Soldier to Soldier Hawaii

A guide to understanding real estate market cycles


A Guide to Understanding the Real Estate Cycle in Hawaii


The real estate market operates in cycles, experiencing periods of growth, stability, decline, and recovery. Understanding these cycles is crucial for buyers, sellers, investors, and anyone interested in the Hawaii real estate market. In this blog post, we will provide a comprehensive guide to understanding the real estate cycle in Hawaii, exploring the key phases and factors that influence market conditions.

  1. Expansion Phase:

During the expansion phase, the real estate market experiences growth and increasing demand. In Hawaii, factors such as population growth, low unemployment rates, and strong tourism can contribute to this phase. Property prices tend to rise, and developers increase construction to meet the demand for new housing.

  1. Peak Phase:

The peak phase represents the top of the market cycle. Property prices reach their highest point, and demand may begin to slow down. Investors should exercise caution during this phase as the market could be approaching a turning point.

  1. Contraction Phase:

The contraction phase, also known as the downturn or correction, follows the peak phase. In this phase, property prices start to decline or stabilize, and demand decreases. Factors such as economic downturns, rising interest rates, or oversupply of inventory can contribute to this phase. Buyers may find opportunities to purchase properties at lower prices, while sellers may face challenges in finding buyers.

  1. Trough Phase:

The trough phase represents the bottom of the market cycle, where prices stabilize or start to show signs of recovery. This phase can present opportunities for buyers and long-term investors who are looking for undervalued properties. During this phase, the market begins to transition towards the expansion phase.

Factors Influencing the Real Estate Cycle in Hawaii:

Several factors influence the real estate cycle in Hawaii. These include:

a. Economic Conditions: Hawaii’s economy, which heavily relies on tourism and other industries, plays a significant role in the real estate cycle. Factors like employment rates, income levels, and economic growth impact demand and property values.

b. Interest Rates: Fluctuations in interest rates can affect affordability and demand for real estate. Lower interest rates tend to stimulate the market by making borrowing more affordable, while higher rates may slow down activity.

c. Supply and Demand: The balance between supply and demand greatly influences the real estate cycle. Changes in population, tourism, and development activity can impact the supply of available properties. A high demand relative to supply leads to price increases, while an oversupply can result in a decline.

d. Government Policies and Regulations: Government policies related to taxes, zoning, land use, and development regulations can impact the real estate market. Changes in regulations or incentives can influence market dynamics and investment decisions.

Navigating the Real Estate Cycle:

To navigate the real estate cycle effectively in Hawaii, consider the following tips:

  1. Research and Stay Informed: Keep track of market trends, economic indicators, and local news to understand the current market conditions and make informed decisions.
  2. Long-Term Investment Perspective: Real estate is a long-term investment. Avoid making impulsive decisions based solely on short-term market fluctuations.
  3. Work with Professionals: Collaborate with experienced real estate agents, brokers, and financial advisors who have in-depth knowledge of the local market and can guide you through the cycle.
  4. Diversify Your Portfolio: Consider diversifying your real estate investments across different property types and locations to mitigate risk.


Understanding the real estate cycle in Hawaii is essential for buyers, sellers, and investors. By recognizing the different phases and the factors influencing the market, individuals can make informed decisions, seize opportunities, and navigate the cycles more effectively. Stay informed, work with professionals, and adopt a long-term perspective to maximize your success in the dynamic Hawaii real estate market.

Celester Thomas

Company Blog – Soldier to Soldier Hawaii Realty

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