Of all the Hawaiian Islands, Oahu really stands apart as an impressively lush and scenic island. Most people come to Oahu, and Hawaii in general, for the beaches. But the real treasure of Oahu is the abundance of incredible hikes offering all manner of natural beauty. We loved the ridge hikes the best, where you experience tropical, jungle surroundings, on your way to eventually reaching a summit with spectacular views.
And yes, there are plenty of beaches too. Beaches that are not only beautiful and inviting, but many more of them than the other Hawaiian islands. Some are long and wide, and attract large crowds (I’m thinking Waikiki), but many are small and tucked away in secluded coves, local residential areas, or nestled against steep, verdant mountainsides. In addition to hiking and enjoying the beaches, Oahu also offers everything else that one might want to enjoy on a Hawaiian vacation or part time living experience, including fishing, snorkeling, surfing, golfing, and the lively city living of Honolulu.
Unfortunately, because Oahu has all the above mentioned attributes, its population has grown to over one million people. Compare this to Maui, which is about the same size as Oahu, yet has only about 160,000 people. Oahu’s population density certainly has an effect on traffic. Even on week days, we were always in a continuous flow of cars. As long as there wasn’t anything unusual going on, the flow usually moved pretty good. You just get into your place in the stream of cars, and follow the car in front of you till you reach your destination. But if anything unusual intervenes, such as school traffic (especially at 2:00 pm when school is out), road work, or rush hour, you may find yourself completely stopped, sometimes for half an hour or so.
As we drove around Oahu and explored its many different and distinct areas (Honolulu, Diamond Head, North Shore, East and West side), we found ourselves increasingly enchanted with the island, despite the traffic. Once you get to wherever you want to go, whether it’s a beach, small town, trailhead to a waterfall or ridge hike, you will be transported to another world and you will be mesmerized by the island’s beauty.
So, although it’s more crowded than other Hawaiian islands, we still like the idea of part time living here. It just has too many positive attributes that outweigh the negatives.
Interest rates are still high and this continues to have a negative effect on all real estate prices in the country, including Oahu. If a buyer is willing to take on a high interest mortgage, or can pay cash, they will have plenty of bargains to choose from. But this isn’t the only dynamic playing out in Oahu.
Another dynamic that has been on-going for two years now, is the push for further controls on short term rentals. There have been attempts to disallow short term rentals of less than 3 months for all properties in Oahu except in designated resort areas. This already is having a huge impact on the Oahu real estate market, much more of an impact than higher interest rates. Suddenly, that condo that was generating 30 or 40 thousand a year from short term rentals, may lose almost all their rentals from tourists. Cash flows would go down dramatically, and many people that were making consistent positive cash flows from their condo or house rental, will likely not see any rental income. I think short term rental restrictions will cause a huge number of owners to sell their condos, and prices can only go one direction with this increase in inventory and reduction in demand.
As an example of what is ahead, the house we rented for a month was a beautiful 3 bedroom house right by the ocean on the windward (East) side near Kahaluu. It rented for $250 a night, which was a really good deal considering that small 2 bedroom condos with ocean views in Waikiki would rent for about twice that amount. I’ll take the house any day! But soon, it may not be possible to rent that house for less than three months! And I am sure the price per night will probably come down well below $200, assuming the owners decide not to sell!
Honolulu
The Honolulu area could be further divided into the downtown area and the suburbs that have spread out from the city into the many valleys surrounding Honolulu. Since traffic can be heavy at many times during the day, we think maybe getting a condo in the Honolulu downtown area could be fun. You could walk to all the shops and restaurants, and still drive out to other parts of Oahu when it’s less busy.
In downtown Honolulu, prices generally are affected by views of the ocean, proximity to Waikiki beach or Diamond Head, and of course, condo size and amenities. If you can look a little further away from the shoreline, accept a view of the mountains rather than the ocean, you can find decent prices around Honolulu.
Looking at a current map of homes and condos for sale in downtown Honolulu, there is an incredible variety in price, much more than most places. I can find a small, studio apartment, with 323 sq feet, for $112,000. On the other extreme, there is a gorgeous 2 bedroom condo with a great view, for almost $2,000,000. I am seeing many listings that have reduced their asking price. I think it is the start of the correction. But it has a ways to go yet.
As of June, 2024, you could find a decent 1 bedroom condo for under $500K, and I found some pretty nice 2 bedroom condos for a little over $600K. Of course, as your views get better, or your square footage increases, prices get much higher. HOA fees seem to average about $800/month. Rents for apartments or condos in and around Honolulu in the nicer areas are between $2,000 and $3,000 per month for 2 or 3 bedrooms. Not many homes are for rent in the suburbs around Honolulu. The ones that are advertised are from $3,000 to $5,000 per month.
Diamond Head
Diamond Head is one of my favorite areas in Oahu. It’s close to Honolulu, but has a really nice neighborhood feel and lots of big parks, walking and biking paths, and proximity to plenty of beaches, shops, restaurants, and hikes.
But prices are much higher here than in downtown Honolulu, and there aren’t a lot of places for sale, especially condos. Homes are in the millions so we won’t even consider them. Maybe when the real estate dynamic plays out later this year there will be some decent inventory opening up. I’ll keep my eye out in this area and hope something reasonable comes up.
Windward Side
Along the windward side, the climate is ideal, with an almost ever present cool breeze, plenty of rain to keep things nice and green, and many of the interesting places in Oahu are close by, such as Kailua, Lanikai Beach, North Shore area, and Diamond Head. Even Honolulu isn’t much more than a 30 minute drive away. Tons of beaches can be found all along the coast, and the mobile restaurant scene is unbelievable. Fantastic food at very good prices. Why cook at all?
But, as with Diamond Head, there are not many condos for sale, mainly as there really isn’t much of an inventory. This part of the island is mostly single family homes along the shoreline areas, and homes and apartment buildings within the small towns. As for home prices, there are not many under a million, and if they are, they are not very desirable.
North Shore
We liked the North Shore area of Oahu a lot, and made many trips from our rental house along the windward coast to this part of the island. It’s a more laid back part of Oahu, with interesting little towns, beautiful beaches, the best snorkeling, and amazing sunsets! It’s also a very scenic drive getting there, with plenty of beaches, mobile food trucks, shops, parks, and trailheads into the lush jungle mountains that are an ever present reminder of what a special place Oahu is. And as you go further north along this coastal road, you just feel like you want to keep going and see what lies further up the road. Every trip we made, we discovered new places to explore, or secluded beaches to just soak it all in. This is definitely a part of Oahu where we could live part time. Sure, it’s much further away from Honolulu and all the attractions near there, but when you are in the North Shore area, you don’t really care!
Unfortunately, this part of Oahu is also very popular and prices are high. Just as with the Windward Side and Diamond Head, there are very few condo units available, and I didn’t see any for sale. This part of the island is mostly single family homes, and they are not cheap. Even if they are set way back from the beach, they typically are priced over a million. The few properties under a million were small, on unappealing lots, and had no views of the ocean. Oh well, as I have mentioned, we can wait till the big readjustment occurs later this year.
West Side of Oahu
This is the dry, hotter side of Oahu. There are decent beaches, some quite spectacular, but it’s much drier on this side, so the beaches have less shade trees, the hillsides are somewhat dry and barren, and there is just a feel that you are almost in a desert if it weren’t for the beaches. The small towns are a little run down and uninviting, so consequently, the properties are much cheaper. Not only is this side of the island quite dry and less scenic than the rest of the island, you are also far from all the good beaches, hikes, and Honolulu city life. When we visited Oahu, we took one drive along the west coast, checked out many of the beaches, and we pretty much decided we’d probably never come back to this part of the island.
But, if getting a property at a low price is your priority, this would be the part of Oahu to search. There are single family homes from $500,000 on up, condos and townhouses from $300,000 on up.
Hope you found my blog helpful. And I hope you can come out and experience this wonderful island for yourself. You won’t regret it.
Aloha!
