Top 5 Residential Real Estate Investment Markets in Hawaii

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By Trent Seigfried Updated May 28, 2024
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Edited by Michael Yessis

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Keaau is home to the best residential real estate investment market in Hawaii.

The 96749 zip code in Keaau presents the greatest opportunity for investors among the 176 individual real estate markets in Hawaii we evaluated. We looked at property values, population trends, and six other metrics for each market. We used that data to calculate each market's InvestScore.

Top 5 Hawaii residential real estate markets

RankCity InvestScore Affordability Property value appreciation
1Keaau1005.956.68%
2Waikoloa90.78.678.44%
3Ewa Beach87.37.233.58%
4Hilo876.648.30%
5Wailuku86.58.759.97%
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1. Keaau

We've identified the 96749 zip code in Keaau as Hawaii's best real estate investment market. Here's why.

πŸ”Ž Key data about Keaau

Data pointValueRank in state (of 176 markets)
Zip code96749N/A
InvestScore 100Highest
Typical property value $454,417[1]3rd lowest
Five-year appreciation 56.68%[2]11th highest
Household income $76,762[3]37th highest
Affordability ratio 5.93rd most affordable
Five-year population growth 4.0%[4]15th highest
Unemployment rate 3%[5]3rd lowest
Property taxes $1,219[6]6th lowest
Educational attainment 22.6%[7]40th highest
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Keaau (zip code 96749) is the best residential real estate investment market in Hawaii. It has the 11th highest property value appreciation among markets we evaluated, with a 56.68% appreciation of the typical property over the last five years.

Keaau is the 3rd most affordable market among the 176 Hawaii markets we evaluated, with an affordability ratio of 5.9.

2. Waikoloa

The 96738 zip code in Waikoloa is Hawaii's second-best residential real estate investment market.

πŸ”Ž Key data about Waikoloa

Data pointValueRank in state (of 176 markets)
Zip code96738N/A
InvestScore 90.72nd highest
Typical property value $836,826[8]14th lowest
Five-year appreciation 78.44%[9]the highest
Household income $97,083[10]21st highest
Affordability ratio 8.618th most affordable
Five-year population growth 23.1%[11]highest
Unemployment rate 9.7%[12]41th lowest
Property taxes $1,480[13]12th lowest
Educational attainment 32.3%[14]24th highest
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The 96738 zip code in Waikoloa features a typical property value of $836,826, the 14th lowest in the state.

Property values have appreciated 78.44% over the past five years, the the highest increase among evaluated markets in the state. Waikoloa homes have an affordability ratio of 8.6, the 18th most affordable in the state.

3. Ewa Beach

The 96706 zip code in Ewa Beach comes in at No. 3 in our ranking of residential real estate investment markets in Hawaii.

πŸ”Ž Key data about Ewa Beach

Data pointValueRank in state (of 176 markets)
Zip code96706N/A
InvestScore 87.33rd highest
Typical property value $850,223[15]17th lowest
Five-year appreciation 33.58%[16]27th highest
Household income $118,316[17]6th highest
Affordability ratio 7.26th most affordable
Five-year population growth 15.6%[18]3rd highest
Unemployment rate 3.5%[19]8th lowest
Property taxes $2,059[20]26th lowest
Educational attainment 29.7%[21]30th highest
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With a typical property value of $850,223, Ewa Beach's 96706 zip code features the 17th lowest property values in the state.

Ewa Beach homes have an affordability ratio of 7.2, the 6th most affordable among the markets we evaluated.

4. Hilo

The 96720 zip code in Hilo ranks No. 4 among Hawaii's residential real estate investment markets.

πŸ”Ž Key data about Hilo

Data pointValueRank in state (of 176 markets)
Zip code96720N/A
InvestScore 874th highest
Typical property value $496,726[22]6th lowest
Five-year appreciation 48.30%[23]17th highest
Household income $75,265[24]17th highest
Affordability ratio 6.65th most affordable
Five-year population growth 3.9%[25]16th highest
Unemployment rate 6.6%[26]35th lowest
Property taxes $1,086[27]3rd lowest
Educational attainment 34.1%[28]21st highest
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Property values in Hilo's 96720 zip code have seen the 17th highest increase among evaluated markets in the state, with an appreciation of 48.30% over the past five years.

Hilo's affordability ratio of 6.6 makes it the 5th most affordable among the 176 markets we evaluated.

5. Wailuku

The 96793 zip code in Wailuku rounds out our top five residential real estate investment markets in Hawaii.

πŸ”Ž Key data about Wailuku

Data pointValueRank in state (of 176 markets)
Zip code96793N/A
InvestScore 86.55th highest
Typical property value $932,554[29]23rd lowest
Five-year appreciation 59.97%[30]6th highest
Household income $107,101[31]6th highest
Affordability ratio 8.720th most affordable
Five-year population growth 2.2%[32]20th highest
Unemployment rate 4.1%[33]15th lowest
Property taxes $1,152[34]5th lowest
Educational attainment 28.4%[35]33rd highest
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Property values in Wailuku's 96793 zip code rose 59.97% over the last five years, ranking the city 6th highest among evaluated markets in Hawaii.

Wailuku homes have an affordability ratio of 8.7, the 20th most affordable among the markets we evaluated.

How we rank residential real estate markets in Hawaii

We evaluated 176 markets on eight metrics, and then assigned an InvestScore based on their weighted and combined rankings. Each market corresponds to a specific zip code in Hawaii.

What is InvestScore?

InvestScore is a score on a scale of 0 (worst in state) to 100 (best in state) that estimates the residential real estate investment potential of a given market. It takes into account a suite of key data points for each city.

  • Typical property value: This measures the typical home value in this zip code, according to the Zillow Home Value Index. It reflects the typical value for homes in the 35th to 65th percentile range, including all homes, with the numbers smoothed and seasonally adjusted. We prefer lower property values, which indicate both more room for growth and a greater ease of purchase. We assign a weight of 20% to typical property values.
  • Property value appreciation: This measures how much property values have increased in the area over the past five years, according to the Zillow Home Value Index. We prefer a higher appreciation, as it indicates better returns on housing. However, past performance isn't indicative of future results. We assign a weight of 20% to property value appreciation.
  • Median household income: This is the inflation-adjusted median household income in the zip code, according to U.S. Census American Community Survey data. We prefer a higher household income, as it indicates local residents have more income to spend on housing. We assign a weight of 10% to median household income. We assign a weight of 10% to median household income.
  • Affordability ratio: This is the ratio of the typical home value to the median household income in the area. A lower ratio is better because it means more households can afford a home, which indicates higher demand. We assign a weight of 15% to the affordability ratio.
  • Population growth: This is how much the area's population has grown over the past five years, according to U.S. Census estimates. Higher is better, as it indicates residents are moving into the area at a rapid clip. We assign a weight of 10% to population growth.
  • Unemployment rate: This is the unemployment rate in the area, according to U.S. Census data. We prefer a lower rate, as it indicates the availability of steady employment in the area, meaning residents will find it much easier to afford homes. We assign a weight of 15% to unemployment rate.
  • Property tax: This is the median real estate property tax paid in the area, according to U.S. Census estimates. We assign a weight of 10% to property tax.
  • Educational attainment: This is the percentage of residents in the area that have obtained a bachelor's degree or better, according to U.S. Census estimates. We prefer a higher rate because it indicates  local residents who have higher earning potential and thus should be able to afford homes. We assign a weight of 15% to educational attainment.

Disclaimer: The information contained in this article isn't intended as, and shall not be understood or constituted as, financial advice. The information in this article isn't a substitute for financial advice from an investment professional or real estate agent who is aware of the facts and circumstances of your financial situation or the specifics of any individual property.

Article Sources

[1] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[2] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[7] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[8] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[9] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[14] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[15] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[16] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[21] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[22] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[23] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[28] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[29] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[30] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[35] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.

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