For many millennials in Hawaii, owning a home feels more like a distant dream than a reachable goal.
This huge price gap means many young buyers simply cannot afford a standalone house as their first home.
Instead, condominiums and townhomes have often been the starter homes for millennials.
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These options offer a foothold into ownership at a relatively lower cost.
In some cases, multiple generations of a family pool their resources to buy a home together.
Hawaii actually leads the nation in multi-generational households (around 89% of households).
Market Dynamics: Condos vs.
Houses
During the late 2010s, condos often outsold single-family homes in number because of these affordability dynamics.
In 2018 and 2019, condo sales were very robust statewide they even outnumbered sales of single-family houses.
However, by 20222023 the situation flipped again.
Many shoppers were priced back out into the condo market in 20222023, renewing demand for condos.
Local millennials are usually buying homes as their primary residence a place to live and settle down in Hawaii.
Many have grown up in the islands and want to stay near family if possible.
By 2021, the out-of-state share grew locals made 76% of purchases and outsiders made 24%.
These out-of-state buyers often come with bigger budgets, and they tend to snap up high-priced properties.
Pandemic Effects on Buyer Demographics
The COVID-19 period brought some temporary shifts.
Travel restrictions in 2020 meant far fewer tourists and foreign buyers could come to Hawaii.
International buyers (like those from Japan) dropped sharply in 2020, which briefly reduced some competition.
But as soon as pandemic rules eased, mainland interest surged.
Real estate agents in late 2020 described a fever pitch of demand from remote buyers.
These newcomers, often with high-paying tech or finance jobs, started buying up homes sight-unseen via video calls.
Competition Between Local and Outside Buyers
The influx of outside money creates extra competition for local millennials.
State analysts have noted that out-of-state and investor purchases have tightened the inventory available to local residents.
Oahu has the majority of the states population and jobs.
It also has the highest housing prices in general.
Neighbor Islands (Maui, Kauai, Big Island)
The other islands have seen different trends.
Maui and Kauai are smaller markets but very desirable for second-home buyers and retirees.
Many homes get snapped up as vacation properties.
Maui County actually experienced some of the fastest price appreciation in the state during this period.
Urban vs.
Rural Trends
Even within the same island, theres a split between urban and rural trends.
This kind of inter-island move became more feasible with remote work as well.
In 2018, a typical 30-year fixed mortgage rate was around 4.5%.
By 2019 it had dipped to about 3.9%, helping buyers a little.
Many millennials took advantage of these rock-bottom rates.
However, the tide turned sharply after 2021.
By mid to late 2022, interest rates were climbing fast as the economy shifted.
This doubling of interest rates within two years had a huge impact on affordability.
Millennials, often early in their careers, tend to have below-median incomes, making that gap even larger.
The rapid home price appreciation from 2018 to 2022 made the affordability gap wider.
Statewide, median home prices jumped roughly 35% between 2019 and 2022.
Local incomes did not increase at anywhere near this pace.
Living rent-free with family for a few years enabled some millennials to accumulate the hefty down payments needed.
Several counties have their own assistance for down payments or closing costs.
Affordable Housing Initiatives
Local government has also tried to increase the supply of affordable homes.
These might include subsidized rentals, but also affordable for-sale homes.
In reality, housing production has been well below that.
Shifting Priorities and Inventory Crunch
The pandemic also shifted many peoples priorities.
This motivated some renters to accelerate their plans to buy a home with more room.
The flip side of surging demand was that housing inventory in Hawaii hit very low levels.
People were hesitant to list homes for sale during the pandemic.
So there were fewer listings, but more buyers.
The result: intense bidding wars in 2021.
Homes, especially on Oahu, would get dozens of offers and often sell above asking price.
Government stimulus (like enhanced unemployment and direct payments) helped some stay afloat and even save a bit.
In essence, COVID-19 was a catalyst that both helped and hindered millennial homebuyers.
It also allowed new flexibility in where to live.
In Hawaii, the share is much lower.
The majority were still renting.
Thats nearly two-thirds, which was almost double the national average of 35% for that age group.
By 2020, the trend of staying at home likely persisted or even grew with the pandemic.
Conversely, 20222023 likely stalled some of that progress due to high rates and prices.
The overriding issue is housing affordability.
Those who havent are either still saving, or they might have made the difficult choice to buy elsewhere.
