High-earning households (earning over $500,000 annually) have played a significant role in Hawaii’s housing market from 2018 through 2023. This period saw surging home prices, especially during the pandemic-era boom, followed by shifts in market dynamics as interest rates rose. Wealthy buyers – whether local or from the mainland – have distinct preferences and impacts on Hawaii’s real estate landscape.
Luxury Market Overview (2018–2023)
Hawaii’s housing market was already expensive entering 2018, and it became even pricier by 2023. Median home prices climbed dramatically statewide, especially during 2020–2022. Before the pandemic, the median single-family home price in Hawaii was about $650,000; between 2019 and 2022, prices jumped roughly 35%, then leveled off in 2023. On Oahu, the median single-family price rose from around $790,000 in 2018 to about $1.10 million by 2022. This rapid appreciation outpaced income growth and cemented Hawaii’s status as the most expensive U.S. state for housing.
High-income buyers have been critical in sustaining sales amid these soaring prices. During the pandemic boom, affluent purchasers rushed into Hawaii real estate, driving record-breaking sales in the luxury segment. In the first three quarters of 2021, 634 homes priced over $3 million sold in Hawaii – about double the number from the same period in 2017, the previous record year. Total deal volume in Q1–Q3 2021 exceeded $3.7 billion, averaging 16 luxury homes sold per week statewide.
By 2022–2023, the overall market cooled slightly from its 2021 peak, largely due to rising interest rates and global economic headwinds. Mortgage rates jumped from under 3% in 2021 to around 7% by late 2023, dampening buying power. However, affluent buyers proved resilient. Many high-income purchasers simply circumvented high borrowing costs by paying cash or refinancing later. In Q3 2023, roughly 43% of U.S. luxury homes were bought with cash (up from ~35% a year prior), a trend likely mirrored in Hawaii’s upscale market.
What High-Income Buyers Are Purchasing
Most households earning $500K or more gravitate toward Hawaii’s “luxury” properties – typically single-family homes in prime locations, as well as high-end condos and estate properties. Common property types include spacious single-family houses with ocean views, gated community homes, luxury estates, and upscale condominiums in resort areas or Honolulu’s high-rise towers.
Since 2018, the single-family home has been the preferred property type for many affluent buyers, and that preference intensified during the pandemic. Early on (pre-2020), some high-income buyers had shown interest in luxury condos, but the pandemic triggered a shift. By 2020–2021, demand swung heavily toward single-family residences with more space and privacy. Upscale buyers who once owned urban condos sought to upsize into larger homes, driven by the desire for home offices, outdoor space, and comfortable isolation.
That said, luxury condominiums still attract a segment of $500K+ earners, particularly those looking for turnkey convenience or a pied-à-terre in Hawaii. High-rise condos in Honolulu’s Ward Village or Waikiki offer luxury amenities and proximity to city dining and culture. Some affluent older buyers have downsized from large houses into high-end condos for a more manageable lifestyle.
Price points targeted by these high earners span the luxury spectrum. On Oahu, many local high-income families purchased in the $1–3 million range for primary homes. On the Neighbor Islands and for some out-of-state buyers, the focus often shifted higher into the $3–6 million range, which accounted for about 75% of luxury sales in 2022. The ultra-luxury segment (properties above $10 million) also saw growth during this period, especially on Maui and the Big Island. These ultra-high-end purchases were typically by the super-rich including tech executives, finance leaders, and celebrities.
Location Preferences Across the Islands
Location preferences often reflect whether the home is a primary residence or a vacation/second home, as well as lifestyle desires. A clear pattern during 2018–2023 was the primacy of Oahu for high-income primary residences, versus a strong draw of the Neighbor Islands for resort living and second homes.
Oahu (Honolulu & Surrounding Areas)
Oahu remained the economic hub and thus a top choice for many affluent households making Hawaii their main home. The island led in luxury transaction volume in 2022, with the greatest number of high-end deals. Neighborhoods like Kahala, Diamond Head, Lanikai, and Portlock saw steady interest from $500K+ earners seeking prestigious single-family homes. Downtown Honolulu and Kaka’ako condos also attracted buyers who wanted an urban lifestyle.
Oahu’s appeal lies in its business opportunities, educational institutions, and medical facilities – factors important for local high earners (executives, doctors, etc.) and affluent transplants who still need city amenities. Simply put, Oahu is where many wealthy Hawaii residents live and work, and it saw robust demand for high-end homes.
Maui
Maui has long been a paradise for luxury buyers, and 2018–2023 was no exception – especially for non-resident buyers. The island’s resort communities (Wailea, Kapalua, Kaanapali, etc.) offer secluded beaches, golf, and five-star amenities that lure wealthy mainlanders and international buyers.
Maui actually led in the ultra-luxury $10M+ segment in 2022, logging more $10M+ sales (and total volume) than any other island. High-income buyers gravitated toward oceanfront estates in areas like Makena or high-end condo villas that function as turnkey vacation homes. For high-income earners living on Oahu, Maui might also be a preferred spot for a second home. However, as a primary residence, Maui is less common unless the buyer’s work is remote or they are retired, given the island’s smaller economy.
Hawaii Island (Big Island)
The Big Island rose in popularity among affluent buyers in recent years. It offers vast space and newer luxury developments, especially along the Kona-Kohala Coast. One report highlighted a 124% year-over-year jump in luxury single-family home sales on the Big Island (August 2023 vs. August 2022).
Gated resort communities like Hualalai, Mauna Lani, and Kukio saw strong demand for their large homes and lots. The Big Island also had more high-quality new construction in the luxury segment than the other islands, which appealed to buyers wanting modern features. High earners from the mainland found Big Island attractive for its relative privacy and lower density. As remote work made location more flexible, some even chose the Big Island for primary residence.
Kauai
Kauai’s real estate is smaller in scale, but it, too, drew interest from wealthy buyers, particularly for second homes. The Garden Island’s scenic north shore (Princeville, Hanalei) and sunny south shore (Poipu) host many multi-million-dollar estates and condos. Out-of-state buyers dominate many of these transactions. On Kauai, a remarkable 66% of condominium sales have been to out-of-state buyers, the highest share in Hawaii, reflecting its popularity for vacation apartments and retreats.
High-income buyers are often enchanted by Kauai’s natural beauty and exclusivity (the island has no large cities), making it ideal for those seeking a tranquil luxury getaway. However, as a primary residence choice among $500K+ earners, Kauai is rarer, due to limited high-paying jobs and remote location.
Property Size Trends: Upsizing and Downsizing
Many $500K+ households underwent lifestyle-driven housing changes during this period, leading to both upsizing and downsizing trends in different segments of the affluent population.
Upsizing for Space
The predominant trend during the pandemic years was upsizing: high earners seeking larger homes with more amenities. With remote work and stay-at-home orders, even wealthy homeowners felt the constraints of space and sought to upgrade their living environments.
Starting in 2020, a significant number of affluent buyers sold smaller properties (like condos or modest houses) and purchased larger single-family homes. The motivations included gaining a home office, a dedicated gym, bigger yards, or multi-generational living space. This was evidenced by the surge in sales of high-end single-family homes on Oahu and Maui in 2021. At one point in March 2021 on Oahu, 50 luxury properties sold in a month – the majority of them (31 out of 50) were in the $2–$3 million range, indicating well-off buyers were actively moving up to spacious homes.
Downsizing and Simplifying
A counter-trend emerged more toward 2022–2023 involving downsizing. As the initial pandemic wave subsided, a few wealthy homeowners who had upsized found they no longer needed quite so much space and chose to downsize to easier-to-manage residences.
More commonly, downsizing was seen among older affluent residents. Empty-nesters and retirees in the $500K+ income bracket sometimes sold large estates and moved into luxury condos or smaller single-family homes. For instance, an older business owner in Honolulu might trade a sprawling home in the hills for a high-end condominium with concierge services, reducing maintenance burdens.
However, any downsizing trend was overshadowed by the strong upsizing and second-home acquisition trend through most of this period. By the end of 2023, many $500K+ households either lived in substantially larger primary homes than they did in 2018 or they maintained similarly sized homes that were upgraded in quality or location.
Impact of Remote Work and Tech Money
One of the most influential factors in recent homebuying trends was the rise of remote work and the influx of technology industry wealth into Hawaii.
Remote Work Revolution
The COVID-19 pandemic proved that many high-paying jobs could be done from anywhere, and Hawaii became a dream destination for numerous remote-working millionaires. Tech sector employees and executives – from Silicon Valley firms – suddenly were free to work outside the Bay Area. Many seized the opportunity to live in paradise.
In 2020 and 2021, realtors on Oahu reported an onslaught of buyers from California’s tech hubs, often engaging in bidding wars and driving prices over asking by $100K or more. These remote workers were typically earning high six- or seven-figure salaries, allowing them to compete in Hawaii’s pricey market. They sought large, comfortable homes where they could both work and play – fueling demand for luxury single-family properties.
“Work-from-Hawaii” Trend
The pandemic created a short-term trend of wealthy individuals “riding out” the crisis in Hawaii. Some high earners essentially relocated to Hawaii to hide out during lockdowns and work from afar, leading to “a lot of sales in the $3 million range and higher.” What began as a temporary escape often turned into a permanent or semi-permanent move as people fell in love with the islands.
Real estate developers and rental managers noticed that remote professionals were not only buying homes but also snapping up long-term luxury rentals, sometimes as a trial run before purchasing. The ability to work remotely thus expanded Hawaii’s buyer pool to include rich professionals who previously had to live on the mainland.
Tech Wealth and Market Impact
Beyond just being physically able to move, high earners benefited from strong economic conditions in the early pandemic period. In 2020–2021, technology stocks and broader markets surged, and many affluent households accumulated substantial savings. Flush with cash from stock options or investment gains, tech millionaires had both the motive and means to invest in real estate.
The result was a spending spree on Hawaii luxury properties, essentially a relocation of some wealth from places like California, Washington, and New York into Hawaiian real estate. Local agents observed that some buyers purchased homes sight-unseen, paying all cash and closing in as little as two weeks – behaviors reflective of the aggressive, cash-fueled tactics one can take when money is abundant.
Local Buyers vs. Mainland and International Buyers
Local High-Income Buyers
Hawaii’s local $500K+ earners are relatively few, but they have been active in the market, often purchasing primary residences on Oahu. During 2018–2019, local affluent families were the majority of buyers in Honolulu’s luxury neighborhoods. Local buyers tend to focus on practical considerations: proximity to work (Honolulu for many), children’s schooling, and long-term community ties. However, local buyers often found themselves in competition with deep-pocketed newcomers, which posed challenges.
Mainland U.S. Buyers
Affluent mainlanders have historically loved Hawaii real estate, and that affection grew in this period. The University of Hawaii’s research arm (UHERO) found that across the state, about 23% of single-family home sales and 29% of condo sales recently have been to out-of-state buyers. This share is even higher in certain segments: on the Neighbor Islands, roughly half of all condo sales are to mainland or foreign buyers.
During 2020–2022, mainland buyers from California, Washington, and New York drove up demand significantly. They were behind much of the luxury market growth, especially as international travel was restricted. Many mainland high-income buyers in 2020–21 were essentially new Hawaii residents in the making, thanks to remote work.
International Buyers
Foreign investors and buyers have long had a presence in Hawaii. In 2018–2019, international buyers (from Canada, Asia, etc.) were involved in some luxury purchases, particularly condos in Honolulu and resort homes. However, their role diminished during 2020–2021 due to travel bans and pandemic hurdles. By 2022–2023, international purchasers began to trickle back as travel normalized, but their overall share of transactions remained modest relative to domestic buyers.
Market Tensions
The heavy involvement of mainland and foreign buyers in Hawaii’s real estate has raised concerns about housing affordability and availability for locals. Hawaii’s governor and legislators pointed out that an outsized portion of homes – especially investment properties and vacation rentals – are owned by non-residents, contributing to high prices. Some analyses suggest these outside buyers have driven home prices hundreds of thousands of dollars higher than they would be if only local incomes set the market.
This dynamic has spurred talk of policies to restrict or disincentivize outside ownership. The period 2018–2023 thus highlighted a growing divide: wealthy mainland and international buyers increasingly view Hawaii real estate as a safe haven or luxury asset, while many local families feel squeezed out of their own housing market.
Comparison: 2018–2023 vs. 2008–2017
Different Economic Cycles
The 2008–2017 era began with the Great Recession and a major housing market slump. Hawaii’s luxury real estate market in 2008–2010 slowed dramatically; prices fell from their mid-2000s highs and sales volume plummeted. As the economy recovered in the 2010s, wealthy buyers gradually returned, and by the mid-2010s Hawaii was seeing steady luxury activity again.
In contrast, 2018–2023 had no initial crash to recover from; instead it was characterized by an extraordinary boom (2020–2021) triggered by unique conditions (pandemic, remote work, low interest rates) rather than a normal economic expansion.
Buyer Demographics Shifted
In the earlier period (post-2008), international buyers played a more notable role in Hawaii’s luxury market. After the U.S. recession, foreign investors saw opportunity in relatively depressed Hawaii prices around 2010–2012 and bought second homes.
In 2018–2023, this shifted – mainland buyers took the lead and international influence diminished. The source of wealthy buyers tilted more toward domestic tech and finance sectors versus the prior decade which included more overseas investors and baby boomer retirees.
Market Velocity
Simply put, the pace of sales in 2020–2021 blew past anything seen in the prior decade. Even 2017’s record year had half the number of $3M+ sales that 2021 achieved. The earlier period had strong years, but none with the across-the-board frenzy of 2021, where properties sometimes sold sight-unseen in days. However, late 2022 and 2023 did resemble some aspects of the pre-2018 normal, with volume slowing and buyers regaining a bit more negotiation power.
Vacation Homes and Second Properties
Even when focusing on primary residences, it’s important to acknowledge that a large share of high-end transactions in Hawaii involve second homes. The period 2018–2023 saw a boom in vacation-home buying, followed by some cooling.
The pandemic sparked a vacation-home buying boom across the U.S., and Hawaii benefitted from this. The National Association of REALTORS® reported that vacation home sales jumped 16% in 2020, far outpacing the growth of primary home sales. In Hawaii, already a desirable second-home locale, this meant a wave of high-income individuals buying condos and houses purely for seasonal use or investment.
Many $500K+ earners who bought Hawaii vacation homes during this time were mainland Americans – e.g., a tech executive from Seattle buying a Maui beachfront condo, or a finance professional from New York purchasing a Big Island villa.
A lot of second-home purchases double as investment properties through vacation rental platforms. Hawaii has a robust short-term rental market, and many affluent buyers are attracted by the idea of rental income when they’re not personally using the home. By 2023, Hawaii had roughly 30,000 housing units operating as short-term rentals – about 5.5% of all housing units in the state. In Maui and Kauai counties, around 15% of the housing stock is used as short-term rentals.
One interesting dynamic in 2020–2022 was blurred lines between vacation and primary homes. Some high-income people who bought “vacation” homes ended up staying much longer (effectively making them primary homes). Conversely, a few who moved to Hawaii full-time decided after things opened up to treat their Hawaii home as a second home and return to a mainland base.
Conclusion
From 2018 to 2023, Hawaii’s housing market underwent an extraordinary period shaped by high-income buyers. These $500K+ earners – whether Hawaii-based or new arrivals from the mainland – drove much of the activity in the luxury segment, redefining records in both price and sales volume. They showed clear preferences for single-family homes in upscale areas, though also maintained a strong presence in the vacation condo market.
The data reveal a market that became increasingly dependent on outside wealth. Out-of-state buyers accounted for a large share of Hawaii’s high-end home purchases, especially on the Neighbor Islands. This infusion of affluent newcomers had dual effects – it sustained the real estate industry and boosted property values, but also intensified the affordability crisis for local residents.
For households earning over $500K, Hawaii remains an attractive place to buy homes, whether as a primary residence in paradise or a coveted second home. Remote work and tech wealth broadened the profile of who can call Hawaii home, bringing new faces into neighborhoods and pushing the luxury market to new heights.
Looking ahead, the sustainability of these trends will depend on economic conditions and policy responses. Interest rate trajectories, potential new taxes on investors, and housing development plans could all influence whether Hawaii’s real estate continues its high-end surge or cools to a gentler pace. The tug-of-war between local needs and outside demand will remain a central theme.
The 2018–2023 period will be remembered as a transformative chapter in Hawaii’s housing story – a time when wealthy homebuyers had an outsized impact on the market, reshaping the islands’ housing landscape in the process.
References
- The Hawai’i Housing Factbook – UHERO (University of Hawaii)
- Oahu Historical Data – Honolulu Board of REALTORS®
- Hawaii’s ultra-luxury real estate market smashes records, as sales soar 600% – Maggie Huang-Hawaii Top Realtor
- Hawaii’s Luxury Real Estate Market Reports Record Sales – Pro Builder
- Luxury Home Prices Jump as Affluent Buyers Dodge High Rates – Redfin
- Silicon Valley’s remote workers are adding fuel to Hawaii’s hot real estate market – Hawaii News Now
- Remote workers helping to fuel luxury real estate sales on Oahu, experts say – Hawaii News Now
- Homes Buyers Have Descended on Hawaii Since the Pandemic—And They’re Staying – Mansion Global
- Corcoran Pacific’s Hawaii Luxury Market Report and Review: September 2023 – Hawaii Business Magazine
- Vacation Home Counties – National Association of REALTORS®
- Low-Income Americans Have Lost the Homebuying Progress They Made During the Pandemic – Redfin
- 2023 Has Been The Least Affordable Year for Homebuying on Record – Redfin
- Hawaii Housing On The Verge Of Getting A Lot More Expensive – Honolulu Civil Beat
- The Most Overvalued U.S. Housing Markets – Real Estate
- Hawaii Leads in Luxury Housing Price Growth in 2017 – National Mortgage Professional
