Honolulu real estate market 14% overvalued, study says
Despite two years of declining home prices Honolulu's residential real estate market was still considered 14 percent overvalued at the end of 2009, according to a study released yesterday.
Honolulu, with a median home price of $587,800 in the fourth quarter, was ranked the 13th most overvalued housing market in the country, according to the report from IHS Global Insight and PNC Financial Services Group. Atlantic City, N.J., with a median home price of $228,100, topped the list with an overvaluation of 33 percent.
The report also noted that of the 52 markets that were considered to be "extremely overvalued" in the fourth quarter of 2005, only three — including Honolulu — have seen price declines of less than 10 percent through the end of last year. The other two were Bellingham, Wash., and Ocean City, N.J.
Cities on that list that crashed the hardest were mainly in California and Florida, the report said. Los Angeles, which was considered 56 percent overvalued in the fourth quarter of 2005, saw its median home price fall by 30 percent through the end of 2009. Miami, which was 49 percent overvalued, according to the study, experienced a 36 percent drop in its median price during the same period.
Recent data on O'ahu's housing market has shown signs of recovery, with the median sale price for single-family homes sold rising in February for a second straight month compared with the same months last year.
The median price for previously owned single-family homes rose 3.6 percent to $570,000 in February from $550,000 a year earlier. The increase followed a 10.8 percent rise in January. For the two months combined, the median price is up 7.3 percent.