A decade ago the real estate bubble burst, and home prices nationwide began to tumble from record highs as the Great Recession shook the nation.

Today home prices in Hawaii are back at record highs, but in a much different economic climate — bolstered by booming tourism to the islands, construction, rock-bottom interest rates and low unemployment.

What can we expect in 2018 for Hawaii’s housing market? Here are six real estate trend sand issues to watch for this year:

Taxes

Some tax benefits that homeowners have long enjoyed have been cut or reduced. And under the tax-code overhaul, states with high taxes and housing prices like Hawaii will be affected the most.

For example, new homeowners can deduct interest on only $750,000 of mortgage debt, down from the previous limit of $1 million. That shouldn’t affect most of the nation, as only 4 percent of purchase mortgages in 2017 were for more than $750,000, according to research firm Attom Data Solutions. But in high-priced Hawaii, where the median price for a single-family home on Oahu is about $750,000 (for a modest house), it will be a consideration for some homebuyers.

Under the new tax law, taxpayers who itemize are being capped at $10,000 for deductions on state, local and property taxes. Previously, there was no limit.

Also, the interest on your home equity loan is now not deductible. So if you’re carrying a balance from your kitchen remodel from a few years ago or have been regularly tapping into your home’s equity to pay for your children’s private school tuition, you might consider repaying the loans. Home equity lines are popular in Hawaii for many house-rich, cash-poor homeowners who have built up lots of equity in their residences. Remember to consult with your tax professional on how the new tax laws will affect you.

Employment

Hawaii’s unemployment rate is the lowest in the country at 2 percent, proving a steady boost to the housing market. The tight labor market could help give a much-needed boost to wages and salaries, but as long as Hawaii remains a service-based economy and the shortage of affordable housing persists, home buying will continue to be a challenge for many.

Micro-units

Micro-units are becoming popular in urban hubs around the globe as an innovative, efficient, affordable housing option. Micro-units (aka micro-housing, single-occupancy units, apodments) are essentially tiny studio apartments as small as 200 to 300 square feet.

It would make sense in Hawaii where land is scarce and housing prices are sky-high. But is Hawaii ready?

Howard Hughes recently began sales of a new Kakaako condo tower called ‘A‘ali‘i to be built in Ward Village. The studio units range from 277 to 373 square feet and can be purchased nicely furnished.

It will be interesting to see how sales go at ‘A‘ali‘i and whether other developers follow suit.

‘Monster homes’

So-called “monster homes” in residential neighborhoods have grabbed headlines and caught the attention of the mayor and other city leaders, who will do their best to ban them in 2018 or make it very difficult to have more constructed on Oahu.

These big-box homes do affect the neighborhood and are glaring symbols of the lack of affordable housing options here, especially in town. I just hope city leaders are as aggressive, creative and passionate about providing affordable-housing solutions as they are about shutting these monsters down.

Mortgage rates

Long-term mortgage rates are expected to rise well above 4 percent in 2018. The National Association of Realtors forecast rates gradually will climb to 4.5 percent at the end of the year.

Some relief to local homebuyers is that the Federal Housing Finance Agency increased conforming high loan limits in Honolulu to $721,050 this year. “Conforming” loans are those that meet Freddie Mac and Fannie Mae guidelines.

Prices

Single-family home prices on Oahu finished 2017 at a median $755,000 in 2017, up 2.7 percent from the previous year, according to the Honolulu Board of Realtors.

Could 2018 be the year Honolulu hits $800,000? Economists predict it will get close.

The University of Hawaii Economic Research Organization forecast single-family home prices will finish 2018 around $790,000.

Jaymes Song is a top-producing agent with Better Homes and Gardens Real Estate Advantage Realty in Kahala. He can be reached at 228-3332 or JaymesS@BetterHawaii.com.