Fantasizing about living in Hawaii during the pandemic puts you in good company: Oracle ( (ORCL) - Get Oracle Corporation Report)'s Larry Ellison, Meta (FB)'s Mark Zuckerberg and Amazon ( (AMZN) - Get Amazon.com, Inc. Report)'s Jeff Bezos are some of the billionaires who bought land along its scenic shores since the outset of the COVID-19 pandemic.
This desire to live by the waves at a time of mass lockdowns has fundamentally altered the state's real estate market.
An analysis from the Wall Street Journal found that there were 64 sales over $10 million on the main islands that make up Hawaii in 2021 and only 10 in 2020. Due to a number of high-profile deals like Bezos' $78 million purchase of a 14-acre Maui estate, sales above $10 million added up to an aggregate $1 billion compared to just $150 million in 2020.
"It's like nothing anyone has ever seen before," Hawaii Life CEO Matthew Beall told the WSJ. "It's almost like a hot nightclub. It's not can you get a deal, it’s can you get behind the rope and to the door."
Along with the richest of the rich, there is also a rush of affluent buyers with a newfound ability to work from anywhere — in September, home prices on the most populous island of Oahu hit a record with a $1,050,000 average, a 25% increase from prices a year ago.
While luxury real estate moves at its own pace, Hawaii's popularity is creating supply issues for homes that are less expensive.
There often is not enough inventory to meet the demand of both locals and out-of-towners. As homeowners hold on to properties in the hopes of seeing value grow, locals can be left unable to compete with ultra-wealthy buyers from out of town and are ultimately priced out of neighborhoods.
"People are knocking on sellers’ doors and saying, 'What would you consider?' Compass agent Roni Marley told the WSJ.