Q1 - 2026 Market Data
The Hawaii multifamily market (5+ units) closed Q1 2026 with 11 properties traded, matching Q4 2025 transaction count but reflecting a 9.49% decline in total sales volume, from $32.34M to $29.27M. Despite the pullback in volume, pricing metrics showed modest resilience, the median price per unit edged up 1.25% quarter over quarter from $246K to $249K, while the median cap rate expanded 59 basis points from 4.83% to 5.42%, indicating that buyers continued to demand higher yields to offset elevated financing costs and broader market uncertainty.
The 59 basis point cap rate expansion is the defining metric of the quarter. As yields move higher and pricing holds relatively steady, the market is signaling a gradual reset, one where sellers who transacted were willing to meet buyer return requirements rather than hold out for lofty expectations. With 126 total units trading across 11 properties at $29.27M in total volume, Q1 activity points to a market that remains selectively active, with capital deploying thoughtfully into assets that pencil at current debt levels.
Metric | Q4 2025 | Q1 2026 | Change (QoQ) | Properties Traded | 11 | 11 | - | Total Sales Volume | $32.34M | $29.27M | â–¼ 9.49% | Median $ / Unit | $246,000 | $249,083 | â–² 1.25% | Median Cap Rate | 4.83% | 5.42% | â–² 59 BPS |
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Inventory Snapshot
As of the time of this report, the active Hawaii multifamily market (5+ units) consists of 73 properties totaling 914 units and $268.7M in total opportunities. The median price per unit stands at $292K, with a median cap rate of 4.48% and a median price per square foot of $603. Nine deals are currently pending, representing $22.66M in total pending volume, which is in line with the current market velocity.
At 233 average days on market, the bid-ask gap remains wide. Q1 2026 closed transactions carried a median price per unit of $249K and a median cap rate of 5.42%, compared to active inventory currently asking $292K per unit at a 4.48% cap rate. The $43K per unit spread and 94 basis point gap confirms the market continues to clear well below asking. Sellers serious about transacting are pricing to where buyers are underwriting, not where the market was.
To receive our Hawaii Multifamily Inventory Sheet, which compiles all active listings and off-market opportunities into one comprehensive document, contact us directly to be added to the distribution list.
Owner’s Corner: Cap Rate Expansion Explained
What a 59 Basis Point Move Means for Your Property's Value
The Hawaii multifamily market saw the median cap rate expand 59 basis points quarter over quarter, from 4.83% in Q4 2025 to 5.42% in Q1 2026. For many owners, basis points are an abstraction. The valuation impact is not.
- Cap rates and value move in opposite directions. When cap rates expand, property values compress, even if your net operating income stays exactly the same.
- The math is significant. On a property generating $150,000 in annual NOI, the difference between a 4.83% and a 5.42% cap rate represents a valuation decline of approximately $320,000, with no change to the property's income whatsoever.
- Expansion is driven by financing costs. As interest rates remain elevated, buyers require higher yields to make deals pencil. Cap rate expansion reflects the cost of capital, not your property's quality.
The 59 basis point move in Q1 is a signal worth taking seriously. Knowing where your asset is valued today is the starting point for every sound ownership decision.
For more tips on how to maximize your property's value, visit our blog at hawaiimultifamilyadvisor.com/blog.
Done Deal!
Excited to announce the successful closing of a 7-unit multifamily building at 276 Olive Ave. Wahiawa, HI. 9686. Read about how we helped our clients navigate their first multifamily investment.
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