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Oahu Real Estate History
The Ups and Downs of Hawaii Real Estate Values
The history of Oahu real estate is an interesting one. Especially when one realizes that land in Oahu has had up and down cycles, just as one the mainland. Most people outside Hawaii have the impression that land & real estate here is always going up, up, up. Not necessarily, though it does go up more than down. For this article we’ll be concentrating on the recent years of the late 20th century on up to today.
Starting in the late 1980’s, Hawaii – and especially Oahu – saw an invasion of Japanese investment never seen before, or since. For those who weren’t there, a little explanation is needed. At the time Japan was at the height of their boom. Their unique ability to pull themselves very far, very fast had made their economy grown at an astounding rate after WW II.
So much money was being made that their many millionaires began looking for good investment. Those looking for opportunities outside Japan turned to the other economic leader – the US. Understandably they were especially attracted to the glamour, value and geographic closeness of Hawaii. Oahu, being the most developed Island, as well as the richest, got the most attention. And nothing is more valuable in Hawaii then real estate. Land is king in the Islands. When there’s such a limited supply in such a beautiful place, it takes on importance it wouldn’t have elsewhere.
The Japanese investment run quickly built momentum. One could almost compare it to the California Gold Rush. One notorious billionaire would tour Oahu neighborhoods in his limousine, sending his underlings running to the doors of properties that caught his eye. Residents who answered were startled to be offered a substantial amount of money to sell their homes, almost on the spot. Keep in mind that these homes were not on the market. At least not until that limousine came rolling through.
With all of this fevered buying going on, Oahu house and condo prices shot upward. This also produced a building boom as developers began tearing down whatever was on the land they bought to put up large condominiums, hotels and other income producing properties. One significant building the Japanese put up was the Waikiki Landmark, a mix of shops, offices and condos. It was especially significant because it would soon become a soaring symbol of this era of Japanese investment.
Hawaii, and especially Oahu, became more and more linked to Japan’s economy due to all the money coming in from there. That wasn’t an inherently bad thing. At least not until they entered a recession that would last for years. Starting in the mid/late 1990’s, things began to fall apart. Companies and investors who were recently so flush, suddenly had no money. The wells ran dry. They put so much money into Oahu properties and development, that they were extremely overextended and many declared bankruptcy.
This resulted in something Oahu had never experienced before.
Continued on next page >
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