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<\/a>Budgeting for your home in the 808<\/h2>\n
If you are looking at real estate in Honolulu, chances are good that you\u2019ve realized island life doesn\u2019t come cheap. A single-family home costs a median of about a million or more (the median price for Honolulu single-family homes sold in February 2021 was $920,000), and if you\u2019re looking at mid-city condos, you can expect to spend closer to $500,000 (the median price of condos sold in February 2021 was $455,000).<\/p>\n
Land on the island of Oahu is what is valuable, not so much the house that\u2019s on it. It\u2019s a small island, so there is only so much land to go around, and it can be hard to come by. It is common for Hawaiians to keep a family home for generations, making sure that their children and grandchildren will be able to live on the island without breaking the bank.<\/p>\n
Ihara says, \u201cLand is super valuable; you can find a piece of dirt for $1.7 million, while the house built on it is only worth $200,000.\u201d This makes purchasing condos or high-rise apartment units much more affordable than single-family homes, but if you buy land on the island, you will most certainly be making a remarkable investment.<\/p>\n
Because Hawaiian land is so desirable, when it comes to making offers, cash is king<\/a> (unfortunately, not as sweet for buyers as King\u2019s Hawaiian Rolls). The market moves fast on Oahu \u2014 if a house sits on the market for more than a couple of weeks, that\u2019s considered a long time without a sale. The median days on market for a single-family home in February 2021 was only 11, meaning it took just 11 days after listing the home for a buyer to make a winning offer.<\/p>\n This makes cash offers, or at least partial cash offers, much more appealing to sellers than buyers relying entirely on a mortgage to finance a house. If you don\u2019t have the budget to buy a home in cash, Ihara says,<\/p>\n \u201cYou will need to bring at least a 25% to 30% down payment<\/a> to the table in order to be considered a competitive buyer.\u201d<\/p><\/blockquote>\n Unfortunately, this means even median-income buyers struggle to purchase homes in Honolulu, which is why the median income of homebuyers in Honolulu is higher than buyers on the mainland. In 2013, a survey<\/a> was conducted for new Hawaiian homebuyers stating that the median household income of buyers was $84,500 nationally and $124,500 in Honolulu.<\/p>\n Because land is precious in Honolulu, most housing structures on the island aren\u2019t going to be new builds. Most single-family homes east of Pearl Harbor were built in the 1950s, \u201960s, and \u201970s, and the median age of Honolulu real estate was 46 years old in March 2019<\/a>, while the mainland average was 37 years old<\/a>. You can also expect that older homes will not have typical drywall and insulation; instead, you\u2019ll have tongue-in-groove single-wall construction, meaning only wooden walls separating outdoors from inside.<\/p>\n Because of the tropical climate, houses aren\u2019t likely to come equipped with the HVAC systems you might be used to on the mainland. To deal with the heat, most homes use split A\/C systems, and if you want to upgrade to central air, you might need an expensive permit for renovations. Building permits, and even renovation permits, can be costly in Honolulu (the bare minimum permit fee is $18 per every $500 spent on repair<\/a> and this includes anything from building a new home to installing a new faucet), so it is best to pick a home that doesn\u2019t need further work, unless you have the budget for permitting.<\/p>\n Basements and attics are not typical in Honolulu homes; most homes are built \u201cpost and pier,\u201d meaning they are set on posts above the soil, with crawl spaces<\/a> underneath. This is because most of the island\u2019s homes are built on adobe soil, which expands and contracts in response to the weather. When it rains, the soil expands, and in the summer dryness, it contracts, so homes are built slightly off the ground to avoid foundation issues. Because of this, it is highly recommended that you get a foundation assessment before purchasing.<\/p>\n When buying any new home, thorough inspections are always a necessary step, and this is no different when finding your Aloha address. However, there are some specific things to look out for in conducting inspections in Hawaii.<\/p>\n According to Oscar Libed, Owner of Inspect Hawaii, LLC<\/a>, homebuyers and sellers must be careful when choosing a home inspector. Since Hawaii does not regulate home inspectors, anybody can call themselves a \u201chome inspector\u201d and they are not bound by any standards of practice, including a code of ethics.<\/p>\n The home inspector should at least be a member of one of the two nationwide established home inspector industry trade associations: the American Society of Home Inspectors (ASHI) or the National Association of Certified Home Inspectors (NACHI).<\/p>\n Also, be careful when choosing a home inspector based on price alone. Libed wisely states, \u201cTo quote Ben Franklin, The bitterness of poor quality remains long after the sweetness of low price is forgotten.\u2019 Always get the best value for the money spent versus the cheapest cost.\u201d<\/p>\n Due to the tropical environment, experts recommend getting a mold inspection no matter where you are buying, and especially if you are buying in one of Oahu’s valleys (like Honolulu), where moisture can be trapped more easily.<\/p>\n Flooding can be a big issue in Hawaii, but luckily there are easily accessible maps of FEMA floodplains both for Honolulu and the rest of the island. Although your new Hawaiian dream house is located in the middle of the Pacific Ocean, flooding mainly occurs due to rainstorms on the island, so surprisingly, your home is more likely to flood if you live closer to a river than the beach. Flood insurance is not only recommended, but it\u2019s really a necessity in a wet environment like Hawaii.<\/p>\n The big bad bug on the island is the termite, and due to the majority of housing in Honolulu being wood construction, a termite inspection is recommended for any home purchase.<\/p>\n Other recommended inspections before buying include a gas line inspection, A\/C inspection if your home has central air, and a pool inspection for peace of mind when lounging poolside.<\/p>\n Another huge perk of island living is that many homes have photovoltaic solar energy panels installed for electricity, which is a big win for both the environment and your electricity bill. Ihara says this can make energy bills go from \u201c$400 a month down to $18 a month.\u201d That said, if your home is equipped with photovoltaic panels, you should absolutely get them inspected before purchasing.<\/p>\n Because of all the specific complications of buying on the island vs. the mainland, more than anything, it will be important to find a local real estate agent who\u2019s intimately familiar with the Honolulu market. It will be best for you \u2014and your bank account \u2014 to find a long-term local, someone whom you can trust to understand common issues with Hawaiian housing, the lay of the land, and the Aloha culture.<\/p>\n Newcomers to island life need to understand that the culture is very different from mainland American cities. Ihara says: \u201cIt\u2019s all about Aloha.\u201d<\/p>\n The culture of \u201caloha\u201d means more than both hello and goodbye; it evokes mutual respect for your neighbors and fellow Hawaiians. If you\u2019re used to a fast-paced and aggressive city life, you\u2019re in for a big change moving to Oahu. Island life moves slower, and you need to prepare to leave your big-city attitude behind.<\/p>\n For example, Ihara explains,<\/p>\n \u201cIf you\u2019re merging, and you don\u2019t wave \u2018thank you\u2019 to a car that lets you in, that\u2019s considered rude.\u201d<\/p><\/blockquote>\n Also, be sure to leave your shoes at the door. Due to the influence of indigenous and Asian populations on the island, it is part of the Hawaiian lifestyle to keep your shoes off in the house, so kick them off before entering your new neighbor\u2019s home.<\/p>\n As long as you are respectful and open to embracing the aloha culture, you shouldn\u2019t have any problem fitting in as an island newcomer.<\/p>\n Besides being able to find delicious pineapple, loco moco, or pok\u00e9 anywhere in the city, the neighborhoods of Honolulu have a lot to offer both culturally and in terms of housing variety. Here are a few neighborhoods where you can find your version of island paradise.<\/p>\n Located in southwest Honolulu, Waikiki is a bustling area filled with beautiful hotels, ocean views, and great food.<\/p>\n Although Waikiki is the main tourist area of the city, it might be just what you\u2019re looking for if you prefer condo life in the city. Condos in Waikiki don\u2019t come cheap, but its proximity to high-end shopping, bars, restaurants, nightlife, and Waikiki Beach make it an appealing area to call home. The average selling price in 2020 was $450,000 for a condo near Waikiki Beach, with COA (condo-owners association) fees<\/a> running anywhere between $100 and $3,000 a month, depending on the building\u2019s amenities. If you’re looking for a true \u201cdowntown\u201d living experience in Hawaii, this might just be exactly what you\u2019re after.<\/p>\n If you\u2019re looking for true island luxury, go no further than the Kahala neighborhood. Located just east of Waikiki near Diamond Head Beach Park, Kahala feels very much like the Beverly Hills of Hawaii, boasting luxury homes, a golf course and spa at the world-class Kahala Hotel & Resort, lavish Sunday brunch at Hoku\u2019s or oceanside dinner at Hau Tree, and celebrity sightings on Kahala\u2019s upscale private beaches.<\/p>\n Although the area feels fit for Hawaiian royalty, it is also home to Honolulu\u2019s growing sustainable food movement, as the Kapi\u02bbolani Community College (KCC) farmer\u2019s market calls the Kahala neighborhood home. The KCC market is one of the largest local food and produce markets in Hawaii, making the Kahala neighborhood a destination for foodies and farmers alike. You are unlikely to find a home for less than $1 million here, with the median list price being $2.75 million in 2019.<\/p>\n If you\u2019re looking for a quaint neighborhood with great coffee shops such as Coffee Talk, locally owned stores like Hungry Ear Records, and locally-loved restaurants like Big City Diner, Kaimuki is the place for you. Kaimuki is a mostly residential neighborhood, and it has a very livable feel for anyone who wants a more authentic local experience in moving to the island.<\/p>\n The neighborhood also boasts two great parks to bring your furry friend, \u201cChristmas Tree Park\u201d as the locals call Pu\u2019u O Kaimuki Park<\/a>, and Diamond Head Bark Park<\/a> for fun with your tropical pup. You will find many picturesque homes in this neighborhood with a median price of $1.43 million.<\/p>\n One of the most popular places to find homes for less than $1 million is Kalama Valley, about a 30-minute commute from Downtown Honolulu, giving the area a more suburban feel that is still close to the bustle of downtown.<\/p>\n Kalama Valley is a residential area that is still close to beaches like Sandy<\/a> and Makapuu<\/a>, making it a great area to find your perfect Hawaiian family home. Single-family homes in this area are also a bit bigger than other areas of the island, most with three to four bedrooms on 5,000-to-7,000-square-foot lots.<\/p>\n In Oahu\u2019s valleys, mold can be more of an issue than in the higher-elevation areas, so be sure to get a mold inspection if you are looking in the Kalama Valley area.<\/p>\n Mariner\u2019s Valley has a similar suburban feel to Kalama Valley, but with more of a more historical vibe. Located in Hawaii Kai (East Oahu), homes in Mariner\u2019s Valley were built between 1969 and 1972, giving homes an interesting mid-century-modern feel, though most homes have been renovated to include updated appliances.<\/p>\n Because of the zoning and permitting rules on Oahu, be advised that if you buy a home that has not been renovated, desired renovations could be costly. Check with your real estate agent to make sure you can renovate without an expensive permit.<\/p>\n Mariner\u2019s Valley and Kalama Valley are great areas for growing families, and the Hawaii Kai ZIP code has GreatSchools ratings from 7\/10 to 10\/10.<\/p>\n Kamiloiki is actually an addition of Mariner\u2019s Valley, located in the back Northeast portion of the neighborhood. Here you can find some newer builds, and you can actually see the dividing line between the pre-1987-built homes and the newer homes (built after 1991) starting at the beginning of Miloiki Street.<\/p>\n Some of the newer-build homes in the area are a little larger than others in Mariner\u2019s Valley, with lot sizes between 9,000 and 13,000 square feet. If you\u2019re looking for a newer house in a beautiful suburban area, Kamiloiki might be for you!<\/p>\n Fortunately for sellers, because the market moves so quickly, there isn\u2019t really a bad time to sell anywhere in Hawaii. Unfortunately for buyers, Hawaii is an almost perpetual seller\u2019s market, meaning that buying below listing price or making concessions with a seller is very rare.<\/p>\n If you are looking to purchase a home below listing price, you will have to look specifically for homes that have been on the market for longer periods (in Hawaii, this only means about a month).<\/p>\n The glass-half-full look at the Hawaiian buyer\u2019s market is, assuming that you have the funds to buy a house in Honolulu, there\u2019s never a bad time to start living your Hawaiian dream.<\/p>\nUnderstanding island housing in Honolulu<\/h2>\n
Avoiding a money pit in paradise<\/h3>\n
![\"It's](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2021\/08\/buy-a-house-in-honolulu-aloha-666x381.png\")
<\/a>Settling into Aloha<\/h2>\n
Mapping out Honolulu\u2019s Neighborhoods<\/h3>\n
Waikiki<\/h4>\n
Kahala<\/h4>\n
Kaimuki<\/h4>\n
Kalama Valley<\/h4>\n
Mariner\u2019s Valley<\/h4>\n
Kamiloiki<\/h4>\n
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<\/a>When to buy a house in Honolulu<\/h2>\n
Find a top buyer\u2019s agent in Honolulu<\/h3>\n