molokai and Lanai have the lowest median home value at $415,000 for Molokai (which is down from $505,000 in 2006) and 472,000 for Lanai, which is up from $410,000 in 2006.
With unemployment as low as it is, and home value prices high, it is unlikely for Hawaii's home value averages to continue skyrocketing. As of now, most areas of the state are leveling out and still appreciating slowly, while others, such as Molokai, have actually seen a decrease in home value appreciation. Over time, this will likely level off as well, and Hawaii will settle back into a stable, calm market with gradual rises in home value rates.
Ashley Lichty is a webmaster and the resident SEO of Web Xtreme, Inc. She has a background in real estate and marketing with an emphasis in writing.
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