Hawaii has been the dream destination of wealthy buyers for years. Today, that dream is costs more dollars than ever before.
Living in Paradise of Hawaii Requires Deep Pockets & Fast Action
“From the second half of 2020 into 2021, luxury sales volume in the state of Hawaii grew at a frenetic pace,” said Matthew Beall, chief executive with the real estate firm Hawaii Life. “The state saw triple-digit growth in transactions…” while his firm all by itself experienced +307% growth in total dollar value.
According to Neal Norman, a director with Hawaii Life, buyers from Silicon Valley have been the main drivers of this astonishing transaction growth.
Neal said that Silicon Valley tech people, in many ways inspired by the pandemic, figured out quickly they could work remotely just as easily and just as effectively as working at the company’s on-site office. So, if working remotely works just as well, why not work and live in Hawaii? After all, said Neal, if these people really do have to go into the on-site office, that office is only a “five-and-a-half-hour plane ride from paradise.”
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Oceanfront Property in Hawaii Experiencing Surge in Sales and Prices
Both land and homes are selling like firecrackers at jaw-dropping prices in Hawaii. Luxury bungalows on the ocean are going for over $5M. Ocean view four- and five- bedroom townhouses with nearly 3,000 square feet of interior living space start at $6.4M. For buyers who want to customize, one acre lots within private communities start at $7.5M. And building prices within such private communities start at $500/square feet and usually land in the range of $1,000/square feet.
Carrie Nicholson, director of sales and marketing for the private community of Hokuli’a, said that residents living in this community are beneficiaries of an agricultural easement on their properties which enables them to “introduce” organic farming with tax credits from the state. Nicolson said such credits could reduce Hokuli’a residents’ property taxes to $200/year.
Lifestyle Choices and Word of Mouth Two Primary Factors Spurring Sales and Prices
Chuck Cary, vice president of sales and marketing for another private community in Hawaii, Kohanaiki, said that lifestyle choices enabled by remote working is a primary sales driver. Cary said, “You finish the workday here and you still have the rest of the afternoon to surf, golf and spend the day with your family and friends, not to mention taking in a sunset every evening.”
Likewise, executives of major big-tech firms are running their divisions from the islands and encouraging their colleagues still living on the mainland to move to Hawaii.
Often, it only takes two or three Zoom meetings for those mainland colleagues to get a glimpse of Hawaii from their now island colleagues’ waterfront properties before they then choose to become island people themselves.
“Newcomer” Hawaiian Residents Buying Remotely
Just as remote working is increasingly becoming the norm, remote buying of luxury Hawaiian properties is becoming the norm. Norman with Hawaii Life said that this triple uptick in sales since March 2020 is backed up with his own personal experience. He said, “In 35 years of selling, I had sold one house sight unseen. This year alone, I’ve sold eight.”
Hokuli’a’s Nicholson agreed with Cary. “I would say a majority of our purchases were sight unseen.”
Obviously, living in paradise was never cheap but, with prices for oceanfront properties now ranging from $4.5M to $44.5M, living in paradise comes at even higher prices.
Thanks to The New York Times.
