According to a study just released, Honolulu real estate is "overvalued" by 14%, which earns us the #13 position on the Most Overvalued list.
The report noted that of the 52 markets considered "extremely overvalued" five years ago, only three — including Honolulu — have seen price declines of less than 10 percent through the end of last year.
So what to make of this? The report, by IHS Global Insight and PNC Financial Services Group, seems to hint that prices "should" tumble--that they SHOULD have tumbled quite a bit more than they have. But price declines here have been modest, particularly compared with California, Nevada and Florida. Our fourth quarter median sale price was holding at $587,800.
There are some similarities in the markets in Honolulu, San Francisco and Manhattan. The areas are tiny, desirability is huge, and while prices may have softened slightly they've been remarkably stable in a tumultuous economy.
Overvalued or highly prized? I think the latter.