Steady second home market expands Hawaiian real estate boom
In an already diverse real estate scene, perhaps there is no market more unique in the United States than in Hawaii.
Fueled by affluent out-of-state buyers, the demand for second home real estate is outpacing any other part of the country. According to Hawaii’s chief economist, nearly a quarter of Hawaii’s homes have been purchased by non-residents.
This continued interest in Hawaiian real estate by mainland residents and foreign buyers has, in part, pushed the luxury sector to new heights. High-end sales to date across the state have surpassed the previous year, according to the latest luxury Hawaii market report from leading brokerage Hawai’i Life.
As a result, many Hawaiian real estate agents are seeing unprecedented sales volumes, outperforming those in much larger markets and placing them among the best real estate agents in the country. One such customer, Neil Norman, is regularly ranked as the top production agent in Hawaii and was recently ranked 29th in Real Trends’ The Thousand, a national ranking of the 250 best single agent agents in the United States ranked by sales volume.
Having moved to Hawaii as a surfer more than 25 years ago, Norman has since become one of the most sought-after agents in the state, specializing in luxury real estate on the island of Kauai. As a manager at Hawaii Life, Norman and his team have raised more than $3 billion in sales, including more than $385 million in turnover in 2021. Notable recent transactions include the $11.9 million vacation home sale of Carlos Santana.
In my ongoing coverage of the global real estate scene, I spoke with a Kauai expert about his successes and how he believes the market is changing at Garden Isle. His comments have been edited for clarity.
How has the market changed in Kauai over the past few years?
Fortunately, and unfortunately, buyers have discovered the north shore of Kauai, so everything continues to rise at a rapid rate. It is a small rural area and there is a severe scarcity but the demand for it is high. There was more tourism here than the pandemic and people found out that they didn’t have to be at work anymore and that they could live in this place they had always dreamed of living in. There’s a great deal of going between places like Aspen and Jackson Hole or Telluride, where it’s just the same idea, instead of snow, we have waterfalls.
Is there any concern that the rise in popularity will cause the region to lose some of its charm?
There are strict zoning and building regulations along with the only way to get in and out of the two-lane road, so it’s totally protected, and I don’t think that’s going to change. The reason people come to Kauai versus Maui is because it’s more relaxed. There are really no multi-family condos, almost no hotels – it’s raw natural beauty here.
How is the luxury goods market in Hawaii different from that in the United States?
There is little speculation in our market. People don’t come here and build houses to sell them. Lots of people come here and can’t find a nice new home – I’ve only sold a few new homes in the 35 years of doing so. A lot of the market buys a vacant plot and builds something that perfectly suits the buyer.
For the most part, I’m in a second home market. So, I sell people things they don’t need, and I sell things they want. In markets like California, there are often necessities associated with buying a home, such as living close to where you work, and necessities can mean more money. For a beach community like Malibu, if you want a few acres on the water or near the water, it’s 50 million to 100 million dollars. Now, to get something like that here, you’d pay half, if not a quarter less than that, and what you’d get would be pretty cool.
I’ve been time and time again the highest-producing medium in Hawaii. What do you attribute to your success?
I think I have a set of skills that really work with what I do. I’m looking forward to site planning or renovation – because I’ve been in the construction business – and I love negotiating too. There have been projects with complex issues with locations and entitlements and I’ve had a lot of experience navigating them and negotiating with someone to find their dream locations, and I’d love to do that.
I also have a great staff. We work hard to find our clients in the right niche and this hard work is how we get referrals.
Any spot recommendations for browsing?
Needless to say, Kauai is a world surfing location – but Fiji, Indonesia, Central America and South America will always hold a special place in my heart.
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