Buying and Selling houses has been the "hot" marketplace on the island of O'ahu since early 1999. (http://www.hicentral.com/hbr-stat.asp) There seem to be several forces at work here; consistently lower interest rates, large influx of military personnel, rental rates doubling and tripling in this timespan, rising heating fuel prices coupled with severe weather patterns on the mainland increasing demand in Hawaii's perfect climate. Aside from the obvious there are some other very interesting market forces at work in Honolulu. One is the influx of buyers from California who find Honolulu's prices a "bargain" in certain niche markets, particularly the waterfront. In Newport, Santa Monica, Venice Beach and San Diego the least desirable parcel is still more expensive than a very attractive Hawaii Kai, Kailua or North Shore property. Another is the number of sellers in Honolulu who bought before the 1980s for prices as low as $18,000 in some areas currently selling in the millions. A third is the number of people who "accidently" bought in the mid 1990s, the tail end of an 8 year decline in values who ran head on into the "dot com" money of 1999. The "dot com," or, typically, young stock market investors seeking to shelter some of their sudden amazing wealth started competing with each other for Honolulu's depressed "high-end," now bargain, properties. Persons buying in the mid 1990s found they could make huge gains on their recent investments by "flipping" the properties. This practice continues until today with people buying in 2003 making in excess of $150,000 in most cases, on their recent investments.(http://www.hicentral.com/hbr-stat.asp) It will be interesting to see what happens with 2004 as 2005 already looks like more of the same on the island of O'ahu.