Paradise or Problem: Baby Boomer Housing Shifts in Hawaii (2018-2023)

Hawaii leads the nation in baby boomer homeownership, with nearly 43% of all homes owned by this generation—the highest concentration in any state. Unlike predictions of a mass sell-off as boomers hit retirement age, most are staying put. Over 71% of Hawaii seniors aged 60-65 say they’ll never move, rising to 85% among those 75 and older.

This reluctance to sell has tightened the market, especially on Oahu where boomers control two-thirds of all homeowner-occupied properties. High home values and low property taxes create little incentive to leave, though some do depart for the mainland to stretch retirement dollars or join adult children who’ve moved away. Those who relocate within Hawaii often choose neighbor islands or urban condos, but the overall pattern since 2018 shows remarkable stability—a slow, gradual transition rather than the housing turnover once predicted.

Demographic and Housing Overview

Hawaii’s population is aging rapidly. The state’s share of residents age 65 and over rose from about 19% in 2018 to over 21% by 2023, making Hawaii one of the “grayest” states in the U.S. By 2035, when the last Boomer reaches 70, nearly one in three Hawaii residents will be over 60.

Baby Boomers have high homeownership rates, directly affecting housing occupancy and turnover. Americans over 55 now own the majority of U.S. homes, growing from 44% of homeowners in 2008 to 54% in 2023. Hawaii stands out in this regard – it has the highest concentration of Boomer homeowners of any state. As of 2024, about 42.9% of Hawaii’s homeowner households are headed by a baby boomer, the largest share in the nation.

Across Hawaii, Boomers control a huge portion of housing wealth. A statewide housing study found that as of 2017, Baby Boomers (ages 53–71 then) owned approximately 98,814 housing units in Hawaii, valued at over $65 billion. On Oahu (Honolulu County) alone, Boomers owned about 65,600 homes (roughly two-thirds of the Boomer-owned units statewide).

Hawaii’s counties show different age profiles: Hawaii County (Big Island) has the oldest population with 24.4% over 65, while urban Honolulu County is younger with 20.2% over 65. Neighbor islands like the Big Island, Kauai, and Maui have attracted retirees and older migrants, contributing to their higher senior percentages, whereas Oahu retains more working-age adults.

Homeownership and Location Preferences: Urban vs. Suburban Moves

One key question is whether Hawaii’s Boomers are relocating in retirement – and if so, are they opting for urban convenience or suburban/rural tranquility? Overall, the prevailing trend is limited relocation.

A strong majority of Hawaii’s older residents have remained in their existing homes and communities as they’ve aged. Surveys indicate that as people age, they increasingly prefer to “age in place.” In Hawaii, 64% of seniors aged 60–65 said they would probably never move, and this share climbs to 68% for those 66–74 and 85% for those 75+.

This pattern suggests that most Boomers approaching retirement have stayed in their current homes (often suburban single-family houses). Many have paid off mortgages and feel rooted in place, which reduces the incentive to move. The desire to remain in familiar communities is bolstered by cultural norms – Hawaii’s strong family and community ties encourage many kupuna (elders) to stay near children or longtime friends rather than start anew elsewhere.

Urban vs. Rural Preferences

That said, a subset of Baby Boomers have been active in the housing market, particularly the younger Boomers and those relocating either into or out of Hawaii. When Hawaii Boomers do move for retirement, there are two divergent location preferences:

1. Some downsize and gravitate toward urban centers on Oahu. On Oahu, it’s not uncommon for retirees to sell a large home in the suburbs (for example, in Mililani or Kailua) and move into a condominium in Honolulu’s urban core. By moving to town, they gain proximity to medical facilities, shopping, and cultural amenities, while shedding the maintenance burden of a big house.
2. Others seek a slower pace in rural or neighbor island settings. Many Boomers prefer suburban or rural environments – a continuation of the lifestyle they’ve known or an escape from city congestion. Over 2018–2023, Hawaii’s neighbor island counties saw net in-migration of older adults even as younger workers left.

Hawaii Island (Big Island) is a prime example: retirees have been moving in, drawn by its lower housing costs and laid-back life, while many younger residents have moved out for jobs. According to a Hilo-based demographer, the Big Island recently experienced a natural population decrease because of this dynamic – more older people moving in and young people moving away.

Popular retirement spots include the Kona coast on the Big Island, where mainland transplants purchase homes with ocean views, and parts of Maui and Kauai, known for their resort-like settings. These are predominantly suburban or rural communities. The appeal is clear: calmer traffic, open space, and a strong sense of local community.

In summary, the typical Hawaii Boomer is not bouncing between urban and suburban locales in retirement – most either stay in their longtime home or, if they move, follow a predictable pattern: a minority opt for Honolulu’s urban amenities (often by downsizing to a condo), while others leave Oahu’s urban core for the more suburban neighbor islands.

Downsizing vs. Staying in Place

A central trend in the 2018–2023 period is the tension between downsizing and aging in place. Many Baby Boomers are now empty-nesters or fully retired, and one might expect a wave of them selling large family homes and purchasing smaller, more manageable residences.

Indeed, nearly half of the Baby Boomers who moved in recent years did downsize: according to Zillow data, 46% of Boomer home buyers nationwide in 2021 moved to a smaller home than their previous one. In Hawaii, we do see examples of this – for instance, a Honolulu couple in their 60s might sell a 4-bedroom house in the suburbs and buy a 2-bedroom townhome or a condo with single-level living.

Such moves often occur when upkeep of a big property becomes burdensome or when the owners want to cash out equity. Economic incentives have made downsizing attractive in the last five years: Hawaii’s home values climbed steeply through 2019 and even during the pandemic housing boom, so some Boomers seized the chance to sell at high prices and simplify their living situation.

The Prevalence of Aging in Place

However, the data show that “aging in place” remains by far the dominant choice for Hawaii’s Boomers, and true downsizing sales have been relatively limited. As noted, over 80% of Hawaii seniors 75+ express that they have no intention to move.

Even among younger Boomers in their 60s, well over half plan to stay in their current home indefinitely. This is higher than the U.S. average and reflects both personal preference and Hawaii’s housing constraints.

Many older Hawaii residents simply cannot find suitable downsizing options – there is a “dearth of affordable, appropriate homes for older adults,” which makes downsizing challenging even for those who might want it. In practical terms, an elderly couple in a 4-bedroom house may want a smaller condo, but if that condo costs almost as much as what they sell their house for (due to Hawaii’s high prices), the financial gain is minimal.

Furthermore, inventory of one-story or senior-accessible homes in Hawaii is limited; much of the housing stock are two-story suburban homes or walk-up apartments not ideal for aging knees. Consequently, many Boomers remain in larger homes that may be bigger than they need.

Multi-Generational Living

Some address this by home sharing or multi-generational living – a common scenario is adult children or other family moving in, turning the home into a multigenerational household rather than selling it.

According to an AARP survey, 32% of seniors nationwide were open to having housemates or accessory dwelling units to help age in place. This trend is visible in Hawaii, with ohana units (in-law suites) and accessory dwelling units increasingly used to accommodate either caregivers or family members, enabling seniors to stay put.

It’s worth noting that Boomers’ reluctance to sell en masse has buffered Hawaii’s housing market. There were fears of a “silver tsunami” of home sell-offs – that as Boomers retired and downsized, a glut of homes would hit the market and depress prices.

In Hawaii, those fears have not materialized through 2023. Instead, Boomers have largely held onto their homes, and housing turnover among that age group has been gradual. Researchers found no evidence of large numbers of Boomers selling at the age of 65; if anything, Boomer homeownership rates were still rising into their late 60s.

Motivations and External Factors Shaping Boomer Decisions

Multiple external factors influence whether Hawaii’s Baby Boomers decide to buy, sell, or relocate.

Economic Conditions and Cost of Living

Economic forces have been a major driver of migration and home buying trends for Boomers in Hawaii. In 2018–2023, new economic dynamics emerged. Cost of living in Hawaii reached all-time highs, putting pressure on retirees on fixed incomes.

Housing, utilities, food, and healthcare costs in Hawaii are among the highest in the nation, and this intensified with post-pandemic inflation. Some older Hawaii residents found it increasingly difficult to afford staying, contributing to an uptick in those moving to the mainland for more affordable living.

By 2017–2019, Hawaii started experiencing net population loss for the first time in decades, mainly due to domestic out-migration. While much of that outflow was younger working-age folks, anecdotal evidence suggests Boomers were part of it too – for example, retirees moving to Las Vegas or Arizona to stretch their retirement dollars.

High housing costs are a big reason: a paid-off home in Hawaii can be sold, and the proceeds might buy a comparable home outright on the mainland (often with cash left over). A 2022 report found 1 in 3 Hawaii families (of all ages) were considering moving away due to cost-of-living pressures, and older adults are no exception.

On the flip side, Hawaii’s strong real estate market in 2020–2022 (fueled by low interest rates and mainland buyers) actually bolstered the wealth of many Boomer homeowners. Home values soared during the pandemic housing boom; Honolulu’s median home price hit record highs (easily surpassing $900,000 for a single-family home by 2022).

This surge gave equity-rich Boomers even more financial incentive to stay put and watch their asset appreciate. Notably, some mainland Baby Boomers were attracted to Hawaii during the pandemic as remote work became mainstream – a few buyers in their 50s and 60s snapped up properties in Hawaii in 2020–21, essentially accelerating their retirement home purchase.

Property Taxes and Interest Rates

One clear economic motivator for Boomers to stay in their current Hawaii home is the low property tax. Hawaii has the lowest property tax rates in the country (around 0.3% effective rate). For a Boomer who bought their home decades ago, the annual property tax bill is relatively small compared to, say, California or Northeast states – this makes staying economically sensible.

Meanwhile, mortgage interest rates swung dramatically in the last five years: hitting record lows (~3%) in 2020–21 and then spiking above 6% in 2022–23. Low rates allowed some Boomers to refinance or purchase vacation condos with cheap financing. High rates by 2023, however, discouraged any discretionary moving – a Boomer with a 3% mortgage has a strong incentive not to sell and take on a new mortgage at double the rate.

Climate and Environmental Considerations

Hawaii’s climate has long been one of its main draws for retirees. The warm weather, clean air, and natural beauty are a big reason why mainland Boomers dream of retiring to the islands. Over 2018–2023, climate continued to be mostly a pull factor: a selling point for Hawaii living.

However, climate concerns have increasingly come into play as well. The late 2010s and early 2020s saw growing awareness of climate change impacts in Hawaii, such as sea-level rise, coastal erosion, and severe weather events. A 2018 study found over one-third of Hawaii’s coastline is at risk as climate change accelerates.

Baby Boomers who own oceanfront or low-lying properties are becoming cognizant of long-term risks to their homes’ value and safety. Most Boomers in 2018–2023 did not move explicitly because of climate change projections. But some did take adaptive steps: e.g., a retiree couple in East Oahu might choose to sell a beachfront house (while the market is still high) and move to a condo on higher ground, to avoid future shoreline loss.

Acute environmental events during 2018–2023 did influence some Boomer decisions. The 2018 Kīlauea volcanic eruption on the Big Island destroyed over 700 homes; some of those were retirement homes of Boomers in the Puna area. Most recently, the 2023 Maui wildfires were a sobering reminder that even paradise isn’t immune to disasters.

Tax Policies and Financial Considerations

Taxation is often a significant factor for retirees choosing where to live. Hawaii’s tax policies present an interesting mix of pros and cons for Baby Boomers.

On the plus side for Hawaii, the state offers generous exemptions on retirement income. Hawaii does not tax Social Security benefits or public and private pension payouts. For many Boomers who have pensions from government or union jobs (or annuities), this means their retirement checks are free of state tax in Hawaii.

Additionally, Hawaii’s property taxes are extremely low for owner-occupants – and seniors often get additional home exemptions. For example, Honolulu County offers homeowners age 65+ an extra property tax exemption, lowering their taxable home value.

On the negative side, Hawaii has one of the highest overall costs of living partly because it has high taxes in other areas. While pensions aren’t taxed, 401(k) and IRA withdrawals are fully taxable as regular income by Hawaii. Many Boomers’ retirement savings are in IRAs/401(k)s, so if they retire in Hawaii, large withdrawals bump them into Hawaii’s top income brackets (which can be as high as 11% state income tax).

This has led some financially savvy Boomers to change residency to a no-tax state once they retire and start drawing down big retirement accounts – even if they keep a home in Hawaii, they might officially “move” to Florida for half the year to avoid Hawaii income tax on their distributions.

Cohort Variations Within the Boomer Generation

Not all Baby Boomers behave the same. Within this large cohort, there are meaningful differences between different subgroups:

Younger vs. Older Boomers

Younger Boomers (often defined as those born 1955–1964, currently about 59–68 years old) in Hawaii are typically in the early phase of retirement (or still a few years away). Many in this group only recently became “empty nesters” as their adult children moved out in the 2010s.

Younger Boomers have generally been more mobile and transactional in the housing market than their older counterparts. Over 2018–2023, younger Boomers were the most likely within the 59–77 age range to be buying homes. Some of these purchases are second homes or investment properties, but many are relocations or retirement home purchases.

Younger Boomers are also more willing to make long-distance moves. Data show that in recent years, younger Boomer buyers moved a median of 90 miles away, farther than any other generation, whereas older Boomers moved around 60 miles on median. This suggests younger retirees are more likely to undertake a big relocation – for example, moving from California to Hawaii or from Honolulu to Hawaii Island.

Younger Boomers are also more likely to carry a mortgage and trade homes. Many took advantage of low interest rates pre-2022 to purchase new homes or refinance.

By contrast, older Boomers (born 1946–1954, now about 69–77) are deeper into retirement and often have older mortgages (or none at all). They generally exhibit more conservative housing behavior – staying put or downsizing very locally. If an older Boomer in Hawaii moves, it might be into an assisted living facility or to be closer to adult children for caregiving reasons, rather than for lifestyle or a “dream home.”

Local Hawaii Boomers vs. Mainland Transplants

Within Hawaii’s Boomer cohort, another important distinction is between native or long-time Hawaii residents and Boomers who relocated to Hawaii from the U.S. mainland.

Native Hawaii Boomers tend to have strong family networks and emotional attachments to Hawaii. Many of them benefited from being early in the market – they might have bought homes in the 1970s–1990s when prices, though high, were not as astronomical as today. Those who did are usually sitting on substantial home equity.

A common scenario: a local Boomer couple owns a single-family home on Oahu (perhaps inherited or bought decades ago) and has adult children who may have moved to the mainland. This couple often stays in Hawaii as long as they can, enjoying their familiar community and perhaps hosting visits from the kids/grandkids.

However, if their children permanently settle on the mainland, some local Boomers eventually choose to follow. We have seen, especially in the 2015–2023 period, an increasing number of lifelong Hawaii residents in their 60s and 70s relocating to places like Las Vegas, Arizona, or Oregon to be closer to their children (and to take advantage of lower living costs).

For local Boomers who stay, many live in multi-generational households. It’s a tradition in Hawaii for grandparents to live with their children and grandchildren. Census data consistently show Hawaii leads the nation in multi-gen homes. This trend means fewer local Boomer-owned homes go on the market – instead of selling, they are kept in the family.

In contrast, Mainland transplant Boomers in Hawaii generally arrive with different motivations and circumstances. Many are retirees (or late-career individuals) who fell in love with Hawaii through vacations or work assignments and decided to purchase a home for their golden years.

These Boomers tend to be more affluent on average – given Hawaii’s prices, a comfortable nest egg is needed to buy a retirement home here. Their housing choices skew toward resort areas, condominiums, or newer developments. Often these are second homes turned primary; they may have owned it for vacation use in the 2010s and then moved full-time upon retirement.

One notable pattern is that mainland Boomer transplants often choose different locations than local Boomers. They might favor areas with established retiree communities or amenities catering to nonlocals – e.g., West Maui (Lahaina/Kāʻanapali), Kona and Kohala Coast on Big Island, Princeville on Kauai, or the new condo towers of Kakaʻako in Honolulu.

Local Boomers, conversely, are more likely to live in places like Pearl City, Hilo, or Waipahu – typical local towns. This means the Boomer migration doesn’t uniformly affect all towns: some communities have aging local populations staying put, while other communities have an influx of newcomer retirees.

Comparison: 2008–2018 vs. 2018–2023

When comparing the last five years with the previous decade, many Boomer housing trends have persisted, while a few have accelerated or shifted:

Aging in Place Dominance

Both 2008–2018 and 2018–2023 saw the majority of Hawaii’s Baby Boomers staying in their homes rather than moving. The strong desire to age in place that was observed in surveys a decade ago has remained firm.

In 2008–2018, Boomers aged from their 50s into their 60s, and many remained in the workforce, keeping their homes. By 2018–2023, those same people are in their 60s/70s and still in those homes. The percentage of seniors saying they’ll never move even increased with age (up to 85% for 75+). The “stickiness” of Boomers in housing has thus been a continuous trend, contributing to low housing turnover in both decades.

Downsizing Trends

During 2008–2018, downsizing was modest – partly because many Boomers were still mid-career or recovering from the recession and weren’t ready to sell. By the late 2010s and early 2020s, downsizing became a more common conversation as Boomers retired in larger numbers.

We saw slightly more of it in 2018–2023 (some high-profile sales of longtime homes and moves to condos, etc.). Nationally, Boomers downsizing picked up post-2015 as the housing market improved.

In Hawaii, however, downsizing remained constrained by a lack of suitable inventory in both decades. If anything, the shortage of senior-friendly housing became more acute by 2018–2023, making it still hard for Boomers to downsize even if they wanted to.

Migration Patterns

One big difference is Hawaii’s overall migration trend. From 2008–2018, Hawaii’s population was growing slightly (natural increase offsetting out-migration). Boomer-wise, that decade saw some mainland Boomers moving into Hawaii, capitalizing on the economic recovery to buy retirement homes, and relatively fewer local Boomers leaving.

In contrast, 2018–2023 marked the start of population decline for Hawaii due to out-migration, and Boomers contributed to both sides of the ledger: more local Boomers left (especially after retirement, to join kids elsewhere or seek affordability) and fewer mainland retirees arrived (because of skyrocketing costs and the pandemic making travel harder for a while).

Housing Market Conditions

The 2008–2018 period began with a housing bust and ended with a boom. Many Boomers held off making moves early on (2008–2012) due to negative equity or uncertainty. Once conditions improved, they cautiously began to act around 2013–2018.

In 2018–2023, we saw an unprecedented boom (2020–2021) followed by a correction (2022–2023 interest rate spike). Boomers in Hawaii responded by mostly staying put during uncertainty (mirroring their behavior in 2008–2012).

Notably, when the market boomed (2013–2018 and 2020–2021), some Boomers capitalized by selling high, but this was a minority. Most instead used it as an opportunity to refinance or help their kids buy homes (tapping equity). The consistent outcome in both decades is that Boomers emerged with more housing wealth.

Boomers’ Buying Power

In the earlier decade, Generation X and older Millennials still comprised a big chunk of buyers alongside Boomers. Boomers were important, but by the late 2010s, Boomers took the lead nationally in home purchases.

In Hawaii, anecdotal evidence suggests younger generations struggle more with affordability, so relatively more purchases (especially of higher-end properties) are by Boomers now than 10–15 years ago. So compared to 2008–2018, Boomers in 2018–2023 have an even greater presence in the housing market, both as owners and buyers.

External Factors

The previous decade’s defining challenges were the Great Recession and slow recovery; Boomers were mostly focused on financial recovery and working longer, not dramatic relocations.

The current five-year span’s challenges were the pandemic, rapid inflation, and climate events. These introduced new considerations (health safety, remote lifestyle, etc.) that weren’t present before. For instance, remote work during the pandemic allowed some younger Boomers to move to Hawaii while still working a mainland job – a scenario that didn’t exist in 2008–2018.

References

• Baby Boomer-Dominant Housing Markets – Construction Coverage
• Hawaii’s Population Is Aging Fast. The Impacts Will Be Significant – Civil Beat
• Hawaii Island’s Population Drop Signals An Ominous Economic Trend – Civil Beat
• Aging in place, or stuck in place? – Honolulu Star-Advertiser
• Baby Boomers Overtake Millennials as Largest Generation of Home Buyers – National Association of Realtors
• Aloha ‘Oe: Population Migration Between Hawaii and the U.S. Mainland – UHERO
• Tax Tips for Retirees in West Coast States and Hawaii – Nasdaq
• The 2022 American Home Size Index – AHS
• Hawaii Housing Planning Study 2019 – Hawaii Housing Finance & Development Corp.
• Hawaii Population Characteristics 2023 – DBEDT/US Census