Pitfalls of Buying Property in Hawaii

The vast blue ocean, the towering green mountains, the endless vibrant rainbows, the ‘aloha’ spirit: living in Hawaii is truly considered paradise. While the beautiful scenery, outdoor activities, and inviting culture may draw you towards buying a property in Hawaii, not everything is perfect in paradise. Homeowners in Hawaii often experience a number of cons of buying property in Hawaii.

Homes are smaller than the U.S. Mainland, and typically much more expensive per square foot.

Do you imagine living in a 2000 square foot single-family home with large rooms and closets on an average-sized lot, such as 7,500 square feet? While this is a typical home in many U.S. Mainland suburban communities, in Hawaii a home like this will come with a high price tag.

The median single-family home price on Oahu reached $950,000 in March 2021, and the average sales price was $1,226,827, according to data from the Honolulu Board of REALTORS®. The price per square foot is well over $600 for single-family homes in most Oahu neighborhoods, including Mililani, Kapolei, Ewa Beach, Kaneohe, and Kailua. Neighborhoods like Kailua and Hawaii Kai might have even higher price tags.

Also, realize that there simply are not a lot of huge homes even for sale in Hawaii. Land is limited in Hawaii, so there are not as many options to build or buy expansive homes. Most single-family homes are two to four-bedroom, with modest room and lot sizes. However, there are also many beautiful mansions in Hawaii for the right price points (well over $1 million).

The real estate market is fierce with few options available.

The Hawaii real estate market is hot! From January to March 2021, 50% of single-family homes that sold were over the asking price. For condos, 29% sold above the list price. In March 2021, single-family homes only spent an average of nine days on the market.

The demand for housing in Hawaii is fierce. Shannon Heaven, president of the Honolulu Board of REALTORS® said, “Despite new listings, demand continues to outpace our limited housing inventory. This lack of inventory is driving a very active and competitive market for prospective homebuyers on Oahu.”

If you are even thinking about buying property in Hawaii, realize that a competitive offer will most likely need to be given and delays in decision making could cause you to miss out on the opportunity to purchase a property in Hawaii. If you see your Hawaii home, work with your real estate agent to immediately put in your best offer. Then cross your fingers, as the seller will most likely have multiple offers to choose from.

The cost of living in Hawaii is high compared to most other places in the U.S.

Once you move into your Hawaii home, you will then be able to live in paradise – at a price. According to Expatistan as of 2021, Honolulu is the 7th most expensive city in the United States and the 8th most expensive in North America. Honolulu is also the 21st most expensive city in the world⁠! To live comfortably in Hawaii, some studies show that you’ll need a whopping salary of over $122,000.

Everything is typically more expensive in Hawaii than on the U.S. Mainland. Gas is well over $3.00 per gallon. A gallon of milk is around $9 at Safeway, one of the main grocery stores on Oahu. A loaf of sandwich bread will cost you around $5 on Oahu, while avocadoes, which can be found in abundance on some Hawaii trees, will cost you around $2 per avocado at Costco.

The cost of living in Hawaii in 2021 often shocks people who are new to the Hawaiian Islands. Read more about the cost of living in Hawaii, including ways to cut costs and comparisons of how much it costs to live in Honolulu vs. other places, like California, New York.

Construction is often costly, and Hawaii homeowners should expect construction delays.

Labor and construction materials shipped across the ocean also cost more in Hawaii. Do you want to renovate your kitchen? Expect to pay much more than the U.S. Mainland. How much does it cost to build a home in Hawaii? Read more from our Oahu construction experts here.

When you have saved the money to renovate, repair, or even build your dream home, realize that there are often construction delays in Hawaii. There are a limited number of contractors and construction workers, and when you find your desired Hawaii contractor, realize that there may be some unforeseen delays. Delays could be caused by uncontrollable shipping difficulties, as shipping construction materials is often done via shipping containers to the Hawaiian Islands; only a certain amount of shipping containers reach Hawaii via large barges each day, and when they reach the docks, only a certain amount are unloaded each day.

Other construction delays include the long process to secure building permits in Hawaii. The Honolulu City and County’s Department of Planning and Permitting (DPP) has a reputation for taking some time to approve building permits. Another delay could be due to inclement weather, such as excessive rain or hurricanes. Another delay could be due to the unavailability of workers or even workers being stuck in terrible traffic. In short, construction in Hawaii is not always efficient or cost effective, so this could turn into a frustrating pitfall of Hawaii homeownership.

Utilities are expensive and not always reliable.

What is the cost of electricity in Hawaii? The cost of electricity on Oahu ranges from $0.49 kilowatt-hour (kWh) to $0.62 KWH, depending on the time of day. This rate increases regularly and is higher than many places in the U.S. Mainland. A pro of Hawaii homeownership is that solar energy can be an option for many homeowners, offering much lower electricity bills.

Also, electricity in Hawaii is run by only a few companies. Hawaiian Electric Company (HECO) is the electricity supplier on Oahu. Since there is only one company, homeowners only have one company to rely on during emergencies. Powerlines on Oahu are above ground in many areas, and the rich soils cause the foliage to grow quickly, causing winds and tall trees to knock over power lines easily. When will the power turn back on? This is dependent on how quickly HECO can respond. Due to weather and electricity infrastructure in some neighborhoods, Hawaii homeowners should expect to live without electricity for a few hours every year.

While the Hawaiian Islands do have access to Internet in most places (besides very rural areas on the Big Island, Maui, or Kauai), there are a limited number of Internet service providers in Hawaii. On Oahu, most homeowners will choose Hawaiian Telcom or Spectrum, but which is better? Both offer fiber optic options, but both have also been known to have drops in service at times – another pitfall of buying property in Hawaii.

Saltwater damage or mold from the humidity creates a need for seemingly constant upkeep.

While the blue seas of Hawaii are beautiful, the salty and humid air can do some damage to properties.

Any type of metal will quickly rust, such as those galvanized nails holding your siding together or that beautiful metal door leading into your home. Stainless steel materials are recommended for longer-lasting construction, but they also rust over time.

The humid air can cause wood to swell or rot. While painting or staining wood can help to preserve wood for longer, it always seems that no matter how hard Hawaii property owners try, the air seeps into the wood. This can cause difficulties in opening wood gates or even damage to walls and outdoor sheds.

Some contractors specialize in building homes that are made to withstand the Hawaii air. However, the majority of Hawaii homes were not originally built with these measures. Read more about Lex Allen’s recommendations for building homes in Hawaii that can withstand Hawaii’s humid, salty air; Lex is the owner of Solid Build Construction, Inc., based in Kapolei.

Weeds can easily take over garden beds, and creepy bugs can infiltrate homes.

Hawaii has rich soil that can easily grow a range of food – from herbs like basil and mint, to fruit trees like avocado and papaya, to vegetables like lettuce and cucumbers, to Hawaiian staple foods like taro. However, this rich soil also causes weeds and invasive species to easily grow.

Here are some of the top weeds and invasive species that can easily take over Hawaii gardens in a matter of months if the right precautions (like mulching and consistent upkeep) are not taken:

• Knapweep
• Wild garlic
• West Indian foxtail
• Barbwire grass
• Canada thistle
• Pepperweed
• Lyon’s grass
• Witchweed
• Many more

In addition to weeds that can easily take over manicured lawns or well-planed garden beds, Hawaii also has several bugs that can cause damage to properties. Termites are one of the top predators for Hawaii homeowners. Ground termites have been known to eat away at supporting beams and walls and cause entire homes to collapse. The good news is that homes in Hawaii go through a termite inspection during the escrow phase, and almost all wood used for building is termite treated.

Some other scary bugs that Hawaii homeowners will need to face include centipedes, flying cockroaches, ants, flies, and cane spiders. Not to mention, Hawaii also has mice and rats that have been known to visit homeowners. Regular termite fumigation, as well as insect and pest control, are preventative measures that are recommended for Hawaii homeowners.

Natural disasters – like floods, hurricanes, or even volcanic eruptions – are real hazards when living in Hawaii.

Are there active volcanoes in Hawaii? Yes, on the Big Island. In 2018, over 700 homes were destroyed by Kilauea’s eruption. Mount Kilauea is one of the most active volcanoes in the world, and residents who live on the Big Island experience its effects. Kauai, Oahu, and Maui do not have any active volcanoes; however, at times the volcanic air, or vog, will reach all the islands, depending on the airflow and the activities of Kilauea.

Does flooding happen in Hawaii? Yes, almost every year on all Hawaiian Islands, including Oahu, properties are flooded. In 2021, around 100 properties in Haleiwa and Hau‘ula on the North Shore of Oahu experienced major devastation from flooding of rivers due to excessive amounts of rain. The ocean surges and big waves will also cause flooding to Hawaii homes on all the islands. When purchasing a property in Hawaii, it is important to ask about previous flooding history and the flood zone designation for the property.

When was the last hurricane that made landfall in Hawaii? Hurricane Iniki in 1992 caused significant damage to Kauai houses and six people died. There have been many hurricanes that have decreased to tropical storms or depressions that have caused damage to Hawaii properties over the years. Almost every year, residents in Hawaii will experience hurricane watches or warnings, so hurricanes are a real threat to Hawaii homeowners.

While natural disasters could be a major pitfall of owning property in Hawaii, the majority of homeowners thankfully have never experienced these extreme devastations. In addition, often hurricane and flood insurance are required in addition to homeowners insurance if you purchase a home with a mortgage, offering a little more peace of mind if disaster strikes.

Have you been able to stomach reading all the pitfalls of owning property in Hawaii? Do you still want to own property in Hawaii? While there are a number of cons to consider about Hawaiian homeownership, for many people the pros of owning property in paradise outweigh the cons.