Top 5 Best Real Estate Investment Markets in Hawaii (2024)

FAQs

Is it a good investment to buy property in Hawaii? ›

With its limited availability, stable market, and growing vacation rental market, owning a piece of Hawaii is a solid, safe investment. Whether you're looking for a vacation home, rental property, or a long-term investment, Hawaii real estate offers something for everyone.

The hottest housing markets include those markets in North Carolina, Colorado and Texas that were also popular during the pandemic, including Raleigh and Durham, Denver and Austin. Markets to watch that improved the most between November and December 2022 include Portland, Oregon, Richmond, Virginia, and St.

What state has the highest ROI on real estate? The state with the highest one-year ROI on residential single-family homes is Arizona with 27.42 percent, according to iPropertyManagement data. The next two highest states are Utah with 27.05 percent and Idaho with 27.02 percent.

Investors probably need no explanation why and convincing that Florida tops the list of the best states for the long term rental investment strategy. Our nationwide rental market analysis shows that, on average, you can expect the highest rate of return in the Sunshine State.

Hawaii Real Estate Market Statistics

The Hawaii sale-to-list price dropped 3.3 points year-over-year to 97.9%. 17.2% of home prices dropped in March 2023- compared to just over 10% in March 2022.

This is not surprising, as Honolulu is one of the most popular destinations and a business center. Generally, the lowest housing costs are on the Big Island, which is considered the cheapest Hawaiian island to live on.

Texas replaced California in 2023 as the strongest housing market by state. With an existing home inventory of 83,222, the available houses for sale have more than doubled since last year. It has seen a drop of about 6% in new construction and is now at 248,648 since 2022.

Despite what some may think, 2023 is still a good year to invest in real estate, thanks to advantages like long-term appreciation, steady rental income, and the opportunity to hedge against inflation. Mortgage rates are expected to decline, but the housing market is likely to remain competitive due to low supply.

Some of the most successful entrepreneurs in the world have built their wealth through real estate. In fact, it's estimated that 90% of all millionaires invest in some form of real estate. There are several reasons for this, but in today's article, we'll share seven reasons why millionaires invest in real estate.

Where is real estate growing the fastest? ›

All of the data below comes from the Census Bureau's 2021 1-year American Community Survey (ACS) Estimates. Hawaii has the lowest property tax rate in the U.S. at 0.27%. The Aloha state has a home median value of $722,500.

The return on investment (ROI) was calculated based on housing price appreciation, rental income, and exchange rate fluctuations. Ten U.S. cities made it to the top 50 on the return on investment list, including Philadelphia, Phoenix, Houston, Sacramento, Tampa, Dallas, Orlando, Nashville, New York and Atlanta.

Median sales prices for March 2023 increased from January and February but were mixed compared to a year ago. The monthly median price for single-family homes declined 5.8% from $1,150,000 in March 2022 to $1,083,750 last month.

The state has the fourth-highest per capita rate of homelessness in the nation after California, Vermont and Oregon. On Thursday, new data showed the islands experienced net population loss five of the last six years.

Selling a home isn't easy. It's a high-stakes, complex transaction and requires a considerable amount of time and expertise to get a good outcome. If you're looking to sell your Hawaii home for the best price — and minimize stress along the way — you need to find a top-rated real estate agent in your area.

Hawaii Loa Ridge - Considered to be one of the most premier gated communities in Oahu, Hawaii Loa Ridge is located on the south shore of Oahu about 15 minutes away from Waikiki. Lavish homes have access to the best panoramic views of the Pacific Ocean and eastern Oahu.

If amenities, urban life, and spectacular surf are your preferences, you may like Oahu. If you like rural living but also might enjoy some amenities and tourists along with beautiful landscapes, Maui may be your place. And if you want wide-open spaces and have an adventurous spirit, you may prefer the Big Island.

Federal tax benefits

Because of the many tax benefits, real estate investors often end up paying less taxes overall even as they are bringing in more income. This is why many millionaires invest in real estate. Not only does it make you money, but it allows you to keep a lot more of the money you make.

What are the most overrated real estate markets? ›

The most overvalued markets to purchase a home tend to be in California, but also include Seattle, Washington, and “Zoom towns” such as Boise, Idaho, and Greeley, Colorado. The most overvalued markets to rent a home are mostly found in California and Florida.

In 2022, Toronto, Canada, was the housing market most at risk with a real estate bubble index score of 2.24. Frankfurt and Zurich followed close behind with 2.21 and 1.81, respectively.

It's also worth noting that while foreclosure rates are up year-over-year, experts do not expect to see a wave of foreclosures in 2023, even where home values are depreciating, as many homeowners have substantial equity due to progressive home price appreciation in recent years.

A midsize town in Georgia about 75 minutes by car from Atlanta is the nation's hottest real estate market, as a tide of renters flee pricey cities in search of homes in more affordable places. That's the takeaway from a new Bankrate analysis of nearly 200 housing markets around the country.

Although home prices are expected to improve in the second half of the year, the California median home price is projected to decrease by 5.6 percent to $776,600 in 2023, down from the median price of $822,300 recorded in 2022.

The combination of persistent buyer demand and low inventory has driven property prices up. There are fewer sellers, so prospective buyers need to contend with higher housing prices. As such, if you buy a home in 2023, you're likely to pay a premium.

2023 is a balanced year for housing supply and demand. This is ideal for retail purchasers and rental property investors. No longer a “seller's” market. Rising interest rates raise the monthly mortgage payment, which reduces homebuyers and lowers property values.

How much do top 1% realtors make? ›

Each real estate office sets its own standards for top producers, but it's safe to say that a top producer would have to sell at least one home per month to qualify. Top producers earn around $112,610 a year to start, according to the BLS. 1 Mega-stars could earn $500,000 per year and up.

Commercial real estate is known to yield higher returns than residential real estate. If you can afford to manage a commercial space, it can prove lucrative over time, depending on your area.

Some of the most popular banks for millionaires and billionaires include JPMorgan Chase, Bank of America, and UBS. Other examples of banks that may be popular among the ultra-rich include: Private banks: Private banks are banks that offer specialized financial services to high net worth individuals and families.

Typically, winter time is the slowest of the year to sell a property, specifically November, December, and January. However, there are some exceptions because there are several conditions that affect the housing market.

Home prices in some US cities are finally cooling, with Seattle's housing market slowing faster than any other in the country. The 10 fastest-cooling markets are almost entirely in the West, with Seattle, Las Vegas, and the three California cities of San Jose, San Diego and Sacramento leading the way.

A major reason Hawaii has low property taxes is that it offers generous exemptions on owner-occupied residences. Homeowners are eligible for exemptions ranging from $80,000 to $160,000, depending on their county of residence.

Unfortunately, there are no states without a property tax. Property taxes remain a significant contributor to overall state income. Tax funds are used to operate and maintain essential government services like law enforcement, infrastructure, education, transportation, parks, water and sewer service improvements.

As of 2023, eight states — Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming — do not levy a state income tax.

Investors probably need no explanation why and convincing that Florida tops the list of the best states for the long term rental investment strategy. Our nationwide rental market analysis shows that, on average, you can expect the highest rate of return in the Sunshine State.

Where in America has the best ROI? ›

1. Wyoming: 203% 5-year ROI on College. Wyoming has some of the highest wages for high school graduates: $31,936 a year, on average. This results in a 43 percent increase in pay for earning a bachelor's degree.

Mississippi

Mississippi, “The Magnolia State,” is the birthplace of Elvis Presley and the delta blues. It's also the cheapest state to buy a house in 2023. As of 2020, the total state population was 2,961,279, making it the 32nd most populated state. The most populated city is Jackson, with 153,701 residents.

However, there are also potential drawbacks to living in Hawaii, including the high cost of living, limited job opportunities, and the risk of natural disasters. The state's isolation from the rest of the nation and traffic congestion in larger cities can also be challenges for residents.

Living in Hawaii has its perks, including year-round warm weather and access to some of the most beautiful natural scenery in the world. The island lifestyle is laid-back and relaxed, and there is a strong sense of community and connection to the land.

A Hawai'i Quirk: You Own the Home But Not the Land.

If you're just looking at the sheer number of incidents on each island, Kauai is the safest island to live on.

If amenities, urban life, and spectacular surf are your preferences, you may like Oahu. If you like rural living but also might enjoy some amenities and tourists along with beautiful landscapes, Maui may be your place. And if you want wide-open spaces and have an adventurous spirit, you may prefer the Big Island.

What is the most affordable place to live in Hawaii? ›

If you're after the best sales price, the best month to sell in Hawaii is August when houses sell for 10.83% more than average. If your priority is speed, May is the best time to sell because homes tend to sell 8 days faster.

What is the actual Hawaii capital gains tax? The Hawaii capital gains tax on real estate is 7.25% of the gain plus depreciation. If the collected amount is too large, how do you obtain a refund? If the 7.25% of sales price withholding is too large, the owner files a Hawaii form N-288C after closing.

Will You Have to Pay Taxes When You Sell Your Home in Hawaii? Sales tax is not applied to property sales on either a federal or state level. However, if your home appreciated in value since you bought it, you may need to pay capital gains taxes on your annual tax return.

To live comfortably in Hawaii, an annual income of around $70,000 to $100,000 for a single person, or $120,000 to $200,000 for a family is recommended. Is it expensive to live in Hawaii? Yes, Hawaii is known for its high cost of living due to factors such as housing, groceries, utilities, and transportation.

According to 2021 population estimates from the U.S. Census Bureau, the biggest growth of Native Hawaiian and other Pacific Islander populations was in Clark County, Nevada, which includes Las Vegas, and Sacramento County, California.

Hilo, Big Island

Hilo tops this list as the best place to retire in Hawaii for its reasonable cost of living and relaxing lifestyle. In fact, it's much cheaper than the more popular cities in Hawaii. The cost-of-living index is 18% less expensive than the state average, according to AreaVibes.

What is the cost of land in Hawaii? You won't find much for under $10,000 per acre, with some of the higher-priced regions costing hundreds of thousands per acre. Fortunately, places such as Captain Cook, Hawaii County and Pahoa offer an abundance of properties.

In September 2014, Facebook founder Mark Zuckerberg bought two adjacent properties on Kauai's North Shore. Zuckerberg paid $49.6 million for 350 acres that includes the area above Pila'a Beach. Zuckerberg also purchased the 357 acre Kahu'aina Plantation, a former sugar plantation, for $66 million.