There are very few places in the world where real estate basically sells itself, and Hawaii is one of them. One of the beautiful places on the planet, there are countless reasons for purchasing real estate on any of the Hawaiian Islands. Whether as a vacation property or full-time residence, Hawaii is popular for a reason. Beautiful beaches, great weather, and a laid back lifestyle are just a portion of what so many people come back for year after year.
Not surprisingly, the Hawaiian real estate market is highly competitive and can move quite quickly. The islands are not all that large in size, so properties are always at a premium. Very little land exists for the purpose of new development, so most sales involve existing homes. Buyer are often surprised to find how little their dollar buys when they head to the islands in search of a property to purchase.
There are around 1.4 million people living in Hawaii, with the majority being found on the islands of Oahu and Molokai. Perhaps owing to the laidback lifestyle of the residents, Hawaii has the longest life expectancy of any state in the union at 79.8 years. There is tremendous diversity to be found in Hawaii, with Asians, Whites, Native Hawaiians, and other Pacific Islanders all being well-represented.
The economy of Hawaii is based on both exports and tourism. Some of the most popular exported goods from the islands include coffee, livestock, sugarcane, macadamia nuts, pineapples, and more. Due to its remote location and high demand, the cost of living in Hawaii is one of the highest in the country. While it still falls short of big cities like New York and San Francisco, living on the islands is still rather expensive when compared to most other U.S. locales.
As of August 2013, the overall median home listing price in the state of Hawaii is $495,000. That number is up over 12% as compared to August of 2012, so the market is certainly strong at this point in time. However, looking at real estate for all of the islands as a whole can be deceiving because each has its own market and economy. Breaking down the real estate market a little further will help to get a better idea of what the current state of the real estate market truly looks like.
The second-largest Hawaiian island is Maui, and it features a competitive and expensive real estate market. Currently, the market in Maui is experiencing a strong surge, and prices are up significantly over the same time last year. The present median listing price of a home on Maui is $649,000, up over 25% in the last year alone. As a general rule, the more expensive listings are found on the southeastern portion of the island, with more affordable housing in the areas to the northwest. However, there are only two zip codes on Maui with average listings under $450,000, so properties on this island are expensive in any location.
Moving to the west, Oahu is the third-largest of the Hawaiian Islands, but the most populous. This island is home to the largest city in Hawaii, Honolulu, which has more than 30% of the entire Hawaiian population living within its limits. As would be expected, the real estate market of Hawaii is most active and competitive on Oahu, with more buyers in the market on this island than any other.
Because of the greater inventory of properties, home prices on Oahu are slightly more affordable than they are on Maui. The current median listing price is $524,700, which is up approximately 10% from the same period last year. There is a fairly even split between single family homes and condo units on Oahu, with 45% of the islands residents living in a single family property.
Sixth-largest of the eight Hawaiian Islands, Lanai is the smallest island that is accessible to the public. There are only around 3,000 people that live on the island of Lanai. As such, real estate is not nearly as competitive as it can be on the other, larger islands. The median list price of a home on Lanai is $360,000, significantly lower than the islands of Oahu and Maui. This has much to do with the lack of infrastructure that still exists on the island. There are no shopping malls, little public transportation, and not even a stop light to be found. For some, the remote feeling of Lanai is attractive, but the lack of development has kept housing prices down.
Molokai is the fifth-largest island in the chain, but much of the island is uninhabitable due to the two large volcanoes that make up its geography. Similar to Lanai, Molokai has a very limited population of just 7,400 residents. Due to that, the real estate market is tamer and less expensive. The median listing price is the least of any of the four islands listed here, at just $249,000. The growth in value on Molokai has been less aggressive than other islands, but prices are still up more than 4% over the same time period in 2012. More than 60% of the population of Molokai lives in single family homes.
The real estate market in the state of Hawaii varies wildly depending on location. The more populous islands such as Oahu and Maui are very expensive places to live, while smaller islands are much more affordable but don’t offer as much in the way of infrastructure or employment opportunities. Buyers on the bigger islands would be wise to watch the market carefully and act fast as reasonably priced properties don’t stay around for long. With the present upswing in the Hawaiian real estate market, it seems that living in this paradise is only going to get more expensive in the coming months and years.
Bell Real Estate - Broker
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