According to a new report just published by the Department of Business, Economic Development and Tourism for the State of Hawaii, 27.5 percent of all homes and condos sold in Hawaii since January 2008 were to mainlanders (23.5 percent) and foreign nationals (4 percent).
The report cited Texans purchasing 3,435 homes (average rate of 443 per year) from January 2008 to September 2015 accounting for 10.5 percent of all home sales to mainland buyers. The average price paid was $500,048, totaling $1.72 billion spent on second shelters. With its shorter flights, the only state to best Texas spending was California which accounted for 38.4 percent of all mainland sales and spending a whopping $680,556 on average.
The most popular islands for mainlanders were Oahu (30.6 percent), Maui (28.4 percent), Hawaii Island (31.8 percent) and Kauai (9.percent). (Geography lesson; Maui County includes the islands of Molokai and Lanai) The top 10 sub-island areas were:
For those interested in where the 4 percent of foreign buyers come from, you may be surprised to see Canada topping the list at 44.1 percent. Japan ranks No. 2 accounting for 37.9 percent of foreign sales. Their buying patterns are slightly different also.
Back to mainland buyers…
Because of population distribution and density, the Honolulu metro area is always going to be the leader in raw sales numbers (16.2 percent of mainland transactions). The island of Oahu is Hawaii’s “working island” with its largest cities (Honolulu and Kapolei) and large US military presence.
With approximately 1 million of 1.4 million residents statewide, Oahu also has the lowest ratio of mainland and foreign buyers. Since 2008, just 15.3 percent of Oahu buyers were from the mainland (11.7 percent) or foreign countries (3.6 percent). This left Oahu with 84.7 percent of home sales going to local buyers.
The other, more touristy islands are much different.
On Maui, less than half of all home sales are to local buyers while Hawaii and Kauai sold to locals 56.9 percent and 54.6 percent respectively. These numbers are important when considering Hawaii. What kind of life do you want to lead in the islands? Will a Hawaiian home be used a few times per year as a relaxing vacation spot? Or will it eventually become a full-time (retirement) home?
For those wanting only a vacation home, the outer islands offer peace and paradise with tons of resort amenities – golf, tennis, sailing, hiking, etc. This should be balanced against unexpected solitude. After all, on sparsely populated islands with high percentages of homes occupied only part of the year, neighborhoods and friendships are harder to build. Traffic is something else to consider. The state hasn’t built major new roads in decades and yet population, both tourist and resident, has increased. Is regular gridlock really paradise?
Because of their narrow focus on short-stay tourism, the outer islands lack the day-to-day amenities found in more densely populated areas. Things like vibrant restaurant, art, social activities outside resorts are more difficult to find as are mundane things like medical facilities and grocery selection.
For me, it’s been a much better option to live on Oahu while visiting the outer islands for quick trips when needed. Many believe Oahu to be Waikiki … it’s not. Waikiki is about 600 acres on a nearly 600 square mile island. Every type of terrain and beach found on the outer islands exists in abundance on Oahu with the added benefit of the choices larger populations enable – restaurants, nightlife, full-time neighbors and friends and multiple well-stocked grocery stores. Add to that all the outdoor activities Hawaii is known for – surfing, sailing, hiking, snorkeling, swimming, golf, tennis and a long list of tourist attractions. (Yes, I’m an Oahu bigot.)
But before you make a decision, take a really hard look at your needs and desires and if you have the opportunity, rent a place for an extended stay. You want to know if living on Kauai with just 70,000 people on 562 square miles is right for you.
“Cost” of Living is More Than Money
One of the most famous things about living in Hawaii are the prices of nearly everything. As you’ll see in all this month’s columns, the price of real estate is a lot higher than you’re likely used to. But the day-to-day expenses add up too. And while most things cost more, they cost even more on the outer islands. All ships land in Honolulu harbor and are then divvied up onto smaller ships that take supplies to the outer islands – two stops instead of one.
So you learn.
Farmer’s markets and Chinatown are where you go for fresh, reasonably priced local produce. Safeway imports corn from the mainland while the farmer’s market gets it from Kahuku. The state has year-round growing, so things are never really out of season. Chinatown and the docks are the places for fresh seafood at cheaper than mainland prices (for those who love sushi, Hawaii is paradise for variety and dirt-cheap pricing). Canned goods and other staples will range from 10 to 20 percent higher. Everyone has a Costco card.
Restaurant meals run the range depending on where the ingredients came from but can also be a bargain comparatively … it just depends. Asian cuisines are plentiful and cheap. A porterhouse is going to cost ya.
Utilities are the most expensive in the country I believe. With no naturally occurring oil, energy is particularly expensive. Gas can be about $1 more per gallon on Oahu and higher on the outer islands. Electricity (mostly generated by burning trash and oil) is among the highest in the nation – buying a condo with utilities included (and negotiated at lower rates) in the HOA dues is a great benefit. For the VERY patient, Hawaii has a goal of being 100 percent renewable by 2040 which should ease prices. A nifty upside will be a return of perfumed air as emissions cease.
For renovators or new home builders, the process will cost more and take longer. “Island time” refers to a slowness that can be infuriating. More than one homeowner has flown in their construction crew from the mainland to speed up the process. Planning is also critical as most things have to be ordered from the mainland and shipped on a container – there’s not a lot of warehousing beyond the very, very basics.
For example, on this trip I wanted to replace my range. Sears had two Kenmore options in stock – that was it – nothing at Lowes, Home Depot, Best Buy, etc. I’m getting my range (nicer than Kenmore), but the ship it’ll be on won’t arrive for a month. No quick fixes here.
Speaking of shipping, many mainland businesses don’t know that Alaska and Hawaii are states. While FedEx, UPS, and the Post Office all ship here, a majority of retailers won’t. Some years ago I had a knock-down-drag-out chat with a VP at Neimans who I finally convinced to ship some items. What happens is you find notes from TSA in your baggage because that cookware or faucet looked funny so they searched your luggage.
Living in Hawaii is wonderful and I will likely be here full-time in retirement, but while it’s picture perfect, there’s always the bigger picture to consider. And I’m planting the seeds with Texans because a lot of you figure it out every year!
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