There has always been a great demand for Hawaii homes among Americans since many mainlanders wish to retire, invest or simply live on the exotic island. But interest grew exponentially this year, according to local real estate experts, with entire crowds of people ready to buy properties without ever even seeing them.
Since the pandemic began, there has been a surge in requests from U.S. mainlanders looking to move to Hawaii, with local real estate professionals saying they’ve been receiving multiple inquiries per day from interested buyers. Agent Catherine Pennell, from KW Kauai, stated:
“I think people are saying, ‘Life is short.’ It’s a lot of talk because they’re not here yet and they can’t get here yet, but I’ve done more sight-unseen sales than I’ve ever done during the pandemic: three in the last three months.”
With the general unrest and the mainland’s protests being the primary reasons people have been looking to relocate these past few months, the wildfire season has only added to the increased demand in Hawaii real estate. As Julie Peters, an agent with Island Boutique Realty on the Big Island puts it:
“A lot of people that were already looking toward retirement here sped it up, or people found out they could work from home. We got a rush of that and then the West Coast fires happened. The last five closings I did were sight-unseen. I had rarely done that before.”
Peters said that while demand from Washington and Oregon has been strong, many buyers this year originated from the Bay Area. According to Title Guaranty, California residents bought $587.6 million worth of property in Hawaii in the first half of 2020 – this makes up a whopping 41% of the total U.S. sales which took place between January and June.
Tyler Hinderer, an agent handling real estate on Oahu, confirms that he’s had far more West Coast buyers than ever before. And while extremely detailed virtual tours would have been quite an odd request merely a year ago, now they’re part of a typical workday:
“I just sold a very expensive house to a guy from San Francisco who can now telework, and he knew nothing about the area. It’s amazing that he was comfortable doing that.”
Hinderer also noted that cash offers have become more common and that buyers are much more inclined to go over the asking price:
“I’ve had a number of offers that we lost because [the other buyer] had cash. I just wrote an offer for a client and we went $20,000 over and we were one of 21 offers. You usually have at or above asking on properties, but this is a whole other level. Instead of a couple thousand dollars over, it’s now 15 or 20 or even 30. It almost makes no sense.”
Too Many Condos, Too Few Houses
But not all properties are in high demand in Hawaii. For instance, real estate in Maui is experiencing the same scenario seen in mainland cities – there is an excessive supply of condominiums on the market.
According to the Realtors Association of Maui, new condo listings were up 97% in August 2020 compared to the same month a year ago. These condominiums are mostly part of areas zoned for short-term vacation rentals (like Airbnbs), which have unfortunately not earned any income in the previous months. The island of Kauai is showing a similar pattern.
Single-family homes, on the other hand, are being purchased at a much faster rate than usual. Info from the Realtors Association reveals that the total inventory of single-family homes for sale in Maui was down by 25% in August 2020 compared to a year ago.
Redfin data confirms that there are fewer houses for sale on the Hawaiian Islands, with active listings decreasing by an average of 15.38% between April and August, relative to the same timeframe in 2019. The stats refer to real estate in Oahu, the Big Island, Maui and Kauai, with the latter seeing the lowest inventory of the four islands, down 19.81%. Homes in Honolulu County declined by 18.51% between April and August on a year-over-year basis, while the decrease was somewhat lighter in Maui County, at 8.8%.