The term “real estate” can mean many things to different people. Some may consider real estate to be only property that is for sale, or buying and selling houses and lots.
For most people, though, what they refer to as real estate includes all types of property beyond just homes and land. This includes investment properties such as condos and rental apartments, business parcels like commercial buildings and sites, and other non-housing assets like cars and personal belongings.
Real estate in Hawaii is particularly rich due to its relatively high price tags. While some parts of the state have their share of wealthy individuals and investors, there are also plenty of ways for average residents to get into investing in real estate here.
This article will go over the basics of how much real estate is in Hawaii, what kind it is, and some simple strategies for investing. It will then look at some easy ways to invest your money in real estate including getting started as an owner-occupant, investing through REITs (Real Estate Investment Trusts), and renting out your own home.
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History of real estate in Hawaii
Since its inception, real estate has played an integral part in Hawaiian culture and history. The early Hawaiians lived within their traditions and built lāna‘o (houses) using locally available resources. As time passed, more advanced construction techniques were incorporated into house building.
Hawaii was one of the first places to have people organize themselves into villages led by kahuna (priests). These chiefs would oversee important areas such as agriculture or education, among others.
As plantation era Hawaii flourished, large fortunes were made through land ownership. Landlords would take advantage of the low supply and high demand for property, increasing prices dramatically. This is still happening today!
Since the 1980s, there has been a rise in urbanization due to climate change and population growth. Many top-level professionals now live in close proximity to major business centers, making it easy to find your next home.
Cost of living in Hawaii
Even though real estate here is expensive, it is not as costly as you may think! The cost of living in Honolulu and other major cities like Waikiki can be quite expensive due to all of the amenities that are provided for you, but outside of those two areas, your costs will drop dramatically.
Hawaii has some of the most beautiful natural surroundings anywhere in the world, making it a popular destination for both locals and tourists. There are many ways to enjoy this beauty, whether it’s taking long walks or swimming at one of the many beaches in the area.
There are also several national parks and monuments within easy reach which offer hiking, camping, and exploring opportunities. Some examples include Haleakala National Park, Kaaawa-Waianae Coastal Forest Reserve, Puuohinauku Heiau State Historical Site, and Hanauma Bay Nature Preserve.
The average home price in Hawaii is higher than the national average, so buying a house here can easily become very expensive, but there are ways to mitigate this cost. People who live in less populated parts of the state typically have lower housing expenses because they value their space more, and thus pay less for a house with an acreage lot.
People who work close to where they live usually find themselves paid back much more for the commute. Finding affordable rental homes can prove to be tricky since landlords often take advantage of poor tenants.
Demographics of Hawaii
As we have seen, there are many different types of real estate in our state, but one thing they all share is that they are dependent upon people to use them! This makes sense because almost every property category requires you to have an address where you live, or at least frequent visits so that you can check out the area.
Hawaii’s strong economy has influenced population trends. More individuals are choosing to remain here as opposed to buying a house elsewhere and moving away. In fact, according to data from RealtyTrac, over half a million people moved into the State of Hawaiʻi between 2006-2016!1
This isn’t the case everywhere though, with some areas experiencing less growth than others. Some cities actually see a decrease in population due to the expensive cost of living and limited job opportunities.2
But overall, housing costs play a major part in why people move around the country, not just in Hawaii. Many people stay in their current home for years after having children, which is great if you like your neighborhood, but it can be costly to continue paying rising rents.
There are also those who choose to buy instead of rent, but this option may be beyond their budget at this time. Either way, knowing how much land is available in each region can help determine whether or not now is a good time to invest in a house.
Language in Hawaii
There are two main languages used when it comes to real estate in Hawaii. They are Hawaiian and English.
Hawaiian is the official language of the state, but only makes up about 65% of all spoken words. The other 35% are made up of English!
When talking about property or buying a house, there are several terms that get translated into different ways depending on who you ask. These terms include “parcel”, “lot”, and “estate”.
The term “parcel” can refer to either a lot (0-1 acre) or a subdivision (over 1 acre). A lot can be anything from a few feet square to over one hundred acres!
A “subdivision” is just what it sounds like – a piece of land with houses built on it. Not every area has to have lots connected together so they work as separate properties, but most do.
An “estate” is probably the most confusing. This word does not relate to real property at all! An estate is an old French way of saying ‘funeral’.
Religion in Hawaii
As we mentioned earlier, there are several religions that have large followings in the state of Hawaii. There are also many people who practice a religion outside of one of the main denominations. These include Buddhists, Christians, Hindus, Muslims, and others.
There is no official statewide religious organization or leader like you would find with other states. This is because only two major religions exist here- Christianity and Buddhism.
However, there are some groups which promote both Christian and Buddhist values. Some of these organizations include charities or foundations which help out members in need. Others work to spread the teachings of either faith by hosting events and programs.
Religion has a strong influence on not just individual people, but entire communities as well. People who believe in the same God will often get together to share time, money, and prayers for their loved ones.
This helps them feel closer together and connected to each other and the Divine source they believe in.
Economy of Hawaii
Even though it is considered the most expensive state to live in, there are many ways to make your home here more affordable. There are several strategies that real estate professionals use to reduce their cost of living, including buying or selling down on properties, paying off debts, and investing in the market.
A large part of staying within budget means understanding how much money you have to spend on housing. This includes monthly payments as well as overall expenses.
Many people underestimate the costs of owning a house due to the tendency to only include those costs that pertain to finding and fixing current issues. These can add up quickly, especially when you factor in homeowner’s insurance, utilities, and maintenance.
There are various types of mortgages available for different individuals and situations. It is important to be aware of all of them so you know what works best for you. People with lower incomes may need special loans designed just for them, which is why it is crucial to understand credit.
Popular destinations in Hawaii
Living in or visiting Honolulu, Oahu’s largest island, is very expensive due to the cost of living there. There are many other cities across the state that offer beautiful scenery and experiences, but they are usually less expensive than the major metropolitan areas.
If you love the beach then Kailua-Kona on the west side of the Big Island is your best bet as it is quite affordable. Or if you like warm weather then visit Florida!
There are several states with no income tax and cheap real estate so look into those at least for a temporary home. You can also live close to the water in California or Oregon which makes it easy to travel when needed.
Hawaii has some of the most expensive land and homes per square foot in the country. A lot of this comes from wealthy people who own large estates and lots of houses. If owning a house is not your style you can invest in condos instead which have similar costs per month.
The most expensive real estate market of all is the one on the island of Hawai‘i, also known as the Big Island. This is not only because it is very large, but also due to its rich history that has made it an attractive destination for people around the world.
The cost of land here can be quite high, especially ocean front property! While some areas are completely overpriced, there are others where you will find affordable properties with beautiful views.
Hawaii like any other state has counties and districts. Each district may have their own rules and regulations when it comes to home ownership, so do your research before investing in a house.
General tips: As mentioned earlier, search online for current listings and information about homes and lots in different areas. Also, visit several open houses per week to get a feel for the area and get a sense of what goes on during showings.
Businesses in the housing industry go through stringent testing and certification processes, so do yours too! Realtors must take courses and exams to become members of the National Association of REALTORS® (NAR) which gives them the right to use the term “realtor.” Likewise, agents need to be certified by the State Board for Real Estate (SBER).
These two organizations work together to promote professionalism within the real estate community. Agents who are well-trained and adhere to ethical practices are the ones who deserve your business.