Hawaii’s chief economist told lawmakers on Tuesday that 24% of Hawaii homes were purchased by buyers from outside the state. The figure is even higher on the neighbor islands.
Eugene Tian, chief economist for the Department of Business, Economic Development and Tourism, made the remarks during a briefing covering the state's economic forecast for 2020.
The 24% figure is based on data from the preceding decade, in which roughly 5,000 homes were sold statewide. Tian said approximately 1,000 of those were purchased by residents of other U.S. states.
Around 200, or 4% of the total, were purchased by foreign buyers.
On Oahu, non-resident purchases made up 15% of total sales, but Tian told lawmakers the share is much higher on the neighbor islands.
“The number for the neighbor islands is actually over 40%. Maui, Kauai, and the Big Island was over 40 percent,” he said.
Tian expects that the out-of-state purchase trend to continue. Hawaii has the lowest property taxes of any state in the country, which makes second homes relatively cheaper compared to high-tax states like New York and California.
The influence of outside demand still wasn’t enough to keep the housing market on Oahu from cooling. There, the median price of a home fell modestly last year, declining less than half of one percent for single-family homes.
Condo prices were flat going into December, but ended up rising around 1% by year’s end.
New home construction likely influenced that trend, combined with a third straight year of population decline.
Prices were mostly up elsewhere in the state, where there has been less construction and populations have either grown or declined less dramatically than on Oahu.