Real Estate Trends and Terms Associated with the Hawaiian Islands.

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You have been coming to the islands for some time now, and you love it.  Every time you go, you dream of being able to be there even more, perhaps all the time. The inevitable thought occurs: why not get a house in Hawaii? The idea is grand. However, buying property in paradise can be a bit tricky. So, we wanted to share some real estate trends and terms associated with the Hawaiian Islands.


Location:  Which of the islands would you like to make home?  Would you like to live in the city or the country?  What kind of view do you want?  What type of climate? These types of questions might seem very common, but they play majorly into any decision anyone might make on where to live in the Hawaiian Islands. 


Just like renting a hotel, ocean front property will cost you more. Climate is also important.  Consider this:  living on the east side of the Big Island will have you living in a green, tropical paradise. This is the side that gets most of the rain.  It would also be very humid. Living on the leeward side of the Big Island would have you in an area that is very dry, almost desert like.  On a different note, you would want to know if your property was in the line of any lava flows, earthquake faults, etc.


Living in rural Hawaii can also have some challenges. You get the seclusion, but you might also have to travel 20 miles to a grocery store, or 40 miles to a medical facility. Depending on your definition of “country,” you have to research this quite a bit.


Cost:  Hawaii is not the cheapest place in the world to live, but with planning, it can be done.  That is why most Hawaiians have two jobs. Consider the following information on median prices for homes in Hawaii:


  • The Single Family Home Resale Price average  was $570,000, down 6.6 % from the 4th quarter of 2008, and 14.7% from the 1st quarter of 2008.
  • The Condominium Resales average price was $300,000, down 4.9% from the 4th quarter of 2008 and 16% from the 1st quarter of 2008.[1]


One of the big trends in Hawaiian real estate right now is buying pre-foreclosure properties in a real estate short sale transaction. Noted real estate investment expert David Oswald defines a short sale as “a house sale that takes place before foreclosure is completed, and thus it avoids the property going into full foreclosure. The reason it is called a “short sale” is because the money paid for the house is short of the amount that is owed on the mortgage.[2] As it is in almost all places on the mainland, short sales are hot right now. Many Hawaiian banks are willing to work with potential short sale buyers. It could save you a lot of money. You will, though, need the help of a competent short sale expert, who knows realty law in Hawaii.


Buying a “leasehold” property can also save you a lot of money.  Most people are familiar with fee simple real estate purchases.  A fee simple transaction, put simply, means you own the buildings and the land.  In a leasehold transaction, you will own the buildings, but not own the land. From the times of the great  Mahele of 1859, when Hawaiian land was divided and sold for the first time, lease hold transactions have been very popular in Hawaii.  This type of sale can save you money, because many people want to own the land and the buildings. Hence, these types of sales in Hawaii can go much cheaper.  There are many long term leases that will be coming due in Hawaii soon. Reversions of the land to the original owners will take place, and there is no guarantee that the leases will be renewed. Depending upon the deal made, the buildings and property could go back the land owner.  So, you have to consider these things, if you look for a good deal in leasehold property.


Construction: You may also want to pay attention to how houses are built in Hawaii. Many homes in Hawaii are not built on slab and footings, like they typically are on the mainland.  Many are built on “post and pier.”  Put simply, the houses are placed higher in the air on a stilt like structure. Traditionally, this style home can be very cool, making use of winds to help cool the home. The downturn is if a hurricane ever hit. These types of homes can be easily damaged by heavy winds.


Some Other Terms to Know:

Hawaii State Land Court versus Regular System Recordings.  Depending on the property deal in Hawaii, you could have to go to court to have your title searched.  Currently, Land Court cases in Hawaii can take as long a few years to get done, as the Court is approx. two years behind.  This court has exclusive jurisdiction in the Hawaii State Judiciary over cases involving land titles. The land court certifies land ownership by tracing each transaction back to the monarchy. It is laborious, to say the least.

There is some current legislation in place that would take time share recordings out of Land Court[3], which would speed the process up. However, this has not been placed into law yet.  Be prepared to address the issue of titling land. Getting and submitting real estate recording documents can also be a laborious process. Currently, all real estate recording documents in Hawaii must be carried or mailed to the Bureau of Conveyances in Honolulu, where they are scanned and microfilmed.

Hawaii also has  shoreline issues and two-tiered zoning regulations with the state and counties. Laws can effect how far back real property must be set from the seashore.. There could also be issues with the publics right to access the shoreline Additional land created by lava could also revert to State ownership. Hawaii real estate can be complicated!


Ahupua’a is also a term you need to know, because it involves a land division running from mountains to the sea. It is a very traditional unit of land in the Hawaiian Islands, that allowed occupants access to resources from the forests and the sea. Though most of these ahupua’as were divided up years ago, they can still effect legal definitions of property.  The ahupua’a of Kea’au is an example. Some of the sale of land by the Shipman family uses the old boundaries.


The best way to know the real estate trends and terms of the Hawaiian Island is to seek the help of a real estate professional from the Island.  There advise could save you a lot of time and energy.  Here’s to you being able to say, “E Komo Mai.” (Welcome to our home.)




[1] 2009 First Quarter Residential Resale Statistics, Honolulu Board of Realtors.

[2] Oswald, David. “What Is A Real Estate Short Sale?”: New Jersey, The Diamond Blog., Jan. 30, 2009. Used with permission of the author.

[3] Senate Bill 1352.