We recently conducted a study on Oahu's offshore real estate investors, and how this segment of the market is evolving over time. The definition of an "offshore buyer" simply means a buyer of real estate on Oahu who originates anywhere but Hawaii. Looking at 2005 versus 2012, we see a reduction in the total amount of offshore buyers by about half. 2012 was a much more localized market than 2005.
The other really interesting shift we saw was a large increase in the number of Japanese and other foreign buyers, including Canadians, Australians and Koreans. We know that favorable exchange rates in those areas, as well as economic conditions, have contributed to the shift to buyers from those areas. Conversly, we saw a large decrease in the numbers of buyers from California.
We are often asked about current interest from the new market of Chinese buyers. We're definitely seeing a lot of money and interest from the Chinese market, but that has not yet translated into closed sales.
The bottom line: The world loves Hawaii. Hawaii real estate is in constant demand by U.S. and international buyers, but global events, political factors and especially economic factors influence offshore buyer activity in Hawaii. Looking at Oahu sales in 2012 (post-economic recession; mortgage debacle) vs. 2005 (pre-economic recession; unrestricted mortgage activity) we see that the U.S. Mainland buyer is still largely inhibited by the effects of the mortgage crisis and economic recession in 2008.
As economic conditions shift, so too do the buyers. In terms of raw numbers, the amount of influence an offshore buyer has on our market is relatively small and it has been decreasing. Thus, a lot of market stability exists, particularly on Oahu, because the majority of our market are local buyers.