Hauʻoli Makahiki Hou
Advocating for Our Property Owner Rights
We started this year with a great deal of uncertainty: the Omicron variant on the rise, travel barriers increasing instead of decreasing and a general sense of exhaustion from almost two years of dealing with our lives turned upside down. However, we continued to strive and improve our services and commitment to our Clients, Staff and community. We expanded to a new office location and hired additional Staff. We saw a surge in real estate sales and our property management business also exceeded past year’s performance. We continued our advocacy for property owner rights. This will endure to be our aim as we embark on a new year.
Economic Growth Anticipated in 2023
As high inflation and rising interest rates challenge our market conditions and as the Federal Reserve continues its aggressive strategy to raise rates to suppress inflation, our economic outlook becomes less certain. If inflation persists, the Federal Reserve will need to continue to push interest rates higher through 2023. Interest rates effect our housing market and have the potential to push us into a recession in 2023; however, according to the 4th quarter University of Hawaii Economic Research Organization forecast report, economic growth is anticipated for Hawaii by the end of 2023.
On the residential market, affordability and inflation are significantly impacting housing supply as builders are unable to produce housing that is affordable given the rising cost of materials. With strong demand for Hawaii housing and with constrained supply, housing values are unlikely to plummet. However, home sales have declined in 2022. Regardless, we continue to experience a surge in sales particularly with investors looking to hedge inflation.
Short Term Market Prospective
Our visitor industry has lagged in its recovery with visitor numbers still below the pre-pandemic level and we have yet to experience a return of our Japanese visitors. However, Japanese visitors are expected to return to pre-pandemic numbers later in 2023 and our mainland and European visitors have been more resilient improving our 2022 short term market from 2021 performance.
Long Term Market Prospective
Hawaii does anticipate a slow down in job growth and steady unemployment in 2023 but not sufficient enough to put Hawaii into an economic recession. In part, due to planned Federal spending, particularly in the construction industry and our defense sector, employment is expected to be steady and support a need for long long term rental housing.
Additionally, since the pandemic, our Staff has worked with our tenants in need to obtain rental aid which has helped immensely to keep our local residents housed while sustaining cash flow for our long term owners.