Steady Second-Home Market Expands Hawaii’s Real Estate Boom

In the already diverse real estate landscape, there is perhaps none in the United States of a market more unique than Hawaii.

Fueled by wealthy buyers from outside the state, demand for second home properties is higher than in any other part of the country. According to Hawaii’s chief economist, About a quarter of Hawaii’s homes were purchased by non-residents.

This continued interest in Hawaii’s real estate by mainland and foreign buyers has, in part, propelled the luxury sector to new heights. As per the latest, year-on-year high-end sales across the state have exceeded last year’s Hawaii Luxury Market Report from leading brokerages air life,

As a result, many Hawaii real estate agents are experiencing unprecedented sales volume, overtaking much larger markets and placing them among the top real estate agents in the country. One such agent Neil NormanRegularly ranks as the top-producing agent in Hawaii and was recently named #29 on Real Trends the Thousand, a national ranking of the top 250 individual agents in the US based on sales volume.

Having relocated to Hawaii as a surfer more than 25 years ago, Norman has since become one of the most sought-after agents in the state, specializing in luxury properties on the island of Kauai. As a director at Hawaii Life, Norman and his team have generated more than $3 billion in sales, including over $385 million in sales volume in 2021. Recent transactions of note include Carlos Santana’s vacation home sold for $11.9 million,

In my continuing coverage of the global real estate landscape, I spoke with a Kauai expert about his successes and how he feels the market on “Garden Isle” is changing. His comments have been edited for clarity.

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How has the market changed in Kauai over the years?

Luckily, and unfortunately, Kauai’s northern shore has been discovered by shoppers, so everything is booming. It is such a small rural area and there is a lot of scarcity but high demand. There was more tourism here than the pandemic and people learned they no longer had to work and could live in the place they’ve always dreamed of living in. There’s a lot of transfer between places like Aspen, Jackson Hole or Telluride, where it’s the same idea that, instead of snow, we have waterfalls.

Is there any concern that the rise in popularity will later cause the area to lose its charm?

The two-lane road has strict zoning and building regulations as well as the only way in and out of it, so it’s pretty safe, and I don’t think that will change. The reason people flock to Kauai vs Maui is because it’s more laid-back. There are really no multifamily condos, and almost no hotels – it’s just a raw, natural beauty here.

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How is Hawaii’s luxury market different from those of the states?

There is very little speculation in our market. People do not come here and do not build houses to sell. A lot of people come here and they can’t find a beautiful new home—in the 35 years of doing this, I’ve only sold a few new homes. A lot of markets are buying a vacant piece of land and building something that fits the buyer perfectly.

For the most part, I’m in another home market. So, I sell people things they don’t need, I sell people what they want. In markets like California, there are often necessities associated with buying a home, such as living near where you work, and necessities can mean more money. For a beach community like Malibu, if you want a few acres on the water or near the water, that’s going to be $50 to $100 million. Now, to get something like this here, you have to pay half, if not a quarter less and what you get will be amazing.

You have repeatedly been the top-producing broker in Hawaii. What do you attribute to your success?

I feel like I have a skill set that really works for what I do. I have an eye for site planning or refurbishment – I’ve been a builder myself – and I also love talking. There are projects that have complex sites and entitlement issues and I have long experience navigating them and negotiating for someone to find their dream places, and I love that I get to do that.

I also have an amazing staff. We work very hard to find our customers the right place and that hard work is how we keep on getting referrals.

Any spot recommendations for surfing?

Needless to say, Kauai is a world-class surfing spot—but Fiji, Indonesia, Central America, and South America will always hold a special place in my heart.

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