Top 5 Best Real Estate Investment Markets in Hawaii

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By Ben Mizes Updated January 4, 2023


The Hawaii real estate market is in a state of stagnation. With properties growing by just 2.6% last year, and forecasted levels of 1.7% over the next 12 months, the housing market is looking bleak for investors. However, certain regions still make a worthy investment choice.

Top 5 Best Real Estate Investment Markets in Hawaii

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If you’re looking to purchase property as an investment vehicle, then it is important that you assess the strengths and weaknesses of each housing market on a region-by-region basis.

While a particular state might be going through a slump in demand, certain regions within the state might actually be performing well. This could be for a number of reasons, such as inventory levels, demand from buyers, or median property prices.

If you’ve been thinking about investing in Hawaii, we've listed five markets that are a good starting point, and offer tips on how to find profitable deals.

1. Waikiki

Although homes in Waikiki lost an average value of 2.8% last year, forecasts over the next 12 months put the region at a smaller loss of 0.6%. This is the case across much of Hawaii, which is currently going through a slump in property values. The good thing about Waikiki is that median property prices currently average just $414,200, which is low for Hawaii.

This makes Waikiki properties close to $200,000 cheaper than the state average. These prices will be attractive to both low-income and first-time buyers, which is why Waikiki makes our list.

Median household incomes are also on the rise in Waikiki, with a 4.51% increase to $59,432 in comparison to last year.

Looking to invest in real estate? You need a realtor who specializes in investment properties.

The first step in your real estate investing journey is to find a top local realtor with experience helping real estate investors find great deals. The right agent can help you find the best property for your goals and budget — and craft a winning offer so you can stop looking at houses on Zillow and start building wealth.

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2. Pearl City

Pearl City median property prices, at $733,300, are more expensive than the state average. However, properties grew by 3.2% last year, with the next 12 months forecast to grow by 0.2%.

Although these figures are rather uninspiring, you need to remember that many Hawaii regions are not expected to grow at all. Pearl City is also home to one of the largest median household incomes in the state. At $91,122, this reflects the higher than average property prices.

We should also note that only 2.9% of homes are currently in negative equity in Pearl City. In comparison to the state and national averages of 4.7% and 8.2% respectively, this is a further plus point.

3. Hilo

Arguably one of the best areas in Hawaii for a real estate investment is that of Hilo. With a median property value of just $332,500, Hilo is one of the cheapest areas to buy property in Hawaii. This makes it ideal for low-income and first-time buyers looking for a more affordable purchase.

More importantly, the Hilo area experienced growth of 4.9% last year. Growth is forecast at 3.9% over the next 12 months. This means that Hilo is expected to outperform the wider state of Hawaii. As noted earlier, much of Hawaii is not experiencing any growth at all, so Hilo makes a noteworthy investment choice.

Median household incomes have also grown in Hilo, up 4.56% in the last year. This could go in your favor if you are looking to rent the property out.

4. Kahului

While Hilo outperformed growth levels on a state-wide basis last year, Kahului outpaced the national average. With a 7.2% growth in median property prices, Kahului is one of the best areas in Hawaii for appreciation growth.

Next year properties are expected to grow by 4.3%, which just about out-performs the U.S. average.

With median property prices at $642,500, prices are slightly more expensive than the state average. However, median household incomes grew by 7.38% last year, which broadly matches appreciation levels in the same period.

5. Urban Honolulu Metro

Although median property values in Urban Honolulu Metro grew by just 1.4% last year, and are expected to lose 0.3% in value over the next 12 months, the area is potentially the best location for rental yields.

The median rent price in Urban Honolulu Metro is currently $2,300. Urban Honolulu is also displaying signs of a strong job market. With a 2.43% jump in employee numbers and a 6.2% growth in median household income, this is extremely beneficial for the rental market.

The median listing price per square foot amounts to $570 in Urban Honolulu, which is higher than the state average of $526, but not by much.

How to find Hawaii investment properties

The best deals in Hawaii are usually found on homes with motivated sellers, and homes that need extensive repairs or major cosmetic updating.

Types of homes that make for good flips or rentals in Hawaii often include foreclosures, pre-forecloses, short-sales, and abandoned or neglected properties. Here's how to find them.

1. Use real estate investment software

One of the biggest challenges of flipping homes or finding rental properties in Hawaii is finding great deals (homes are priced really high!). But the DealMachine app is one tool that can really help you.

DealMachine's real estate software helps Hawaii investors find and research distressed homes (think: pre-foreclosures, foreclosures, short sales, etc), and get in touch with owners fast via batch skip tracing and direct mail campaigns.

DealMachine's driving for dollars app is fast and easy to use. When you're driving around town and spot a home that could be a great deal, you can send the owner direct mail through the app for huge time savings (no post office visits required).

Download the DealMachine app to find Hawaii properties as you drive. DealMachine offers a 7-day free trial and $15 in free credits that can be used towards marketing (like sending out direct mail to homeowners).

2. Partner with an investor-friendly realtor

Partnering with an investor-friendly realtor is the best way to ensure a favorable, easy home purchase.

Agents have expertise in Hawaii's variety of markets, understand real estate laws and practices specific to the state, and can provide access to off-market properties you simply can't find elsewhere.

Clever's real estate agents can guide you through Hawaii's real estate market and make your house hunting journey a breeze. As a bonus, buyers can get cash back on their home's purchase price after closing.

Real estate investments in Hawaii: The verdict

Hawaii as a state is currently growing at a much slower pace in comparison to the U.S. average. In fact, properties in several Hawaii regions are expected to lose value over the next 12 months, which is concerning.

However, certain regions such as Kahului and Hilo are displaying strong growth levels, and are expected to continue this trend over the course of the next year.

Ultimately, obtaining the services of an experienced real estate agent based in the Hawaii area is highly recommended. They'll be able to identify potential Hawaii hot-spots that represent noteworthy real estate investments. They'll also be able to provide advice on the best way to break into the Hawaii marketplace.

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Enter your zip code to request hand-picked agent matches in minutes. Compare your options until you find the perfect fit, or walk away with no obligation. Try Clever's free service today!

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