General Living Environment in Hawaii
Hawaii real estate is fascinating as the living habitat on this archipelago in the South Pacific is outright stunning.
Hawaii comprises eight islands that span 1,500 miles in all. Each of these islands has its character, customs, and attractions for travelers and residents.
However, they all stand united under the banner and culture of the 50th, most recent state of the United States of America.
The pristine, natural waters of the South Pacific Ocean naturally surround Hawaii’s residential areas and vacation homes, and condos.
Hawaii is home to some of the most beautiful beaches in the world. At the same time, the islands also boast world-class resorts and residential areas. And its exotic wildlife, tropical fauna, and lush forest are unique on planet earth.
Regardless of which island you choose to visit or live on, your experience will be unlike any other with an abundance of the most picturesque nature and scenery.
Hawaii Real Estate Areas
Honolulu, on the island of Oahu, is the archipelago’s hub of activity and population. But it is not the only place to go on the Hawaiian islands. Especially not if you like it remote and quiet.
There is a consistent flow of travelers and the island of Hawaii, aka the Big Island, Maui, Kauai, Molokai, Lanai, and Kahoolawe, enjoying the archipelago’s precious nature and culture. Lucky residents call these islands their home.
Niihau, the farthest west and oldest island, is privately owned and not open to the public.
The ground, coming into existence from lava flows from the Pacific Ocean floor, are all beautifully carved out of volcanic rock with lush green rainforests, sandy beaches, and rugged deserts.
Hawaii vacation rentals are a favorite way to enjoy the islands without being among the numerous tourists visiting the islands. Enjoy a traditional luau, a hike up an active volcano on the Big Island, and relax with a book on a quiet, windy beach, all on the same day.
The Hawaii Real Estate Market: Let’s Talk about Honolulu
The Hawaii real estate market offers diverse real estate investment opportunities that rental property investors will find challenging to locate on the continental US.
The real estate market on the Hawaiian islands is as varied as their living environments. Therefore, let’s focus here on one of the prime locations in the Hawaii property market, which is, of course, the Honolulu real estate market.
The first salient feature of real estate in Honolulu is its quite high price. So naturally, an expensive real estate market attracts only investors with sufficient capital and cash equity.
To those having sufficient funds at their disposal, Honolulu real estate investments offer robust benefits:
- The Hawaii property tax rate is the lowest in the United States
- The Honolulu real estate market is generally friendly towards landlords
- The islands strong economic fundamentals assure profitability of rental properties in Honolulu for the long-term
Six Housing Market Trends for Hawaii
There are at least six trends for 2020 supporting the possible benefits for investors in Hawaii real estate:
Hawaii’s Economy Will Continue its Steady Growth
In Honolulu’s role as the state capital, the city’s various government offices sustain a significant number of administrative jobs. Adding to this positive economic impact are the military bases on the island. Estimates see the GDP growing by 1.2% in 2020. And this growth is not only reliant on tourism as many may believe.
The Island’s Tourism Sector Keeps Expanding
A prosperous tourism industry facilitates a healthy housing market.
Because tourist arrivals create business and job opportunities for residents. And rising income creates demand for commercial and residential real estate
This virtuous cycle will remain intact for the Honolulu housing market as local tourism continues to grow.
Forecasts predict an increase in visitors of about 2.5% for 2020, with the growth of visitor spending at about the same rate.
Employment in Honolulu Will Remain Among the Strongest in the US
The current unemployment rate for Honolulu is about 4%. This rate is well below the nation’s average.
And the good news is that the already low employment rate is likely to decrease further. Forecasts predict a job market growth of 1.3% for the current year.
Construction Adding to Housing Inventory in Honolulu Likely to Remain Moderate
Honolulu housing areas are surrounded by the island’s natural reserves, making it geographically clearly confined. It is unlikely that the government will allow expansion of housing construction into the protected areas. So Honolulu will continue to be a rather crowded real estate market.
As a result, the Honolulu housing market is one of the most expensive in the United States.
The Real Estate Market in Hawaii is a Buyer’s Market
Despite strong economic fundamentals on the island, the real estate market is correcting downwards in line with other markets in the US and abroad. After almost a decade of rapid price appreciation in Honolulu properties, this is economically not particularly worrying.
But it bears well for real estate investors as it adds an advantage to them in negotiations with sellers. So competition has decreases making life for buyers easier as also property financing tends to be more readily available.
Short-term Rental Regulations Are Increasingly Tough in Honolulu
The city restricts short-term rental regulations in its housing market and is getting more strict.
This restriction means you would need to take several bureaucratic hurdles to become an Airbnb host in Honolulu. Units occupied with non-owners are illegal.
As a result, investing in short-term rentals in Honolulu is probably not a good idea. And the county of Honolulu is about to tighten inspections to enforce zoning laws.
So, in conclusion, while living in Hawaii and buying a property here has a lot going it, it is, of course, not paradise.
But the housing trends described above indicate that the Honolulu Hawaii real estate market has a positive outlook because these trends bolster demand for investment properties.