Whether you are a first-time home buyer or a seasoned investor, Hawaii is a great place to get your feet wet in real estate. As a popular tourist destination with a continuously booming economy, the state has a lot to offer to both its residents and investors. That is why so many people want to invest in homes in Hawaii and live and work here.
However, we understand that it can be difficult to navigate the real estate market, especially when you are buying or investing in another place. That is why we are here to guide you through everything there is to know about the Hawaii housing market. From its overall outlook to the best places to invest in, this article will provide you with all the information you need to make an informed decision when it comes to acquiring a home in Aloha State.
Hawaii Real Estate Market: A General Outlook
Generally, the Hawaii housing market is a strong and prosperous one. In fact, even during the COVID-19 pandemic, property values in the state remained relatively stable compared to other states in the US. This is due to its strong and consistent economic growth, which is driven mainly by tourism. Also, Hawaii’s current unemployment rate is just 3.10%, which is significantly lower than the long-term average of 4.74%. This means more people can afford to buy or rent a home, which is good for investors.
According to a report by Real Estate and Living Hawaii, the median housing prices in Hawaii, including those for single-family homes and condominiums, have dropped. Coupled with attractive mortgage rates, this makes it a great time for buyers to enter the market, as prices are more affordable than before. That being said, you can also expect that the values of homes will eventually start to appreciate in the near future, which is great if you are planning to sell.
The housing inventory in Hawaii is also making great strides. There was a significant increase in the number of new listings over the past year, which is good news for people looking to invest in a home. This means that there are plenty of choices available when it comes to buying a property on any given day.
Moreover, according to the housing demand report by the state’s Department of Business, Economic Development & Tourism, there is a 0.6% average annual growth of housing units from 2020 and 2030, which indicates a growing demand for housing. This is further evidenced by the fact that rental prices are on the rise, making a home purchase a viable investment option.
All in all, the general outlook of the Hawaii housing market is quite positive at present. With attractive mortgage rates, an increase in inventory, and slowly appreciating values, there are plenty of opportunities for buyers who want to get into this market.
Notable Hawaii Housing Market Trends in 2023
When buying or investing in Hawaii real estate, it is important to keep yourself updated with the latest trends in the market. Here are some of the most noteworthy ones for 2023.
Significant Shift to the Buyer’s Market
One of the most notable Hawaii housing market trends in 2023 is a significant shift to the buyer’s market. This means that buyers now have more leverage when it comes to negotiating and securing better deals.
As mentioned above, the median housing prices in the state have dropped, making it easier for consumers to afford a home here. Additionally, with an increase in inventory, buyers can select from a variety of properties at different price points that suit their budget and needs.
And since buyers have more leverage, sellers may offer incentives, such as cashback on closing costs or upgraded appliances. This means that you will be able to get great deals while shopping for a home here.
However, it is important to note that the Hawaii housing market is still a competitive one. You should be prepared to act quickly and confidently when it comes to making offers, as sellers may receive multiple offers on the same property.
Growing Popularity of Short-Term Vacation Rentals
With more and more people opting for vacations, many investors are now turning to short-term vacation rentals as a way to make money from their properties in Hawaii.
The process of setting up a vacation rental property is quite simple. All you need to do is register your property with the local government or find an agency that will manage it for you. This can be done at no cost, which makes it an attractive option if you want to get into this business but do not have much capital to start with.
Once everything is set up, all you need to do then is list your property on popular websites, such as Airbnb, Vrbo, and Booking.com, to start getting bookings. This is a great way to make money from your property when you are not using it.
Increase in Foreign Investments
Another notable trend in the Hawaii housing market this year is an increase in foreign investments. The state has become a popular destination for overseas investors due to its excellent economic performance and attractive rental returns. Not only that, but foreign investors also benefit from various tax incentives and favorable depreciation rates for rental properties.
Single-Family Homes Dominating Sales
Among the residential properties in Hawaii that are most popular among buyers in 2023 are single-family homes. This is due to the demand for larger living spaces as well as more spacious outdoor areas that can be used for entertaining and recreation.
With more people opting to work from home, they are also looking for properties that offer plenty of room for offices or creative spaces. Single-family homes provide just that—lots of privacy and space all under one roof. Plus, these properties tend to have higher resale values than condominiums, which makes them attractive investments.
Furthermore, with an increase in inventory over the past year, there are plenty of choices available when it comes to single-family homes in the state. So, if you are moving in with your family, or looking for an investment property, you can easily find a great deal here.
A Surge in Demand for Luxury Beachfront Homes
As new oceanfront developments crop up in the state, there is a surge in demand for luxury beachfront homes. These properties offer breathtaking views, easy access to beaches, and other amenities, such as golf courses, shopping malls, and restaurants.
For those who are looking for an exclusive lifestyle with all the bells and whistles, these beachfront homes come with high-end features, like swimming pools, spas, spacious outdoor living spaces, and private docks. These features also make these properties have better resale values than houses in other neighborhoods.
Acceleration of Digital Transformation in Real Estate
Lastly, one of the most significant trends in the Hawaii housing market in 2023 is the acceleration of digital transformation. This includes a shift towards online-only home buying, virtual showings, and other technologies that are making it easier for buyers to purchase properties in the state.
The rise of real estate platforms, such as Zillow or Redfin, has also made it possible for you to search hundreds of listings without ever leaving your home. You can use them to compare prices between different neighborhoods, check out photos and videos of different properties, and even make offers on homes.
Moreover, many real estate agents are offering virtual tours so you can check out properties from the comfort of your home. This is a great way to narrow down your options before you go out and start hunting for properties.
Understanding the Housing Affordability in Hawaii
The housing affordability in Hawaii depends on the city or island where you plan on buying your home.
For example, Hanalei would top the list of the most expensive cities in Hawaii when it comes to real estate, with a typical home value of $3,103,946, which is more than double the state average. On the other hand, Waipahu is one of the most affordable cities in Hawaii with a median home value of $868,546. This means that you can get a decent property for much less money here compared to other cities.
Generally speaking, property values in Hawaii tend to be higher in cities or areas that are more populated, offer plenty of amenities, or have excellent views. As such, you should be prepared to pay a bit more if you wish to purchase properties in these locations.
The key to finding an affordable property is to consider all your options and research areas across the state. There are many hidden gems out there that are not as expensive as the popular tourist spots. Plus, small towns often have more reasonable price tags attached to them.
5 Best Places to Buy or Invest in Real Estate in Hawaii
Dotted with many beautiful islands, Hawaii can be an overwhelming place to start your home search. To make it easier for you, here are five of the best places to buy or invest in real estate in Hawaii.
1. Waikiki Beach
This popular tourist destination features a wide range of housing options, from affordable condos and apartments to high-end luxury homes. It has excellent rental returns due to its prime location and close proximity to beaches, shopping malls, and other attractions.
2. Kāne‘ohe Bay
Located in the northern part of O’ahu Island, this area is known for its beautiful scenery and tranquil atmosphere. You will find plenty of single-family homes as well as some townhouses that fit your budget.
This beachfront town, located on the western part of Maui Island, offers magnificent ocean vistas and luxury properties. It is home to some of Hawaii’s most expensive real estate, but its high rental returns make it worth considering for investors too.
This small city on the Big Island boasts a variety of housing options from apartments and condos to single-family homes at affordable prices. Plus, its close proximity to beaches, hiking trails, and other attractions makes it an attractive destination for buyers.
Situated in Honolulu County, this vibrant planned community features plenty of new developments as well as older neighborhoods with more reasonably priced houses that fit into any budget range.
Start Investing in the Hawaii Housing Market Today!
With the Hawaii housing market on the rise, now is a great time to consider investing in real estate in Aloha State. Whether you are looking for a family home, an investment property, or simply a place to call your own paradise away from home, there is something here for everyone.
Understanding the current market trends is key to finding the best deals and properties that fit your budget and lifestyle. And, of course, do not forget to seek the help of a real estate agent! With the right guidance, you can easily make a profitable investment in one of the world’s most beautiful places.
For more of the latest news, tips, and information on real estate, feel free to browse our site!