If you have started searching for a home in Hawaii, you have probably noticed something that does not show up in most mainland markets: two nearly identical condos, same building, same floor plan, and one is priced hundreds of thousands of dollars below the other. Nine times out of ten, the difference is one word in the listing. Leasehold or fee simple.

I have been selling Hawaii real estate since 2005, and this is the single most misunderstood thing I see buyers walk into. Get it wrong and you can end up owning a home on land you do not control, with a payment that resets on you and a resale that gets harder every year. Get it right and leasehold can occasionally be a smart, eyes-open choice. Here is the honest breakdown.

Fee Simple: You Own the Land

Fee simple is what most people picture when they think of owning a home. You own the building and the land underneath it, outright and indefinitely. You can live in it, rent it, remodel it, pass it to your kids, and sell it whenever you want. There is no ground lease, no lease rent, and no expiration date on your ownership. The vast majority of homes on Oahu are fee simple, and for most buyers it is the cleaner, safer way to own.

Leasehold: You Own the Building, Someone Else Owns the Land

With leasehold, you buy the improvements (the house or the condo unit) but you do not own the land. Instead, you lease the land from the owner, called the lessor or fee owner, for a set number of years. You are the lessee. That arrangement carries a few moving parts that every buyer needs to understand before writing an offer:

• Lease rent. You pay the landowner an ongoing amount for the use of the land, often monthly. This is on top of your mortgage, property taxes, and any association fees.
• Lease term and expiration. Every ground lease has an end date. As that date gets closer, the property becomes harder to finance and harder to sell.
• Lease rent renegotiation. Many leases have fixed periods after which the lease rent resets to current market rates. A payment that looked affordable can jump substantially at a renegotiation date.
• Reversion (surrender). When the lease finally expires, ownership of the improvements can revert to the landowner. In plain terms, at the end of the lease you can be required to surrender the property, sometimes without being paid for the building you have been maintaining for decades.

None of this is hidden or shady. It is all spelled out in the lease document. The problem is that buyers get excited about the lower price and do not read the terms that actually determine what they are buying.

Why the Price Gap Exists

Leasehold homes are cheaper up front for a simple reason: you are buying fewer rights and a shrinking clock. The market prices in the lease rent, the remaining term, and the reversion risk. A leasehold condo with 30 good years left and low, fixed lease rent will hold value far better than one with 12 years left and a renegotiation coming. Two units that look identical online can be completely different investments once you open the lease.

The Financing Reality

This is where leasehold trips up the most buyers. Lenders are cautious about leasehold because their collateral disappears when the lease ends. As a general rule, a lender wants the lease term to extend well beyond the life of the loan. If the remaining lease is short, you may find that few lenders will finance it at all, which shrinks your future buyer pool when it is your turn to sell. Cash becomes king, and cash buyers expect a discount. Talk to a lender who actively does Hawaii leasehold loans before you fall in love with a unit. Financing that works today may not work for the person you eventually sell to.

Where You See Leasehold on Oahu

Leasehold shows up most often in certain condominium buildings, and in some pockets of single-family lots where the land has historically been held by large estates and trusts. You will run into it across Honolulu and in some resort and beachfront condos. As you browse neighborhoods, always confirm the land tenure on each listing. When you use the Hawaii MLS search on this site, you can filter for fee simple so you are only looking at what you actually want.

Is Leasehold Ever a Good Idea?

Sometimes. If the lease has a long remaining term, the lease rent is low and fixed for many years, and the discount to comparable fee simple is large, leasehold can make sense for the right buyer with the right time horizon. Some buyers use it to get into a building or a location that would otherwise be out of reach, planning around the lease terms rather than being surprised by them. The key word is planning. Leasehold is a math problem, not an emotional one. If the numbers only work when you ignore the renegotiation date or the reversion, that is your answer.

A Note on Hawaii's Newer Leasehold Housing Programs

You may have seen headlines about leasehold in the news recently. In June 2026, Governor Green signed SB2061 into law as Act 121, which strengthens Hawaii's Ninety-Nine Year Leasehold Program to support affordable, owner-occupied condominium development on public land. That is a very different animal from the older private ground leases described above. These state programs use long leasehold terms deliberately to lower land costs and create pathways to homeownership for local families, with affordability and owner-occupancy requirements built in. If you are looking at one of these programs, the terms are structured to protect the buyer, but you still want to read exactly what you are signing.

How to Protect Yourself

Before you make an offer on any leasehold property, get answers in writing to these questions: How many years are left on the lease? What is the current lease rent, and when does it renegotiate? How is the new lease rent calculated at renegotiation? What happens at reversion? Is there any option to buy the fee (convert to fee simple), and at what price? Then have your agent and, ideally, a real estate attorney review the lease itself. This is exactly the kind of nuance you will not get from a national listing portal, and it is where a local team earns its keep.

Frequently Asked Questions

Is fee simple always better than leasehold in Hawaii?

For most buyers, fee simple is the safer choice because you own the land and there is no expiration or lease rent. Leasehold can work for specific buyers when the remaining term is long, the lease rent is low and stable, and the discount is significant, but it requires careful math.

What is lease rent?

Lease rent is the amount a leasehold owner pays the landowner for the use of the land. It is separate from your mortgage and property taxes, and it can increase at scheduled renegotiation dates.

Can I get a mortgage on a leasehold property in Hawaii?

Sometimes, but it depends heavily on how many years remain on the lease. Lenders generally want the lease to extend well past the loan term, so short remaining leases are difficult to finance and often require cash.

What happens when a Hawaii ground lease expires?

At expiration, ownership of the improvements can revert to the landowner and you may be required to surrender the property. The exact terms are defined in the lease, which is why reading it is essential.

How do I know if a listing is leasehold or fee simple?

Land tenure is disclosed on the listing. You can filter for fee simple in the search on this site, and your agent can confirm the tenure and pull the lease details before you make an offer.

Have Questions About a Specific Property?

If you are weighing a leasehold home or condo and want a straight answer on whether the numbers work, reach out. My team and I will pull the lease, run the real cost, and tell you honestly what we would do. You can start by exploring Oahu communities or searching current Hawaii listings, and call us when you are ready.

Tony Kawaguchi, R(B), is a licensed Hawaii real estate broker (RB-21841) and leads The Kawaguchi Group at eXp Realty in Honolulu. This article is general education, not legal, tax, or financial advice. Ground leases vary, so consult a licensed attorney and lender about your specific situation before purchasing a leasehold property.

There's a particular kind of morning that only happens in Diamond Head. The trade winds are still cool, the light comes in low and gold over the crater, and somewhere below your lanai you can hear waves breaking on the reef at Cromwell's Cove. If you've ever wondered what it actually feels like to live that morning every day, 245 Palaoa Place is about as close as it gets.

I'm thrilled to introduce this newly listed 5-bedroom, 4-bathroom home, offered at $6,750,000. It sits in one of the most storied pockets of Honolulu real estate — the stretch of coastline between Diamond Head and Black Point known for deeded beach access, world-class surf, and some of the most private, established homes on the South Shore.

A Home That's Been Freshly Reimagined

Built in 1953 and thoughtfully modernized ever since, 245 Palaoa Place just finished a recent remodel — reported at roughly $1 million — that brought the home fully into the present without losing its warm, island character. The refresh included two newly renovated bathrooms, a brand-new library off the main living space, and a completely rebuilt outdoor dining and entertaining area designed to take full advantage of Oahu's famously perfect weather.

At 4,096 square feet, the layout gives you real room to spread out: five bedrooms, four full bathrooms, a two-car garage, and a primary suite that alone is worth the visit — it has its own ocean view, a private lanai, and enough space to carve out a home office if you need one. Downstairs, the new library (all deep navy built-ins, warm wood floors, and a wall of books) opens directly into the dining room and kitchen, so the home flows easily between quiet and social spaces.

Out back, the entertaining spaces are just as considered. A gated pool, hot tub, and kiddie pool are framed by a freshly landscaped yard, with an outdoor kitchen and dining area set up to host anything from a quiet family dinner to a full-blown sunset party. It's the kind of backyard that makes you cancel other plans.

Inside, the kitchen has been finished with the same care — clean white cabinetry, a long stone-topped island with seating for the whole family, stainless appliances, and a statement pendant light that ties the whole room together. It's a kitchen built for real cooking and real gathering, not just photographs.

Diamond Head: A Neighborhood, Not Just a View

It's easy to talk about Diamond Head as scenery — the crater is one of the most photographed landmarks in the Pacific, after all. But for the people who actually live here, Diamond Head is a neighborhood in the fullest sense: quiet, walkable streets lined with plumeria and monkeypod trees, historic estates tucked behind hedges, and a community that has protected its low-key, unhurried character for generations.

245 Palaoa Place sits within the section of Diamond Head that blends into Black Point and Ka'alawai — an enclave of roughly seventy-five homes wedged between Diamond Head proper and Kahala, famous for dramatic homes perched above black lava outcroppings and some of the clearest water on this side of the island. Ancient Hawaiians called this stretch of coastline Kupikipiki'o, meaning "turbulent water," for the way the surf churns against the rocks at Black Point during a big south swell. It's a name that still fits on the right day, even as the neighborhood today is better known for its calm, private beaches than its turbulence.

This is also a walker's neighborhood in a way that's rare in Honolulu. Diamond Head State Monument and its trailhead are minutes away for anyone who wants a sunrise hike with a summit view of the entire South Shore. Kapiolani Park, the Honolulu Zoo, and the restaurants and boutiques of Kaimuki and Monsarrat Avenue are a short drive or an easy bike ride away, while Kahala's shops and Waialae Country Club anchor the other end of the neighborhood. And yet, tucked back on a quiet cul-de-sac like Palaoa Place, you'd never know any of that hustle was nearby.

The Real Draw: Deeded Beach Access at Cromwell's Cove

Here's the detail that makes this particular address special, even by Diamond Head standards: 245 Palaoa Place sits directly above the coveted Cromwell's Cove, and comes with private deeded beach access just a few doors down. That's not a vague "close to the beach" — it's a legal, protected right of way to one of the most sought-after little coves on Oahu's South Shore.

Cromwell's has long been a favorite among locals for its combination of a small sandy pocket beach, a shallow reef that keeps the water calm on all but the biggest swells, and a lineup just offshore that draws surfers and longboarders at sunrise and sunset. It's the kind of beach that doesn't show up on tourist maps — no crowds, no concession stands, just a short walk down from the neighborhood and into the water. Locals also know it for tidepooling at low tide and for some of the most reliable people-watching-free sunset views on this side of the island.

For surfers in particular, this location is close to a dream: excellent breaks are a short paddle from the sand, and the quality of the reef here means the waves are consistent without the crowds you'd find at more famous South Shore breaks. Whether your morning routine is a swim, a paddle out, or just a walk along the sand with coffee in hand, having deeded access this close to home changes the rhythm of daily life in a way that's hard to put into words until you've lived it.

Why This One Won't Last

Homes with true deeded beach access in Diamond Head and Black Point rarely come to market, and when they do, they move quickly. Combine that rare access with a recently completed remodel, a flexible five-bedroom layout, resort-style outdoor living, and one of the most storied micro-neighborhoods on Oahu, and it's easy to see why this listing is already generating serious interest.

Please note: this sale is subject to the seller identifying a replacement property, so timing is worth discussing early if you're considering an offer.

Let's Talk About 245 Palaoa Place

I'd love to walk you through this home in person — the photos are beautiful, but they don't fully capture what it feels like to stand on that lanai with the trade winds coming through, or to walk down to Cromwell's Cove for the first time. If you're curious about this listing, considering a move to Diamond Head, or just want to talk through what a property like this is really worth in today's market, reach out any time. I'm happy to schedule a private showing or answer any questions you have.

Tony Kawaguchi
The Kawaguchi Group, eXp Realty
(808) 201-3577

245 Palaoa Place, Honolulu, HI 96816 — 5 bed / 4 bath / 4,096 sq ft / $6,750,000 / MLS #202617416

Something quietly shifted in the Hawaii housing market over the summer, and most people haven't noticed it yet: there are simply more homes to choose from, and they're taking longer to sell. That sounds small, but if you're buying, selling, or holding investment property anywhere in the islands, it changes the playbook.

On Oahu, List Sotheby's International Realty's August 2026 market report shows single-family inventory up slightly year over year to 794 active listings, while condo inventory climbed 4.1% to 2,512 listings. New listings jumped too, up 14.5% for single-family homes and 6.4% for condos compared to last August. At the same time, pending sales cooled, with single-family contracts down 7.6% and condo contracts down 3.2% overall. Put simply: more sellers are testing the market, but fewer buyers are pulling the trigger at the pace they were a year ago.

Inventory Is Growing, But Unevenly

The pattern isn't identical everywhere. On the Big Island, homes are now sitting on the market for around 105 days on average, up from 99 days a year ago, according to Redfin's county-level data. That's a meaningful shift for sellers who priced their homes assuming a quick sale. Maui's condo market has actually seen a burst of buyer activity in recent months, with pending sales for condos up sharply this spring as prices there continue correcting from their post-2023 peak. So this isn't one uniform buyer's market story, it's a market where leverage is shifting toward buyers in some price points and neighborhoods faster than others, and sellers need to know which bucket their property falls into before they set a price.

What This Means If You're Selling

Longer days on market and rising inventory mean the days of listing high and waiting for a bidding war are largely over outside of a handful of hot price bands. List Sotheby's data shows contract activity actually picking up in the $500,000 to $700,000 range and the $1 million to $2 million condo range, so pricing strategy now has to be more surgical than it was two years ago. If your property has been sitting for more than 60 to 90 days without a serious offer, that's a signal from the market, not bad luck, and a price adjustment or a look at financing incentives for the buyer is usually more effective than waiting it out.

What This Means If You're Buying

More inventory and a slower pace mean more room to negotiate, ask for repairs, and take your time on due diligence, especially on condos, where days on market tend to run longer than single-family homes. It also means this is a good moment to look at financing tools that weren't as widely used when rates were lower and competition was fiercer. The Hawaii Housing Finance and Development Corporation's Hale Kamaaina Mortgage Program, the rebranded Hula Mae program, is currently offering qualifying first-time buyers 30-year fixed rates as low as 5.40% with no down payment assistance, or 5.65% when paired with HHFDC down payment help, well below prevailing market rates. Conventional loan borrowers can qualify for 5.70% to 5.95% depending on down payment assistance. HHFDC estimates buyers using these programs can save $300 to $400 a month compared to market-rate financing, which can be the difference between qualifying and not qualifying in today's price environment.

A Note for Investors

A softening, slower-moving market with more inventory is often when disciplined investors find better entry points than they did during the bidding-war years. If you've been waiting on the sidelines for negotiating leverage to return, the data suggests it's starting to show up, particularly outside of the tightest Honolulu submarkets and in condo segments where days on market are longest. Just factor in that financing costs and any county-level short-term rental restrictions in your target area have both shifted meaningfully over the past year, so run the numbers against current rules, not last year's assumptions.

Bottom Line

Hawaii isn't flipping into a buyer's market overnight, but the balance of power is moving that direction in measurable ways: more listings, more days on market, and more room to negotiate than we've seen in a few years. Whether you're listing a property, shopping for your first home, or evaluating an investment, the smart move right now is to look at current data for your specific island and price point rather than assuming the market still behaves the way it did in 2022 or 2023. If you want a read on what this means for your neighborhood specifically, that's a conversation worth having before you price a listing or make an offer.

If you're moving to Hawaii or house-hunting with kids in mind, school quality is usually right behind price and location on the list of questions. To help, we pulled together the public schools across the islands that consistently earn the strongest marks, drawing on Hawaii Department of Education performance data, Smarter Balanced state test scores, and thousands of ratings and reviews from parents and students on sites like Niche and GreatSchools. Here's a look at some of the state's most highly rated public schools, island by island, with an extra-close look at the elementary schools that keep coming out on top.

Waimea High School on Kauai, one of the state's top-rated public campuses. Photo: Wikimedia Commons (CC BY-SA 4.0)

Oahu's Top-Rated Schools

Mililani High School tops the statewide list, earning an A+ overall grade on Niche and a 9 out of 10 rating on GreatSchools. Students there posted 72.65% proficiency in English Language Arts and 49.41% in math on the Smarter Balanced Assessment, both well above the state averages of 59% and 25%, alongside a 94% graduation rate. Parents and students also point to Moanalua High School and Kalani High School as standouts, both earning A grades on Niche, with reviewers consistently praising teachers who go out of their way to support students and a wide range of clubs and activities.

Big Island Standouts

On Hawaii Island, Waiakea High School in Hilo holds an A grade on Niche, with students describing an energetic school community and a student government that helps set the tone from freshman year on.

Maui's Highly Rated Schools

Maui High School in Kahului stands out for its four-year engineering program, giving students hands-on experience with robotics, CAD, and even TIG welding and 3D printing well before graduation. King Kekaulike High School in Pukalani is another Maui favorite, with alumni frequently highlighting the close relationships built with teachers and counselors over four years on campus. Both schools carry a B+ Niche grade.

Kauai's Top Public School

Waimea High School is Kauai's highest-rated public high school, earning a B+ on Niche, with students describing teachers and counselors who are consistently willing to help.

A Closer Look: Hawaii's Highest-Rated Elementary Schools

Elementary schools set the tone for a child's entire relationship with school, and Hawaii has several public elementary campuses that consistently rise to the top of the rankings, with strong test scores, glowing parent reviews, and a real sense of neighborhood identity. Here's a more detailed look at five of the state's standouts.

Momilani Elementary School — Pearl City, Oahu

Momilani Elementary sits at the top of Pearl City, a well-established central Oahu community just above Pearl Harbor, at 2130 Ho'okiekie Street. The school has served the neighborhood since 1972 and today enrolls about 407 students in grades PK-6 with an 18:1 student-teacher ratio. Momilani holds an A grade on Niche and a 9 out of 10 rating on GreatSchools, and it's currently ranked #1 among all elementary schools in Hawaii. On state testing, roughly 82% of students are proficient in math and 84% in reading, putting Momilani in the top 5% of Hawaii schools for both subjects and the top 1% overall. The school has also been recognized three times with the National Blue Ribbon Schools Award, with honors in 2004 and 2010.

Mililani Ike Elementary School — Mililani Mauka, Oahu

Mililani Ike Elementary is located at 95-1330 Lehiwa Drive in Mililani Mauka, the upper, newer section of the master-planned Mililani community in central Oahu. The school enrolls about 409 students in grades PK-5 with a comfortable 14:1 student-teacher ratio, and it holds an A grade on Niche, currently ranked #5 among Hawaii's public elementary schools. Test scores show roughly 80% of students proficient in math and 82% in reading. Parents highlight the school's community feel: one GreatSchools reviewer wrote, "Mililani Ike is such a friendly school. The teachers are great and the office staff are very helpful. The campus is beautiful and well maintained. The school encourages family involvement and my children enjoy going to school each day."

Maunawili Elementary School — Kailua, Oahu

Maunawili Elementary is tucked into the Maunawili valley at 1465 Ulupi'i Street, a quiet residential area inland from Kailua town on Oahu's Windward side, not far from the trailhead for the popular Maunawili Falls hike. With about 338 students in grades PK-6 and a 13:1 student-teacher ratio, the school earns an A grade on Niche and a 9 out of 10 on GreatSchools, ranking #12 among Hawaii's public elementary schools. Academically, about 74% of students are proficient in math and 79% in reading, both in the top 5% of schools statewide. Parent reviews consistently mention the school's focus on the whole child: "Teachers seem interested in the whole child, not just academics... schools are only as good as the families that support them, and there is great parent involvement here." Reviewers also point to the school's enrichment courses as a highlight, with students describing being genuinely challenged by their enrichment teachers.

Ernest Bowen de Silva Elementary School — Hilo, Hawaii Island

Ernest Bowen de Silva Elementary sits at 278 Ainako Avenue in the Ainako neighborhood of upper Hilo, a residential area on the mauka (mountain) side of town near the University of Hawaii at Hilo. The school enrolls about 422 students in grades PK-6 with an 18:1 student-teacher ratio and offers a Gifted & Talented program for advanced learners. It carries an A-minus grade on Niche and is ranked #1 among public elementary schools in Hawaii County, landing at #20 out of over 200 elementary schools statewide. On recent state testing, roughly seven in ten students are proficient in both math and reading, keeping the school firmly in the upper tier of Big Island public schools.

Koloa Elementary School — Koloa, Kauai

Koloa Elementary is located at 3223 Poipu Road in Koloa, a historic former plantation town on Kauai's south shore just up the road from the Poipu resort area. It's the only public elementary school families on the south shore need to consider, and it shows in the reviews: one parent wrote, "We moved from an excellent school district on the mainland recently, as did our neighbors. This was the only elementary school we considered on the south shore," while another simply said, "Amazing school, I am so happy we are in this community!" The campus, home to about 355 students in grades PK-5 with a 15:1 student-teacher ratio, is also known for a standout hands-on program — one reviewer called it "the best" for its "hydroponics and gardening program in all grades." Koloa Elementary holds an A-minus grade on Niche, the highest mark among Kauai's public elementary schools, with about 67% of students proficient in both math and reading on recent state assessments.

10 More Highly Rated Oahu Elementary Schools

Oahu's list of standout public elementary schools runs much deeper than the ones above. Here's a closer look at ten more campuses, spanning from Waikiki to Pearl City, that consistently post strong test scores and enthusiastic reviews from the families who know them best.

Manoa Elementary School — Manoa Valley, Honolulu

Manoa Elementary sits at 3155 Manoa Road in Manoa Valley, a lush, established residential neighborhood in the hills above Waikiki, just down the road from the University of Hawaii at Manoa. The school enrolls about 545 students in grades PK-5 with a 17:1 student-teacher ratio and offers a Gifted & Talented program. It carries an A grade on Niche and an 8 out of 10 on GreatSchools, ranking in the top 5% of Hawaii schools for both math and reading, with roughly 80% of students proficient in each subject. One alum summed up the experience: "The school is in a nice area, and the weather is usually fairly nice too. The school feels safe and teaches students not only academics, but basic morals and manners. Students all come out well-rounded."

Noelani Elementary School — Manoa, Honolulu

Noelani Elementary is located on Woodlawn Drive in the Manoa area of Honolulu, a few blocks from Manoa Elementary in the same green, mauka valley. With about 419 students in grades PK-5 and a 17:1 student-teacher ratio, Noelani holds an A grade on Niche and an 8 out of 10 on GreatSchools. Recent state testing shows roughly 81% of students proficient in English Language Arts, 79% in math, and 84% in science, putting the school in the top 5% of Hawaii campuses for overall test scores. A reviewer described it simply: "This school has a great learning environment with amazing and friendly teachers."

Mililani Mauka Elementary School — Mililani Mauka, Oahu

Mililani Mauka Elementary shares the upper Mililani community with nearby Mililani Ike, serving a similarly master-planned, family-oriented central Oahu neighborhood. The school enrolls about 652 students in grades PK-5 with a 14:1 student-teacher ratio and holds an A grade on Niche along with a 9 out of 10 GreatSchools rating, among the highest on the island. State test scores show roughly 82% of students proficient in math and 80% in reading, both in the top 5% statewide. Parents rave about the staff: "Mililani Mauka is a wonderful school in every way. My children receive the best quality of instruction and they are challenged every day. I have had such positive interactions with all staff on campus. They truly care about all of their students."

Waikiki Elementary School — Waikiki, Honolulu

Waikiki Elementary serves families in and around Waikiki, Oahu's best-known resort neighborhood, which is also home to a close-knit residential community away from the beachfront hotels. The school enrolls about 571 students in grades PK-5, holds an A grade on Niche, and has been honored as a National Blue Ribbon School three times — in 2007, 2013, and 2020. On recent testing, about 84% of students were proficient in math, 81% in reading, and 79% in science, each well above the statewide averages. As one alum put it, "Waikiki is the best public school in Hawaii, by far — the teachers there are amazing."

Palisades Elementary School — Pearl City, Oahu

Palisades Elementary is located at 2306 Auhuhu Street in Pearl City, a hillside neighborhood in central Oahu overlooking Pearl Harbor, not far from Momilani Elementary. The campus enrolls about 403 students in grades PK-6 with an 18:1 student-teacher ratio, holds an A-minus grade on Niche, and posts a strong 9 out of 10 GreatSchools rating. It's currently ranked #9 among all Hawaii elementary schools, with about 74% of students proficient in math and 79% in reading — both well ahead of the statewide averages of 41% and 49%.

Koko Head Elementary School — East Honolulu, Oahu

Koko Head Elementary is located on Lunalilo Home Road in East Honolulu, near Aina Haina and Niu Valley on Oahu's southeast coast. The school enrolls about 301 students in grades PK-5 with a 14:1 student-teacher ratio, offers both a Gifted & Talented program and an International Baccalaureate track, and holds an A-minus grade on Niche with an 8 out of 10 on GreatSchools. Recent testing shows roughly 74% proficiency in English Language Arts and 76% in science, with the school ranking in the top 10% of Hawaii campuses for overall test scores.

Mayor John H. Wilson Elementary School — Kaimuki/Kahala area, Honolulu

Mayor Wilson Elementary sits at 4945 Kilauea Avenue near Kaimuki and Kahala in East Honolulu, a well-established residential stretch between Diamond Head and Waialae. The school enrolls about 519 students in grades PK-5 with a 14:1 student-teacher ratio and carries an A-minus grade on Niche. About 76% of students are proficient in math and 78% in reading, placing the school in the top 5% of Hawaii schools for overall test scores. One parent described a strong first-grade experience: "They had some difficulties adjusting initially, but the teacher and staff were very supportive... In the end they excelled in all their subjects and their reading level took off!"

Hokulani Elementary School — Kaimuki, Honolulu

Hokulani Elementary is located on Kamakini Street in Kaimuki, a longtime residential Honolulu neighborhood near Diamond Head. With about 250 students in grades PK-5 and a 14:1 student-teacher ratio, it's one of the smaller, closer-knit campuses on this list. Hokulani holds an A-minus grade on Niche and an impressive 9 out of 10 on GreatSchools, with roughly 82% of students proficient in math and the school ranking in the top 1% of Hawaii campuses for overall test scores. A recent reviewer wrote, "The teachers, staff, students, and families are very respectful, caring, and supportive. The school prioritizes safety and well-being of everyone."

Pauoa Elementary School — Pauoa Valley, Honolulu

Pauoa Elementary sits on Pauoa Road in Pauoa Valley, a quiet inland neighborhood near downtown Honolulu and Nuuanu. The school enrolls about 357 students in grades PK-5 with a 15:1 student-teacher ratio and earns an A-minus grade on Niche, with roughly three-quarters of students proficient in math and reading on recent state testing — well above statewide averages. A parent described the close community feel: "My daughter is in Kindergarten at Pauoa Elementary and we feel very fortunate that our district school is one of such high caliber... This smaller size elementary school allows your child to be known, not just by their teacher but by most of the staff on campus, making the school feel like a real family community."

Ma'ema'e Elementary School — Nuuanu, Honolulu

Ma'ema'e Elementary serves the Nuuanu and Pacific Heights area above downtown Honolulu, a historic, tree-lined valley neighborhood near Punchbowl. It's one of the larger campuses on this list, enrolling about 667 students in grades PK-5 with a 14:1 student-teacher ratio, and it carries an A-minus grade on Niche and an 8 out of 10 on GreatSchools. State testing shows about 78% of students proficient in English Language Arts and 77% in math, ranking the school in the top 10% statewide, with especially strong results across a diverse student body. One alum, now in college, looked back fondly: "Maemae prepared me very well for middle school. The academics were great... I also enjoyed how it was family oriented. Having family fun nights are definitely the highlights of my childhood!"

What These Schools Have in Common

Across all four counties, a few themes show up again and again in the data and the reviews: engaged teachers who build real relationships with students, strong extracurricular and enrichment programs, active parent communities, and in several cases, test scores that outpace the state average by a wide margin. None of this means other public schools in Hawaii aren't doing great work for their students, too. It simply means these are the schools where the numbers and the reviews line up especially well right now.

School ratings are a great starting point, but they're only one piece of the picture. If you're house-hunting with a particular school in mind, it's worth confirming your exact attendance zone with the Hawaii Department of Education, since boundaries can be specific to a street or neighborhood. And if you'd like help finding a home zoned for one of these schools, or in any Hawaii neighborhood, we're happy to point you in the right direction.

Sources

Ratings, rankings, enrollment figures, student-teacher ratios, and test-score data referenced above come from Niche.com and GreatSchools.org school profile pages, current as of September 2026. Parent and student quotes are drawn from reviews published on those same sites.

• Niche Hawaii elementary school rankings: Best Public Elementary Schools in Honolulu County
• Momilani Elementary: Niche | GreatSchools
• Mililani Ike Elementary: Niche | GreatSchools
• Maunawili Elementary: Niche | Niche Reviews
• Ernest Bowen de Silva Elementary: Niche | GreatSchools
• Koloa Elementary: Niche | GreatSchools
• Manoa Elementary: Niche | GreatSchools
• Noelani Elementary: Niche | GreatSchools
• Mililani Mauka Elementary: Niche | U.S. News
• Waikiki Elementary: Niche | GreatSchools
• Palisades Elementary: Niche | GreatSchools
• Koko Head Elementary: Niche | GreatSchools
• Mayor John H. Wilson Elementary: Niche | GreatSchools
• Hokulani Elementary: Niche | GreatSchools
• Pauoa Elementary: Niche | GreatSchools
• Ma'ema'e Elementary: Niche | GreatSchools
• Mililani High School: Niche | GreatSchools
• Moanalua High School: Niche
• Kalani High School: Niche
• Waiakea High School: Niche | GreatSchools
• Maui High School: Niche
• King Kekaulike High School: Niche
• Waimea High School: Niche

If you own a second home, a condo you only visit a few weeks a year, or an investment property on Oahu that sits empty most of the time, you can breathe a little easier for now. In late July, the Honolulu Charter Commission voted down a proposal that would have let voters decide this November whether to create a citywide empty homes tax. It was the second time in less than a year that the idea died just short of the finish line, and it's worth understanding why this keeps happening and what it means for your plans going forward.

What Just Happened at the Charter Commission

The proposal, known as P170, needed nine of thirteen commissioners to vote yes to make the November ballot. It got eight. All six City Council-appointed commissioners supported it, but only two of Mayor Rick Blangiardi's seven appointees did, and the mayor's administration had lobbied hard against putting the question directly to voters. Around the same time, City Council Chair Tommy Waters let his own version, Bill 46, die without a final vote rather than risk it failing outright after he came up one vote short on the council itself. Both paths to an empty homes tax hit a wall within about two weeks of each other.

Why This Fight Keeps Coming Back

An empty homes tax isn't a new idea in Honolulu. Council members have introduced versions of it in 2020, 2022, and again in 2024, and polling has shown roughly three in four Oahu residents support taxing vacant homes at a higher rate. The pitch is straightforward: charge owners of unoccupied units more, use the revenue for affordable housing, and nudge some of those homes back onto the market for local families. The city even paid a consulting firm roughly half a million dollars to study how it might work, though the study was quietly canceled before it finished. The pushback has been just as consistent. City budget officials worry about the cost and difficulty of verifying which homes are actually vacant, kupuna advocates worry about elderly owners getting tripped up by new paperwork, and the Honolulu Board of Realtors has argued the appeals process wouldn't be able to handle the volume of disputed cases fairly.

What This Means If You Own Vacant or Investment Property on Oahu

For now, nothing changes at the county level. There is no new tax, no new filing requirement, and no new exemption paperwork to worry about this year if your Oahu property doesn't carry a homeowner exemption. If you've been holding off on a purchase decision, a 1031 exchange, or a decision about whether to convert a property to a long-term rental because you were waiting to see how this shook out, that pressure is off, at least through this election cycle. That said, don't mistake this for the issue going away. The same coalition that pushed P170 has already signaled it isn't done, and separate legislation aimed at taxing vacant second homes has also been floated at the state level this year, so it's worth keeping an eye on Oahu's property tax classifications generally rather than assuming the status quo is permanent.

It's Not Over — A Few Threads Still Worth Watching

Council Chair Waters still technically has a narrow window to call a special meeting and force a final vote on his bill before it automatically expires, though as of this writing he hasn't done so and hasn't explained why. Separately, the advocacy group behind P170 has said publicly it plans to keep pushing, which means a similar measure could resurface on a future ballot or in a future council session. And with roughly 100,000 Oahu homes not occupied by their owners, according to city estimates, the political pressure to do something about vacant housing during an ongoing affordability crisis isn't likely to disappear just because this particular vote failed.

Bottom Line

Nothing forces you to change how you use or hold a property on Oahu right now, but this is a good moment to make sure your own paperwork is in order regardless: confirm your homeowner exemption is filed if you qualify for one, and if you're renting a property long-term, keep clear records of that in case a future version of this policy asks for proof. If you're weighing whether to buy a second home here, sell an investment property, or convert a vacant unit to a rental, this is exactly the kind of local policy shift worth talking through with your agent before you commit either way.

If you've been waiting on the sidelines for mortgage rates to drop before you buy or sell in Hawaii, here's the update you need: that drop hasn't shown up yet, and it may not arrive this fall the way many hoped. Freddie Mac's weekly survey put the average 30-year fixed rate at 6.71% as of September 3, 2026, up slightly from the week before and the highest reading in about a year. Meanwhile, Hawaii's own housing numbers tell a more interesting story than the rate headlines suggest — sales and prices are actually up in most counties. Here's what's really going on and how to plan around it.

Why Rates Haven't Come Down Yet

The Federal Reserve has held its benchmark rate steady since its late-April meeting, and mortgage rates track bond markets more closely than they track the Fed's own moves. Three events this month will likely decide where rates head next: a CPI inflation report on September 10, the Fed's next policy meeting on September 15-16, and a PCE inflation report on September 25. Fannie Mae and the Mortgage Bankers Association both project rates averaging closer to 6.4% for the broader quarter, which is below where we sit today — but until inflation data cools convincingly, lenders have little reason to price in a big drop. The practical takeaway: don't bank on a rate rescue before year-end. Plan your purchase or listing around today's numbers, not a hoped-for future.

Hawaii's Market Is Actually Outperforming the Rate Story

Despite borrowing costs sitting near their highest point in a year, Hawaii's housing activity has held up well. Statewide, July 2026 figures from Hawaii Realtors show single-family home sales up over 13% year-over-year with a median price near $1.05 million, while condo sales rose nearly 11% with a median price around $560,000. Oahu led the charge: single-family sales climbed 20% year-over-year to a median of $1,224,500, and condo sales rose 7% to a median of $504,500. Buyers who assumed high rates would cool the islands off have mostly been wrong this year — local demand, cash buyers, and out-of-state relocation money have kept absorbing what comes onto the market.

Single-Family and Condos Are Now Two Different Markets

The more useful story right now isn't rates versus no rates — it's property type. On Oahu, single-family homes are running under three months of supply, a seller's market by any definition, with roughly a third of homes closing above their original asking price and a median time on market of just two weeks. Condos are a different animal entirely: supply is closer to six months, only about one in ten condos sells above asking, and buyers have real room to negotiate. That split shows up statewide too — Maui condo sales jumped more than 50% year-over-year as buyers scooped up units that had sat through a long stretch of price softening, while Maui single-family prices actually fell over the same period. The lesson is that "the Hawaii market" isn't one market anymore; it depends heavily on what you're buying and where.

What This Means If You're Buying

If you're chasing a single-family home on Oahu or another tight island market, expect competition and be ready to move fast and clean — waiting for a lower rate could cost you more in appreciation than you'd save in interest. If a condo fits your needs, this is a genuinely better moment to negotiate on price, ask for concessions, or take your time comparing units, especially in Maui or Kauai where condo pricing has softened. Either way, get pre-approved now so you know your real number, and ask your lender about a rate lock with a float-down option in case the mid-September inflation reports bring rates down before you close.

What This Means If You're Selling

Sellers of well-located single-family homes still have leverage in most Hawaii counties and can price with confidence, particularly on Oahu and Hawaii Island. Condo sellers need a more realistic mindset: buyers have options, days on market are longer, and overpricing will just mean sitting through a slower fall season. Pay attention to your specific island and property type rather than assuming a headline mortgage rate tells the whole story.

Bottom Line

Rates near 6.7% aren't going anywhere fast, but that hasn't stopped Hawaii's housing market from posting solid year-over-year gains in most counties. The real divide right now runs between property types, not just between buyers and sellers. Know which side of that divide your deal sits on, and price or negotiate accordingly.

If you've searched "cost of living in Hawaii," you've probably already seen the headline stat: Hawaii is the most expensive state in the country, full stop. That part is true, and it's not close — multiple independent indices put Hawaii's overall cost of living somewhere between 84% and 93% above the national average, with housing doing most of the damage.

But after 24 years and more than $1 billion in Oahu sales, I can tell you the generic statewide number is the least useful thing in your budget. What actually matters is what things cost in the neighborhoods people ask me about most — Hawaii Kai, Kahala, Diamond Head, Kaimuki — and the costs that don't show up in the calculators at all: HOA fees, special assessments, and what it really takes to carry a short-term rental condo. So here's the version I wish someone had handed me: real numbers, organized the way an actual move or purchase decision gets made, plus a few line items the generic cost-of-living posts skip entirely.

The headline number, quickly

Hawaii's overall cost of living index sits in the 180s (national average = 100), and it's been there for a while. Housing is the single biggest driver — Oahu's housing costs run roughly three times the national average — followed by electricity (Hawaiian Electric's residential rate is still the highest in the country, hovering in the low-to-mid 40s per kWh) and groceries (about 50% above mainland prices, since 85–90% of what's on the shelf arrives by ship). Strip housing out of the equation and Hawaii's premium drops to something closer to 25–30% — real, but a very different conversation than "double the mainland."

That framing matters because it changes the question. The real question isn't "is Hawaii expensive" — everyone already knows that. It's "where does the math actually work for my household," and that answer depends heavily on which side of the island you're looking at.

East Honolulu housing: the numbers I actually quote clients

Most cost-of-living articles give you an Oahu-wide average, which flattens Kapolei and Kahala into the same number. That's not useful if you're specifically looking at the east side. Here's roughly where things sit as of this year:

Rentals

• Hawaii Kai 2-bedroom condo: typically $2,800–$3,800/month
• Kahala single-family home: $6,000–$12,000+/month depending on lot and ocean proximity
• Diamond Head 2-bedroom: $3,200–$4,500/month
• Kaimuki 2-bedroom (more attainable entry point): $2,400–$3,200/month

Buying

• Hawaii Kai single-family median: roughly $1.3–$1.6 million
• Kahala single-family median: often $3 million and up, with oceanfront well beyond that
• Diamond Head: highly variable, but expect $2 million+ for a standard single-family lot
• Kaimuki: the relative bargain of the east side, with fixer-uppers still occasionally under $1 million

If you're comparing these to a statewide "$1.2 million Oahu median," you can see why: East Honolulu skews the average up. It also means the affordability strategies that work in Kapolei or Ewa Beach (new construction, larger lot sizes, lower price per square foot) don't translate here. On this side of the island, the affordability lever is usually condo versus single-family, not neighborhood versus neighborhood.

The cost almost nobody budgets for: HOA and AOAO fees

This is the one I see catch people off guard more than any other line item, and it's largely absent from the generic cost-of-living posts. A statewide housing analysis released this year found the median advertised HOA/AOAO fee on Oahu listings had climbed to roughly $880 a month — and that's just the advertised, ongoing fee. It does not include the special assessments that have become increasingly common in older buildings where reserve funds didn't keep pace with maintenance costs, and those can run into the tens of thousands of dollars per unit with little warning.

If you're comparing a $700,000 condo to a $900,000 single-family home, don't stop at the sale price. Run the AOAO fee, ask for the last three years of board meeting minutes, and ask directly whether a special assessment is being discussed. This single step has saved more than one client from a five-figure surprise in year two of ownership.

Utilities and groceries: the imported-island tax

• Electricity: Hawaiian Electric's residential rate is still the highest in the nation. A condo with minimal AC use might run $100–$180/month; a larger single-family home with regular AC can run $350–$600. Homes with rooftop solar and net metering routinely cut that to $40–$120.
• Water/sewer: $80–$180/month for a typical household.
• Internet and cell service: budget $180–$300/month combined for a household of two or more.
• Groceries: roughly 50% above the national average, driven by the fact that most food arrives by container ship. Expect $550–$750/month for a single adult, $1,000–$1,400 for a couple, and $1,500–$2,200+ for a family of four, before any Costco or farmers-market discipline.

Transportation

Gas has been sitting in the high-$4 to mid-$5 range per gallon statewide, with Oahu typically on the lower end and the neighbor islands running higher. Insurance, registration, and the near-mandatory second car per adult (public transit coverage is good in town, thinner as you move toward Hawaii Kai and beyond) push most households to budget $400–$700/month in total transportation costs once gas, insurance, and parking are included.

The angle most cost-of-living posts skip: what it costs to own a vacation rental condo

Because a large part of my business is Oahu short-term vacation rental (STVR) condos, I get this question constantly and it's genuinely absent from most cost-of-living content, which is written for people moving here to live, not to invest. If you're weighing a legal STVR purchase, the real monthly carrying cost stack looks different from a primary residence:

• Transient Accommodations Tax: 10.25% of gross rental revenue, on top of the General Excise Tax
• General Excise Tax: 4% state plus a 0.5% county surcharge on Oahu, applied to rental income
• Property tax at the hotel/resort classification, which runs meaningfully higher than the owner-occupant residential rate
• Property management fees, typically 20–30% of gross revenue for full-service management
• AOAO fees, which tend to run higher in condo-hotel and resort-zoned buildings than in standard residential buildings

None of this means the math doesn't work — plenty of these properties cash-flow well — but it means the "cost of living" framing that most sites use doesn't apply. If this is the path you're considering, it deserves its own conversation before you write an offer, not a spreadsheet built off a generic cost-of-living calculator.

Why this matters more than the sticker price: Hawaii is losing people over it

This isn't just an affordability talking point — it's showing up in the data. The University of Hawaii Economic Research Organization found that Hawaii has lost more residents than it has gained in 23 of the past 25 years, and their analysis points to something sharper than "it's expensive": wage growth simply hasn't kept pace with costs. Hawaii's public school system is feeling it directly — there have been recent, specific cases of teachers on Oahu losing housing mid-lease with 45 days' notice and struggling to find anything else they can afford, to the point of considering leaving the state entirely.

I bring this up not to scare anyone off, but because it's the honest backdrop behind every "what salary do I need" conversation. The math genuinely does not work for every household, and pretending otherwise doesn't help anyone make a good decision.

What income actually makes this work, realistically

For East Honolulu specifically, given the housing numbers above:

• Single adult, renting a condo: $90,000–$110,000 comfortably
• Couple, renting or owning a condo: $150,000–$190,000 combined
• Family of four owning a single-family home in Hawaii Kai or Kaimuki: $220,000–$300,000+ combined
• Family of four in Kahala or Diamond Head: this is genuinely a different income bracket, often well north of $350,000 combined unless there's significant existing equity or family assistance

For a lot of local, multi-generational households, the math works differently — three generations sharing a property is a real and common strategy here, not a workaround. For someone relocating without that network, the numbers above are the honest floor for this side of the island.

What actually moves the needle if you're trying to make it work

• Consider a condo over a single-family home as your entry point, but budget the AOAO fee like a second mortgage payment, not an afterthought
• Ask about first-time homebuyer programs through the Hawaii Housing Finance and Development Corporation before assuming you need 20% down — several down payment assistance options exist, though it's worth understanding these are typically structured as forgivable second mortgages with occupancy requirements, not simply cash
• If you're buying, get quotes on rooftop solar before you close — it's one of the few costs in Hawaii where the return on investment is genuinely fast
• Kaimuki and parts of the Ewa/Kapolei corridor remain the most realistic entry points if East Honolulu proper is out of reach on your current budget
• Get pre-approved with a lender who actually understands Hawaii's condo insurance and AOAO underwriting quirks — a mainland lender unfamiliar with special assessment risk can slow or kill a deal

Let's run your actual numbers

Generic calculators are a starting point, not a plan. If you're weighing a move to East Honolulu, deciding between renting and buying, or looking at an STVR condo purchase, I'm happy to walk through your specific numbers — no script, no pressure. Reach out to The Kawaguchi Group and let's figure out honestly whether the math works for your situation.

Sources: Hawaiian Electric residential rate filings; U.S. Bureau of Labor Statistics Honolulu Consumer Price Index; Honolulu Board of Realtors MLS data; University of Hawaii Economic Research Organization (UHERO) 2026 Hawaii Housing Factbook and migration research; Hawaii News Now reporting on teacher housing and out-migration; Hawaii Department of Taxation (GET and TAT rate schedules); Hawaii Housing Finance and Development Corporation program materials. Neighborhood rent and sale figures reflect current East Honolulu market activity as tracked by The Kawaguchi Group.

Hawaii's real estate market just got a reminder of how much international money can move the needle. A handful of massive land sales to Japan-based buyers pushed the state's commercial investment total to nearly $3 billion last year, and industry analysts are forecasting another 20% jump in deal activity this year. For everyday buyers and sellers, this isn't just a headline about hotels changing hands. It's a signal about confidence in Hawaii property, and it has ripple effects that reach well beyond Waikiki's resort corridor.

The Deals Behind the Headline

According to Colliers Hawaii's investment review, summarized by Pacific Business News, the state saw about $2.96 billion in commercial investment sales, driven overwhelmingly by a small number of oversized land transactions rather than broad-based buying. The single biggest was the sale of the land under the Royal Hawaiian Hotel in Waikiki for roughly $510 million, purchased by Japan-based Daisho Co. from Kamehameha Schools. The ground beneath the Four Seasons Resort Hualalai on the Big Island sold for around $400 million, and most of the land under the Hyatt Regency Waikiki changed hands for about $215 million. Together, these three deals alone accounted for more than a billion dollars of Japanese capital moving into Hawaii real estate in a single year.

Why Japanese Buyers Are Coming Back Now

Japanese buyers have historically been the largest group of foreign purchasers of Hawaii real estate, with the overwhelming majority of that activity concentrated on Oahu. That flow slowed considerably over the past decade as a weak yen made Hawaii property more expensive for Japanese buyers to acquire. What's notable about this latest wave is that it's happening anyway, largely because institutional investors view Hawaii real estate as a durable, dollar-denominated asset that holds its value regardless of currency swings. The state's Department of Business, Economic Development and Tourism underscored just how deep this relationship runs, releasing a comprehensive report in May detailing economic ties between Hawaii and Japan across tourism, housing, and several other sectors.

It's Not Just Hotels

While the biggest dollar figures are tied to resort land, the same appetite is showing up in smaller residential-adjacent deals too, including multifamily apartment buildings in neighborhoods like Makiki changing hands to Japan-based buyers this year. That matters because it suggests interest isn't limited to trophy assets on the beach. Local owners of well-located multifamily and mixed-use properties, particularly on Oahu, may find themselves fielding more inquiries from overseas capital than they have in years.

What This Means If You're Selling

If you own an investment property, a small apartment building, or land with redevelopment potential in a desirable Oahu location, this is a good year to have your property professionally valued, even if you weren't already planning to sell. Increased competition from well-capitalized buyers can support stronger pricing, particularly for fee-simple parcels and income-producing properties that institutional buyers favor. It's also worth understanding whether your property sits under a ground lease, since fee-simple sales like the ones driving this trend behave differently in negotiations than leasehold transactions.

What This Means If You're Buying

For most everyday buyers shopping for a single-family home or a condo to live in, this trend won't directly compete with you at the negotiating table since institutional and foreign buyers are overwhelmingly focused on large commercial and resort-adjacent assets. But it's still worth watching as a confidence indicator. When sophisticated investors are willing to put a billion dollars into Hawaii land in a single year despite a challenging currency environment, that's a vote of confidence in the long-term value of Hawaii real estate that can support prices across the board over time.

The Bigger Picture

Colliers isn't predicting an uninterrupted boom. The firm has flagged rising fuel costs and geopolitical tensions as risks that could cool travel demand and investor enthusiasm going forward, and tourism trends still set the tone for a lot of island real estate. Still, a billion-plus dollars of fresh Japanese capital landing in Hawaii in one year, after a decade of decline, is worth paying attention to whether you're weighing a sale, sizing up an investment property, or just trying to understand why certain corners of the market feel more competitive than the headline statistics suggest. Reach out anytime if you want to talk through what this kind of capital flow could mean for your specific property or plans.

This summer, Governor Josh Green signed a bill that quietly reshapes one of Hawaii's more promising ideas for getting local families into homes they can actually afford. Act 121 amends the state's 99-Year Leasehold Program, the framework behind a planned 370-unit condo project in Kaka'ako that had stalled out because almost nobody wanted to buy into it under the original rules. If you've been priced out of Oahu's market, or you're watching from another island wondering whether something similar could show up near you, this law is worth understanding now, before the next round of pre-sales opens.

What Act 121 Actually Changes

The 99-Year Leasehold Program lets the state and counties lease publicly owned land to a developer for affordable, owner-occupied condos, which keeps the land cost out of the purchase price and should make units cheaper than comparable fee-simple condos nearby. The catch in the original 2023 law was that every unit, market-rate and reserved alike, had to stay owner-occupied for the full 99 years, with no path out. Act 121 narrows that requirement to just the reserved, income-restricted units and shortens the owner-occupancy commitment to 10 years instead of forever. Market-rate units in the project still have to be offered to owner-occupants first, but if they don't sell within 60 days, up to 40% of them can go to any Hawaii resident, occupant or not. The law also tightens up eligibility rules and affordability safeguards so the reserved units stay reserved for the income bracket they're meant to serve.

Why the Original Deal Fell Apart

The Hawai'i Community Development Authority bought two Kaka'ako parcels, the old Jack in the Box site on Kapi'olani and the Galiher building on Ward Avenue, back in January 2025 for this project. Sixty percent of the planned 370 units are supposed to go to households at or below 140% of the area median income, which works out to about $212,800 for a family of four in Honolulu, with the rest sold at market rate. But once the numbers got run against nearby fee-simple listings, the perpetual owner-occupancy clause made the leasehold units a tough sell. Rising construction costs had already narrowed the price gap, and buyers weren't willing to give up resale flexibility forever to save a shrinking amount of money. The project paused at the end of last year as a result.

What This Means If You're House-Hunting on a Budget

If you've been counting on Hawaii's income-restricted or workforce housing programs to make ownership possible, this is a program to watch rather than one to act on tomorrow. HCDA still needs market conditions to cooperate before it restarts pre-sales, and there's no firm date yet. What's notable is the intent behind it: this is part of a broader push, tied to Senator Stanley Chang's ALOHA Homes initiative, to use public land as a lever against Hawaii's land-cost problem. If the Kaka'ako pilot works, the plan is to replicate the model on other HCDA-owned sites, which could eventually mean similar projects beyond this one corner of Kaka'ako. Worth asking your agent to flag you when reserved-housing pre-sales open, since these units typically move through a lottery or application process rather than the open MLS.

The Rest of the Market Hasn't Slowed Down

This law lands in a market that's actually picking up speed in the conventional segment. Honolulu Board of REALTORS data for July shows O'ahu single-family home sales up 20.5% year-over-year with the median price at $1,224,500, and homes are moving fast, a median of just 14 days on market compared to 20 days a year ago. Condos are also selling quicker. Meanwhile the 30-year fixed rate averaged 6.66% at the end of July, still elevated but not the story it was a couple of years ago. Other islands are telling different stories: Maui's condo market is rebounding sharply on price cuts while its single-family segment softens, and the Big Island is seeing strong dollar-volume growth in its upper price tiers. None of that changes what Act 121 does, but it's the backdrop against which "affordable" gets defined, and it's a reminder that timing and location both matter more than any single headline number.

None of this happens overnight. Legislation like Act 121 removes a real obstacle, but a stalled pilot project still has to clear market conditions, financing, and construction before anyone moves in. If affordable ownership pathways matter to your plans, keep an eye on HCDA's announcements and talk to an agent who tracks reserved-housing programs specifically, since eligibility windows tend to open and close fast. And whether you're chasing a leasehold unit in Kaka'ako or a fee-simple home on another island, the fundamentals haven't changed: get pre-approved early, know your real monthly number, and don't assume this year's headlines apply evenly across every neighborhood.

If you've been waiting for one clean headline about where Hawaii real estate is headed, the latest numbers won't give it to you. Fresh market data released this August shows the four major islands moving in almost opposite directions at the same time, while mortgage rates continue their slow grind upward instead of the relief many buyers were hoping for. Whether you're shopping for a first home, thinking about listing, or eyeing an investment property, the island you're looking at matters more right now than any statewide average.

Mortgage Rates Are Drifting Higher, Not Lower

After dipping below 6% back in April, 30-year rates have crept back up to roughly 6.5-6.7% as of late August. The driver isn't runaway inflation, which actually came in right on target last month, but a Federal Reserve that remains genuinely split on what to do next. At its late-July meeting, the Fed held rates steady on a 9-3 vote, with three members pushing for an increase. A surprisingly weak jobs report, including a loss of 23,000 jobs in July, has since taken most of the September hike talk off the table, but forecasters at the MBA and Fannie Mae both expect rates to settle in the mid-6% range through the end of the year rather than fall back toward 6%. For buyers, that means the "wait for lower rates" strategy is looking less like patience and more like a gamble. If your monthly payment pencils out today, there's little evidence a meaningfully better rate is coming before year-end.

Oahu Keeps Absorbing Demand Without Overheating

Oahu remains the steadiest market in the state, and the latest year-over-year figures back that up: single-family home sales are up 23%, condo sales are up 8%, and both segments saw prices climb alongside the extra activity rather than through discounting. Single-family median prices rose about 10% and condo medians about 4.8%. Active listings held near 3,491 properties in July, a stable enough baseline that new buyers are being absorbed without inventory piling up unsold. Translation for buyers: expect continued competition on well-priced Oahu listings, particularly in the mid-range. Sellers here are in a genuinely strong position, but pricing still needs to be realistic, since well-priced homes are moving while overpriced ones sit.

Maui's Condo Market Is Roaring Back While Houses Cool

Maui is the most dramatic story on any island this year. Condo sales jumped 54% year-over-year, pushing total condo dollar volume up 72%, as buyers who sat on the sidelines during the past couple years of regulatory uncertainty and price softness moved back in to take advantage of earlier discounts. Single-family homes told the opposite story: closed sales fell 8.3% and the median price dropped 12%. If you're a buyer specifically interested in Maui condos, the window of easier pricing that fueled this rebound may be closing as demand returns. If you own a Maui single-family home and are weighing a sale, this isn't the moment to test the market with an aggressive list price.

Kauai and the Big Island Are Writing Their Own Stories

Kauai saw modest price softening across the board, with single-family medians easing about 1.4% to $1.2 million and condo medians down 5% to $900,000, even as sales activity ticked up slightly for homes. It's a market where patient buyers have a bit more room to negotiate than they did a year ago. The Big Island is the opposite case: condo sales volume stayed flat, but total dollar volume jumped 77% as the median condo price climbed 35%, driven by a wave of activity in higher-priced units. Single-family sales on the Big Island grew nearly 12% with active listings hitting a 12-month high of 1,346 properties, giving buyers there more selection than they've had in a while.

What This Means If You're Buying, Selling, or Investing

The takeaway isn't that Hawaii real estate is up or down this year. It's that "the Hawaii market" barely exists as a single thing anymore. Statewide inventory has held in a narrow band of roughly 6,000 to 6,200 active listings for a full year, but dollar volume is climbing because activity is concentrated in higher price tiers on several islands. If you're buying, get familiar with the specific island and price band you're targeting rather than reading national or statewide headlines. If you're selling, an agent who can show you comparable sales from the last 60-90 days on your specific island is far more useful right now than a general market narrative. And if rates are the thing holding you back, know that the data doesn't currently support waiting for a big drop.

As always, the fastest way to know what your situation actually looks like is a conversation grounded in current comps for your neighborhood and island, not a statewide average.