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We took a trip to Oahu last year. We've taken a few trips to Hawaii. I think what really took me by surprise was just how expensive it is there. I'm used to overpriced real estate in the Bay Area, but some of the houses we saw for sale in Oahu put our prices to shame.

What was weird is that you'd see some small, unassuming, almost working class looking house with a couple of old cars out front. Basically no signs that there was any wealth per-say. But the house would be like 2 million bucks! I'm familiar with this sort of thing since you sort of see the same in Silicon Valley. But in the case of Hawaii it was really hard to tell what the price would be. I figured it was expensive there but its on a totally different level of expensive.

I love Hawaii. Its beautiful, laid back... its paradise. But good god its pricey.

Yes, pricey indeed. There are a lot of condos up here and surprisingly I'm seeing some for for under $400,000 even on the north shore. Then there's the two acre property with a modest home on Hanalei Bay for $24 Million!

My wife and I have been on that island before. We were staying on the north shore too, got caught by a flood and were stuck in the town of Hanalei for several days.

There isn't much to own there, it's purely a vacation place. You can't actually own it, you can simply rent it for a very long time. Occasional visits at least to us aren't worth paying a lot for.

Do they still have the Smith family Luau and wild chickens running around? I remember that being a lot of fun.

I haven't looked in to the Luau scene, but, there are plenty of chickens every where!

There were tons of wild chickens when we were there. We went to the Big Island the first time. I feel like the Big Island is way more chill and laid back. A little more rural too. From what recall it also wasn't as expensive. That said- if one were to move to hawaii you'd probably better have money already because there doesn't seem to be a lot of industry other than the tourism biz.

I work with quite a few people from Hawaii and what's interesting is that almost all of them do not really like it there. They said it gets boring really fast because there isn't many places to go. The biggest island is about 50 miles across. They say people that aren't from there who move there get "Rock sickness" meaning they get claustrophobic. That sounds stupid but then I think of the fact that we ourselves live in what many consider to be "Paradise" as well and in fact I can walk to the ocean where we live in 5 minutes. Yet I haven't been in years. When I first moved to Cali it amazed me that it was 60 degrees in January and that there were crazy tropical looking trees. Now I could really care less. I suppose its the same in Hawaii.

That said... if I was a college grad again I think I would spend a year or two bumming around Hawaii.

PasadenaNative says

I haven’t looked in to the Luau scene, but, there are plenty of chickens every where!

Yes, the persistent explanation is that they got released from their pens during Hurricane Iniki and took over the island.

edvard2 says

I feel like the Big Island is way more chill and laid back. A little more rural too. From what recall it also wasn’t as expensive.

Expensive is relative and depends on distribution. You can definitely live "out in the boonies" on the Big Island, but living on any island like that where many of your goods have to be shipped long distance can be expensive.

PasadenaNative says

I cannot believe how many houses are for sale up here!

If you've been watching the statistics, prices have been dropping precipitously. Vacation homes have certainly felt the pain due to de-leveraging and lower availability of loans.

PasadenaNative says

I haven’t looked in to the Luau scene, but, there are plenty of chickens every where!

If you get some time check out Smith Family Luau, I remember that one being a lot of fun and being cheaper too. The other Luau's weren't that good, too commercial.

Yeah, I would be bored stiff after a while. A week is enough for me. That's why I like living in SoCal, so much to do.

I'll second the recommendation for Smith Family Luau. That was nice. We stayed in Poipu last summer next the Beach House Restaurant. The waiter there didn't pronounce Chalone correctly. It was kind of funny because all the Hawaiian words that end in e are pronounced the same way.

I also agree that islands are too small for permanent living. My philosophy on vacation homes is to just rent someone else's for a week. Easier to see more of the world that way.

Cheers!

...and right off the Kuhio highway is exactly where you don't want to be... especially after you just crossed the bloody pacific to get there! But go into Napali Properties in the center of town and see Jane -- she's the best. And have her show you things that aren't right there on the main road.

Jeez, I'm not looking to buy anything, just commenting on the stuff I'm seeing up here. Hell, I can't even afford a house in my home town let alone Kauai :-D

I love Hawaii too. A lot of "outside" money (second home owners with lots of money to burn) helps keep prices at a very high price/ave. income ration.

I also remember being on the West coast of the island, this was in mid December. There is a giant canyon on that side of the island. And I remember the mist taking over so much that we couldn't see 10 feet in front of us.

It was a very adventurous experience, also back then there was no GPS so little adventures were just that bit more interesting to discover. So if you ever go back there, check it out in December, the rainy season changes the island quite a bit.

repo4sale says

Oh, and I bought 9,000 acres, sold 8,000 acres from 1999 to 2008, then bought another 5000 acres in the last 2 years. Total transactions about 23,000 acres total. That’s the size of OAHU! Well, almost!!!!
100-200%/Year California Land TIC 1031 or cash in early 6%/yr prorated $100kMi

Are you a billionare troll by any chance?

Haha. You may seriously consider doing RE transaction in Mexico, if you are done with so many transactions in USA. LOL.

Boyfriend and I are heading home today. It's been an amazing week, but it's time to come home. I'm getting a bit stir crazy after a week, lol!

I was offered a job in Hawaii. The company said they would only hire single people. The reason: Married couples only last a year. Then they get Island Fever, are bored, and are thousands of miles away from family and friends.
Fun place for a single person, for a while. But not a good place for careers, for raisnig a family, or buying a house. Oahu is crowded, noisy, bad traffic, and lots of crime.

So so true! I've been in Hawaii all month (month long vacation in Hawaii with the family). We are in Kauai now. We rented an ocean front pad literally 40 feet from the ocean in Poipu.

We happened to drive to Tunnels Beach past Hanalei today. Funny reading your post as I noticed the same thing! Almost every other house has a for sale sign on it. There is a 2 block stretch where I swear ALL of the homes have a for sale sign on it.

Hawaii is great to vacation in but I'd NEVER live here full-time. Lots of people got totally crushed with real estate here. We rented a gorgeous property on the Big Island on the Kohala Coast and that property has lost about $250,000 in a few short years. This property we are renting in Poipu also has lost hundreds of thousands of dollars in a few short years.

Plus it doesn't make sense just as an investment as you can make better returns elsewhere. I guess unless you're using it a ton for yourself really it seems silly to buy here. And even then, I'd just rent instead.

bubblesburst says

Plus it doesn’t make sense just as an investment as you can make better returns elsewhere. I guess unless you’re using it a ton for yourself really it seems silly to buy here. And even then, I’d just rent instead.

This is almost always the case for vacation homes. Unless you use the vacation home all the time, it generally doesn't make sense unless you think of it as pure consumption, rather than investment.

I considered a vacation home somewhere we go at least 8-10 times/year (drivable weekend trip). The housing prices have dropped by at least 40% in many cases. However, if you do the math, it would still be cheaper for us to stay in the most expensive hotel in the area each trip than to buy the vacation home. In addition, the hotel would be much closer to our vacation activities than the vacation home -- we could walk in many cases.

corntrollio says

This is almost always the case for vacation homes. Unless you use the vacation home all the time, it generally doesn’t make sense unless you think of it as pure consumption, rather than investment.

I don't generally view real estate as an investment anyway- seeing as how the stock market will beat the crap out of it anyday, which is something I've mentioned on this site over and over again.

That said... My mother in law owned a vacation rental off the South Carolina coast for years. She bought it back when the area was very rural and remote. They never put any money into it and built it cheap because the theory was that it would get blown away by a Hurricane someday anyway. The house had nevere been updated. Fast-forward 30 years and the area is now fully loaded up with vacation homes- mostly owned by out-of-staters. She sold the thing for a TON of money... as in she is pretty much set even though she had also invested in stocks for the whole time too. She sold for almost 20X's what she paid and that even after it took a massive hit.

I'm not sure if you can do that now. Almost every square inch of anything near any water is now grossly overpriced. There's no such thing as a vacation area that isn't expensive and what's more, there's no way you could even come close to breaking even with it being rented. My Mother in law just broke even and that was without insurance or serious maintenance.

As far as living in Hawaii full-time and not getting sick of it, well I grew up in a very small rural town in the South. You had to drive 45 minutes to get to somewhere that had major grocery stores and shopping malls. As such I grew up not really going anywhere except to the beach on vacations every summer. On the other hand my Wife traveled a lot when she was a child. I would be perfectly fine living in Hawaii for years on end because to me the area felt like one small town. My Wife on the other hand would probably hate it after a few weeks.