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Buying a Home in Hawaii

The Hawaiian Islands conjure images of romance, tropical beauty, volcanic peaks, and the spirit of aloha. Nowhere on Earth is like it. People worldwide choose Hawaii for their health, vacation, investment, or retirement. Could Hawaii be right for you? Let Marisa Piazza introduce you to this magical place.

Why should you buy a home in Hawaii?

Hawaii is so far away from the mainland. Is it a good idea to invest in such a distant place? The answer is a resounding “Yes!” for many reasons.

Hawaii offers an excellent quality of life

The average lifespan of Hawaii’s residents is 80 years old, the longest of any state in the nation. With salty breezes and temperatures in the 70s and 80s throughout the year, Hawaii beckons residents to be outdoors and engage in active living. The people are warm and friendly, focused on building community and welcoming newcomers into local life with genuine hospitality.

Buying a home in Hawaii is a lucrative investment

Home values in Hawaii are appreciating and will continue to do so as travel restrictions have been lifted and the quantity of available land for new development is scarce. Many second homeowners in Hawaii have generated significant income by renting out their vacation properties. Additionally, short term rentals allow you the income to fund your stays as well as future income property purchases.

Endless adventures await

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You will never be bored in Hawaii. From water sports such as sailing, surfing, scuba diving, and snorkeling to hiking in national parks or experiencing backcountry adventures, the energetic Hawaiian will always have something to do. For those who like a more relaxed pace, quaint towns offer art galleries and local restaurants with magnificent views. Endless beaches beckon you to walk along the shore, and winding roads less traveled reveal the secrets of untouched natural beauty.

Get to know the islands of Hawaii

Hawaii may comprise of eight islands, but only seven are inhabited, and four are well-developed and populated. You will find restaurants and businesses, towns, and community features on these four islands. Even among these four, unique and distinctive traits set them apart. Begin your search by learning which one is right for you.


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Kauai is “The Garden Isle,” aptly nicknamed for its prolific botanical gardens and natural jungles. Much of the island has not been developed, so humans are guests and stewards of Hawaii as nature intended. All forms of topography rise and fall dramatically, giving Kauai unparalleled beauty.

Big Island

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So named because it alone makes up nearly two-thirds of Hawaii’s land, America’s largest island has been shaped by five volcanoes. One of them is active. You can tour volcanoes, scuba dive with manta rays, or visit a seahorse farm. The Big Island is the place for only-in-Hawaii adventures.


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Honolulu, the capital city of Hawaii, is located in Oahu. So, too, are bases for every branch of the military. Government and military jobs bring many mainlanders to Oahu. Here you’ll find the most modern urban developments, historical places and museums, and a fine tourist experience from luxurious shopping and fine dining to gorgeous beaches and luaus.


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The second-largest of Hawaii’s islands, Maui is also a trendy tourist destination. Along with the beautiful beaches featuring many different colors of sand, visitors enjoy the varying terrain along the Road To Hana and get up close and personal with the volcano Haleakala in Haleakala National Park. This is the place for the ultimate whale-watching experience.

What to know about buying a home in Hawaii

Real estate in Hawaii is far more expensive than most of the rest of the United States, but most would agree that the prices reflect the value. Because land is limited by intentional development restrictions in some areas and a lack of buildable land in others, spaces available for new construction are also limited. This leads to an appreciation of the value of existing properties that will only grow over time as builders run out of options.

Median house prices

Average sales prices
vary widely depending on the island you buy. The most economical is the Big Island, with median sales prices of $495,000. The most expensive is Kauai, with an average of $1.65 million. Maui and Oahu had almost identical prices between the extremes — just over $1 million.

Closing costs

Just as home prices in Hawaii vary widely, so can closing costs. As a general rule of thumb, they will range between 2–5% of the price of the home. Additional fees may come from loan origination fees (especially if you use a traditional bank for your home loan) and the specialized insurance your property may require, such as protection from floods or earthquakes.

Property taxes

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If the numbers thus far have given rise to some anxiety, property taxes are, at last, good news. The property tax rate in Hawaii is 0.27%, the lowest property tax rate in America.

Requirements for buying a home in Hawaii

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Most of the unique home purchasing assistance plans are designed for native Hawaiians, but anyone moving to Hawaii can pursue all nationally available loan types.

Conventional loans

As the name implies, conventional loans are the most often utilized. They are used by those with good credit scores who can manage a sizable down payment. Under certain circumstances, the down payment can be as little as 3% of the total home cost, but 10–20% is much more common. These loans can be paid back over 10, 15, or 30 years. You’ll pay substantially more each month for a shorter-term loan, but in the end, you’ll save by paying less in interest.

FHA loans

FHA loans
help those with lower credit scores, first-time homebuyers, and lower-income families purchase homes. These loans are backed by the U.S. government, which helps encourage bankers to make those loans with confidence. With the FHA loan, you will only be expected to make a down payment of 3.5%. Those with credit scores between 500–579 can still qualify if they can afford a 10% down payment.

VA loans

The VA loan makes home ownership much more affordable for our servicemen and women, spouses, and veterans. You’ll receive the best possible interest rates, avoid private mortgage insurance, face reduced closing costs, and do not have to have a down payment.

Are you ready to learn more?

If learning about buying a home in Hawaii has stirred your sense of adventure and wanderlust, it’s time to talk with Marisa Piazza at Luxury Properties Hawaii, awarded the Best of Hawaii - West 2022 for real estate and property management. She can answer all your questions and help you begin your quest for home ownership in the Aloha State. Give her team a call today.

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