The mantra in real estate has always been "location, location, location." Hawaii boasts some serious location. All of the inhabitable islands of Hawaii have a great climate, great views and beach access. However, a great location has its price. Hawaii has one of the most expensive housing markets in the nation.
Types of Ownership
There are two types of property ownership in Hawaii – Fee Simple (FS) and Leasehold (LH). Before you buy a property in Hawaii, you should know what the difference between FS and LH
is. On this page, we provide you with some useful information about the two types of ownership. We also give you some tips, where to look for your future Hawaii home.
Fee Simple (FS): With a fee simple property, you own the land and the structures on it. This is the typical form of ownership that you can find everywhere. In Hawaii, it is possible for foreigners to own land since the late 1800s.
Advantage: You own the land that your home is built on and you don't have to pay a monthly lease.
Disadvantage: Higher purchase price.
Leasehold (LH): Buying a leasehold property means that you own the improvements on the land, but not the land itself. The ground leases are mostly negotiated for a term of 55 years and when the time is up you (or your heir) will have to renegotiate with the property owners, who are not obliged to extend or renegotiate the lease.
Advantage: Initial purchase price mostly lower than with fee simple properties and the lease can be a tax advantage.
Disadvantage: Extra monthly costs through lease and insecurity about future of lease after end of term.
What is Available to Buy?
Today, state, county and the federal government own 39 percent of all Hawaiian land. About 37 percent of the land is up for private individual ownership.
Most of the islands offer a variety of Hawaii MLS options. These options range in availability and cost from island to island. They include: single-family homes, multi-family homes with an “ohana dwelling,” condos, vacant lots and commercial properties and timeshare. Let's take a look at the most popular options:
Single-Family Homes: According to Hawaii mortgage brokers, single-family is the most popular type of home ownership. Many new single-family homes are being built in Hawaii. As the owner of a single-family home you are responsible for all costs for the house and property.
Condominiums: Condos are gaining in popularity in Hawaii, especially since single-family homes are expensive. With condos you own “the paint in.” They are a group of separate homes or apartments that share common space and amenities like parking lots, pools, BBQ areas, laundry facilities, recreational areas, such as tennis courts, golf courses etc. Condos generally cost owners a monthly maintenance fee that goes to the upkeep of the common areas.
Timeshare: Timeshares have become popular in the U.S. over the past thirty years. Basically, what happens is that you buy the ownership of a piece of property (usually a resort-like accommodation with amenities) for a certain period of time each year for a certain amount of years. Most timeshares are set up so that you can trade time at different resorts with other timeshare owners. They can also be bought and sold on the timeshare resale market to avoid the wholesale prices offered through the resorts. A timeshare may be the right option if you are only looking to spend short periods of time in Hawaii every year.
What is an “Ohana Dwelling”?
An "ohana dwelling" is a cottage on the property of a main dwelling. Each county in Hawaii has its own rules and regulations concerning these units. Ohana dwellings come in handy for homeowners when it's time to pay the mortgage as monthly rental prices for a cottage can bring in an extra few hundred or thousand dollars per month.
How much will it cost?
Real estate in Hawaii is expensive. According to the Honolulu Board of Realtors, the median sales price for a single-family home on Oahu was $760,000 in June 2016, a 8.6% increase from the median price in June 2015 ($700,000). The median price of an Oahu condo was $405,500 in June 2016, a 19.6% increase from June 2015 ($338,500).
The following is an estimate of what type of properties you can buy for a certain dollar amount based on information from the Multiple Listing Service.
Less than $200,000: There are very few homes in Hawaii that fall into this price range. Those that do generally provide under 1,000 square feet of living space and are often leasehold properties.
$200,000- $500,000: This price range offers a wide-array of homes that range from 600 square feet of living space up to about 1,300 square feet. The majority of condos in Hawaii also fall into this price range.
$500,000- $700,000: The median sales price for a single-family home in Hawaii falls into this price range. Homes are bigger and often newer in this price range, although the size and condition of the properties varies greatly. There are properties that offer less than 700 square feet of living space as well as those that offer over 2,000 square feet in this category.
$700,000 and up: This is where Hawaii's luxury real estate market begins. For this amount you are usually going to get two or more bedrooms and about 1,500+ square feet of living space. There are also many properties and estates for sale in Hawaii that offer large houses and acreage that sell for well over a million dollars.
Hawaii Single-Family Home Resales
||YTD Median Sales Price 2015*
||YTD Median Sales Price 2014*
Hawaii Condominium Resales
||YTD Median Sales Price 2015*
||YTD Median Sales Price 2014*
*Comparing Year-to-Date Median Sales Prices: 1/1/2015 through 12/31/2015 with 1/1/2014 through 12/31/2014. Median price means half the prices were above and half below the given price.
Data provided by the Honolulu Board of Realtors, Realtors Association of Maui, Kauai Board of Realtors and Hawaii Information Service.
Hawaii Demographics by County
Honolulu County (Island of Oahu):
Population: 953,207 (2010 Census)
Ethnicity of population: Two main ones are: 43.6% Asian, 22.2% White
Median annual household income (2007-2011): $71,263
Maui County (includes the islands of Maui, Molokai and Lanai):
Population: 154,834 (2010 Census)
Ethnicity of population: Two main ones are: 36.0% White, 29.2% Asian
Median annual household income (2007-2011): $64,583
Hawaii County (Big Island of Hawaii):
Population: 185,079 (2010 Census)
Ethnicity of population: Two main ones are: 34.5% White, 29.2% Two or more races
Median annual household income (2007-2011): $53,591
Population: 67,091 (2010 Census)
Ethnicity of population: Two main ones are: 33.5% White, 31.8% Asian
Median annual household income (2007-2011): $64,422
What to look for in a Real Estate Agent in Hawaii
There is no lack of real estate agents in Hawaii. To make sure that you find the person who is right for you, look for these qualities:
- Willingness to help you explore the islands
- Expresses a desire to help you find what you want
- Knowledge of the Hawaiian Islands
- Member of the Board of Realtors
Remember, you should not be charged for the agent's time – whether or not you decide to purchase the property from them or not. Real estate agents are paid a percentage of the closing price of the property. If you're being charged to house-hunt,
find another agent immediately.
Quick Real Estate Tips
Decide which island would best suit your desired lifestyle.
Decide on what type of home you are looking to purchase.
Come to Hawaii prepared with your financial information.
Months before your trip, request a credit report from your bank so you can work
out any unforeseen financial problems.
If you have a lender, request a letter stating the amount you are approved to borrow