There are a number of reasons for Hawaiʻi’s high housing costs. One factor some people talk about is buyers from outside the state. But the truth is a bit more complicated.
You’ve heard it said, maybe even said it yourself, that outside buyers drive up the cost of housing in Hawaiʻi. There’s just one problem with that diagnosis. It doesn’t seem to be true, according to statistical analysis by the public policy think-tank Grassroot Institute of Hawaii.
Researchers there looked at Bureau of Conveyance records on home prices, and tax assessment records for cities in Hawaiʻi as well as across the country. They found no correlation between the proportion of outside buyers and home prices.
In Hawaiʻi, the proportion of out-of-state buyers to local buyers actually declined from 2008 to 2021, even as prices increased.
Looking nationally, Washington, D.C. had the nation’s second-highest median home price in 2020 at $618,000 — just behind Hawaiʻi — with barely 5% of buyers coming from out of state.
California, with the nation’s third-highest median home price, had fewer than 2% of its buyers from out of state.
Meanwhile, states like Maryland and Delaware had outside buyer rates comparable to Hawaiʻi’s, at 19%, but home prices close to the national average of $245,000.
Grassroot Institute President and CEO Keli‘ Akina hopes the data can help policymakers focus on more pressing causes of Hawaiʻi’s high home prices.
