There is always one question on my clients’ minds; what’s next for the Honolulu, Hawaii real estate market?  I always begin my answer with, “I don’t have a crystal ball.  No one does.”  Nevertheless, here are some inter-related thoughts.  Consider them and you decide what’s in store for the Honolulu real estate market.

Swine Flu.  In May and June, Japanese travel to Hawaii plummeted due to Swine Flu concerns.  The Hawaii Tourism Authority expects arrivals from Japan to recover beginning this month.  However, in August, the World Health Organization predicted an explosion of Swine Flu cases in the coming northern hemisphere winter flu season.  The outcome of these events will certainly affect the Hawaiian economy, but by how much?

Tourism.  The Pacific Business News reported Hawaii visitor arrivals rose in July, the first increase since February 2008.  The question is, will this continue and what caused the July increase?  Is this a trend reversal or a blip caused by severe hotel room rate cuts?

If the Swine Flu comes back in a big way or if it mutates and makes millions of doses of just-produced vaccine useless, I would not be surprised if Hawaii tourism falls even further.  That isn’t good news for the Hawaiian economy.

The Hawaiian economy.  The same Pacific Business News visitor arrivals article reported that average daily tourist spending fell dramatically, reflecting lower prices being charged by hotels and attractions.  The state Department of Business, Economic Development and Tourism predicts the local economy will stabilize in 2010, followed by modest growth in 2011.  That recovery depends on the Swine Flu’s severity and tourism’s rebound.  Consequently, the real estate recovery will likely follow an economic turnaround.

Contributed by Michael Zimmerman
Direct:  808-457-9683
Michael@Michael-Zimmerman.com
www.Michael-Zimmerman.com
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