Kaka’ako Is Hotter Than Ever
Last month, hundreds of residents moved into their brand-new digs in two of Kakaako’s latest, high-profile condominium projects: Keauhou Place and Anaha. This influx of residents — the majority of whom are owner-occupants — is a testament to the neighborhood’s soaring popularity.
Living in Honolulu’s hippest neighborhood, however, can come with a premium price tag. The median price for a condominium in Kakaako rose to $790,000 in 2017 — the equivalent of the peak single-family home median price on Oahu this year, and well above the island-wide condo median price of $410,000.
So, how did condos in Kakaako become so valuable, when 20 years ago the median price was about the same as the island-wide median? Let’s take a look:
Kakaako’s renaissance began in 2006, when the high-end Hokua and Koolani condominium projects were added to a neighborhood that had not seen any major residential construction since the late 1990s. Together, Hokua and Koolani added more than 600 luxury condos to an industrial Kakaako, kicking off the resurgence of this once-overlooked neighborhood.
That same year saw the peak of the last housing price cycle — when the median condo price in Kakaako topped $760,000.
The following year, in 2007, 909 Kapiolani and Moana Pacific were completed, adding nearly 1,000 homes to Kakaako, and pushing sales in Kakaako up to 288 units.
As the national real estate market began to nosedive in 2007, median prices in Kakaako took only a slight dip. While 2008 and 2009 saw a small decline in median prices, the price recovery was quick and prices did not drop much below 2005 levels.
Recent Sales in Kakaako
Since 2014, Kakaako added nine new condo projects, resulting in more than 3,250 homes, including some affordable and reserved housing units in 801 South, 400 Keawe, and Keauhou Place. This caused median prices to steadily increase.
Sales also increased steadily over the past five years, with 2017 sales (through October) reaching a record high of over 450 units. The bulk of sales in the past year occurred in the $500,000 to $1 million-dollar range. Condos priced below $1 million also had fewer Days on Market than those priced above $1 million — an indicator of strong demand in the more affordable price points.
Who’s Buying in Kakaako?
To the surprise of some, more than two-thirds of owners of new construction in Kakaako (projects built in 2014 or after) are owner-occupants. Investors make up less than a third of all buyers. Just under 25 percent of investor-owners in a new Kakaako condo are Hawaii residents, and less than 10 percent of investor-owners are from the Mainland or abroad.
Thinking of Making Kakaako Home?
While living in Kakaako can come with a heftier price tag, history has shown that resales of Kakaako condos command, on average, a greater return on investment than the average Oahu condo.
With so many new options in Kakaako — from reserved and affordable housing to ultra-luxury — it’s best to seek the advice of a REALTOR®. For more information, visit locationshawaii.com/kakaako.