Hawaii’s multi-family real estate market tallied $483.4M in 2014 sales

Hawaii’s multi-family real estate market finished up 2014 with nearly $500 million in total sales, mainly due in large part to several institutional sales including Waena Apartments, Kalaeloa Rental Homes and Hibiscus Hill, which accounted for more than half of the total sales volume for the year, according to a new report.

There were a total of 73 transactions with 1,777 units sold, while average days on the market for the year saw a decrease to 74 days, the Apartment Advisors quarterly market report said.

Inventory levels have remained stable throughout the year with an estimated 35-45 active listings on average.

Overall, prices for multi-family properties have seen a dramatic increase during the last few years with average pricing per unit ending the year just above $221,000, marking the fifth straight year of annual growth in price per unit and the first year with double-digit growth since 2010, the report said.

Additionally, the apartment sales volume in 2014 saw an overall increase in every quarter compared to a year ago. During the fourth quarter of 2014, more than 75 percent of all transactions had sale prices above $1.5 million, compared to a year ago when only 53 percent of transactions had sale prices above that same amount.

The overall market continues to be driven on a local level by non-institutional investors who have demonstrated confidence in the market despite escalating prices, Jared Ikeda, president and principal broker of Apartment Advisors said, noting that in essence, favorable financing terms and low interest rates continue to play a key role in the ongoing demand for apartment assets along with signs of a strengthening rental market as landlords begin to push asking rents up.

“The apartment market has entered into a new era of pricing expectation,” he said in a statement. “The aggressive growth has been partly attributed to a new demographic of investors entering into the market and driving up prices.”