A Honolulu Magazine story on a predicted boom in Hawaii home prices left me gasping for breath (“Honolulu Real Estate Trends: What’s Next?” by Frances Nuar).

The article builds on reporting by Treena Shapiro, who now writes a real estate blog for the magazine.

Earlier this month Shapiro reported on data from the University of Hawaii’s Economic Research Organization (UHERO).

The post looks at median home prices from May–$630,000 for a single-family home and $315,000 for a condo—and applies a set of simple assumptions: 20 percent for a down payment and an income that would allow no more than 30 percent to go toward housing. It also assumes a mortgage rate of 4 percent.
UHERO calculations find that at the current interest rate, a single-family home buyer needs a $126,000 down payment and an income just over $96,000. That would make monthly payments about $2,400.

For a condo, you’d need to earn $48,000 a year, put $63,000 down, and pay a $1,200 monthly mortgage.

Setting the median household income around $80,000, it concludes: “even in today’s environment of relatively low interest rates, the median family income would not be able to afford the median-priced home. Only at rates well below 3 percent does the median home become affordable to the median household.”

The post further points out that interest rates and median home prices are likely to rise soon, pushing homes further out of the median income earner’s reach.

And it’s going to get worse, or better, depending on your position in the housing food chain, according to the magazine.

Economist Paul Brewbaker tells us, “People are going to have to wrap their heads around the idea of a median single-family home price on Oahu of $1 million before the 20-teens are over. It’s conceivable home prices could double … within the 20-teens.”

How you feel about that depends on where you sit in the real estate food chain, and where you want to be in the near future. Own a paid-off home? Lucky you—though you may find your houseless children or grandchildren moving back in with you. Are you in the market now, either buying, selling or trying to trade up? Stick with us, we have some advice for you in just a few paragraphs.

According to the Honolulu Magazine story, home prices here have been relatively stable through the great recession.

But that’s certainly not the case here in Kaaawa, where appraised values dropped by a third between 2007 and 2013, good news for those looking to buy a home.

But the fact remains–How in the world will local families be able to enter a housing market when the median home hits $1 million?

A reader who called the Honolulu Magazine story to my attention criticized it for limited sourcing, pointing out that “every single person interviewed in this article, with the exception of Brewbaker, is a representative of the real estate industry. There were no other voices.”

As a result, the advice for home seekers is pretty narrowly focused–be prepared to pay a premium to get much less than you want.

As the realtors we interviewed related, be prepared to meet or exceed asking price. Be prepared to jostle for the attention of the sellers if there are multiple offers. Don’t be surprised if your realtor suggests writing a letter to the seller, essentially selling yourself to be their buyer. According to online industry trade journal rismedia.com, this is a thing now.

Try desperately hard not to fall in love with a place. This is a business deal, especially if you’re trying to ride this price rocket for a few years and hop off.

Expect to look at many, many old homes or condos that barely seem worth the rapidly rising asking price, then be prepared to move aggressively on one you think will work for you. “Buyers will need to move quickly and confidently in order to get the property they have targeted,” says Sato.

And also be prepared for rising homelessness, increased income and housing disparities, and the related social problems these produce.

All quite sobering, to be sure.