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Honolulu property taxes are levied upon unrealized capital gains, a highly controversial practice. If an owner sells his property for less than its assessed value, should he not be entitled to claim a capital loss for all years in which that assessment was greater than the selling price?
>> The Honolulu Board of Realtors (HBR) reported that Oahu single-family home sales plunged to 3,474 in 2022 from 4,526 in 2021. Yes some sale prices increased, as would be expected by a reduction in supply. Conversely, if every single family home on Oahu were to be listed for sale, average prices would certainly fall, as supply exceeds demand.
>> Mortgage rates doubled from 2021 to 2022. This puts downward pressure on home prices.
Grouping smaller communities such as Kahuku, Malaekahana and Laie into a larger geographical area distorts valuations. Of fewer than 2,000 single-family homes in those towns, only 17 were sold in 2022, according to the HBR. Statistically, 323 sales would be required to determine an average price percentage increase with a 95% confidence level.
Estimating property values based on flawed methodologies yields imprecise results. “That’s the way it’s always been done” is not an acceptable option.
Barney Wilson
Laie
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