The median price of Honolulu real estate is expected to drop to $7,400 in the first quarter of next year, down from the $8,400 average of 2016, according to a new study released Thursday.
The median home price in the city of about 7 million people is $3,000 lower than the national median.
The study from the Real Estate Institute of Hawaii was based on information from the city’s real estate website and real estate agents.
Honolulu had the second-lowest median price for all metropolitan areas studied, with $2,300.
It ranked 12th in median price per square foot, behind Washington, D.C. The national average for this measure is $6,400.
The study was conducted by a consortium of real estate firms led by KKG Real Estate and the Kauai Real Estate Council.
“It’s a sad day when Honolulu realty prices are down, but there are still opportunities for the region to grow and to make Honolulu more affordable,” said KKg Real Estate CEO Tom Gorman in a statement.
“The decline in the median price over the last year should not come as a surprise, and it has a lot to do with the challenges the region is facing.”
The study was the first of its kind and is based on a combination of research by the Hawaii Real Estate Board and the National Association of Realtors.
The real estate market has been experiencing rapid growth over the past several years.
In the first nine months of 2016 there were 6.6 million homes sold in the state, which was up from the 4.3 million sold in 2015.
Hawaii had the fourth-highest number of home sales in the country in 2015, according the Realtor.
The average price of a home sold in Hawaii was $2.27 million.
The median price in Honolulu has fallen 17.2 percent from the previous year to $831,000, the study found.
The city is still one of the top real estate markets in the nation, according a survey from Zillow, which has a market analysis app that ranks the best neighborhoods for homes and rentals.
The survey has Honolulu ranking third among metropolitan areas in sales growth, behind San Francisco and Los Angeles.