REAL ES­TATE IN HAWAI‘I

Lei - - Love - TEXT BY John Vavricka

Whether it’s a condo on Waikiki Beach or a re­gal home on Hawai‘i Is­land’s Ko­hala coast, Hawai‘i has a vast ar­ray of real es­tate for sale. If you’re look­ing for a va­ca­tion home or have plans to re­lo­cate, step one is to un­der­stand all that Hawai‘i has to of­fer.

CLI­MATE AND WEATHER

Let’s face it, with­out good weather, Hawai‘i wouldn’t be par­adise. Still, there are plenty of cli­mates to con­tend with in the is­lands, and each of the four largest is­lands con­tains a va­ri­ety of unique ter­rain. The east-fac­ing coast of each is­land (known as the wind­ward side) is typ­i­cally char­ac­ter­ized by cooler weather and more rain­fall. The west-fac­ing coast (lee­ward side) is usu­ally drier and hot­ter, with Hawai‘i Is­land’s lee­ward coast the warm­est and dri­est area in the state. Kaua‘i is a bit of an ex­cep­tion: The wettest place on that is­land is in the cen­ter, in the moun­tains. El­e­va­tion also plays a big role in the mi­cro­cli­mate of a par­tic­u­lar lo­ca­tion. Maui and Hawai‘i Is­land have the most di­ver­sity in hab­it­able el­e­va­tion. On O‘ahu and Kaua‘i, mil­len­nia of rain and weather have eroded tall, grad­u­ally slop­ing vol­ca­noes into shorter, steeper moun­tains and canyons, re­sult­ing in the ma­jor­ity of hous­ing op­tions at lower el­e­va­tions.

PRICE

Real es­tate in Hawai‘i can range from $5,000 for an un­de­vel­oped lot in Puna on Hawai‘i Is­land to up­wards of $30 mil­lion dol­lars for an es­tate on O‘ahu’s Gold Coast. While there are many op­tions in be­tween, gen­er­ally, real es­tate in Hawai‘i is ex­pen­sive when com­pared to oth­ers ar­eas of the United States. Ac­cord­ing to a re­cent study by the Univer­sity of Hawai‘i Eco­nomic Re­search Or­ga­ni­za­tion, the me­dian price of a sin­gle-fam­ily home on O‘ahu was $647,000 in 2013 and is ex­pected to rise to nearly $775,000 by 2015. O‘ahu con­dos are pre­dicted to fol­low a sim­i­lar trend, with prices in­creas­ing from a me­dian of about $335,000 in 2013 to $376,000 in 2015. The best real-es­tate val­ues avail­able are on Hawai‘i Is­land, where the me­dian price of prop­er­ties cur­rently listed for sale is $330,000.

LAND TEN­URE

While un­com­mon else­where in the United States, Hawai‘i has a sub­stan­tial num­ber of prop­er­ties that are held as lease­hold rather than fee-sim­ple. Typ­i­cally, this means that while the cur­rent owner holds ti­tle to the im­prove­ments on the prop­erty, the land un­der­neath is rented un­der a long-term lease. When search­ing for real es­tate in Hawai‘i, it is im­por­tant to un­der­stand this dif­fer­ence and how it af­fects price and value. Fee-sim­ple prop­er­ties will un­doubt­edly in­crease in value over time, while lease­hold prop­er­ties typ­i­cally lose value as the lease’s end date draws nearer. If you do find a lease­hold prop­erty that is of in­ter­est, ask your agent to look into whether the fee is avail­able for sale—pur­chas­ing the fee along with the im­prove­ments will re­sult in your-fee sim­ple own­er­ship of the en­tire prop­erty.

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