Let me take you back to October 2020. Hawai`’’s Governor Ige opens the state for travel again for the first time in seven months. Over those previous seven months, Americans had been closed up, cooped up, locked down, and restricted like never before in our country’s history. We knew that many people couldn’t wait to get out of their towns and cities, land in Hawai’i, and escape the pandemic. We just didn’t know how many. In those early weeks of October, the number of people arriving looked promising. Then as we got to the holidays the floodgates just opened. I don’t think anyone could have predicted that we would see that many visitors come to Hawai`i that quickly. I remember seeing a statistic of 42,000 visitors landing in Hawai`i in one day. That didn’t even happen pre-pandemic.
What followed next was an absolute frenzy on real estate. Everyone who was selling a home or a condo on this island was getting multiple offers. Even on the high-end properties and the super high-end properties. I was the listing agent for an $18 million home on the ocean in Mauna Lani Resort which had multiple offers. You see, everyone decided that a second home wasn’t just a luxury it was now a MUST. Never again were they going to be caught locked down in their city without an escape plan. Never again were they going to be restricted and if they were it was going to be someplace like paradise. They realized that never again did they have to work in an office, because their life is now virtual, and work can be done anywhere.
And now you say to yourself, DAN I know all of this; you’ve been saying it for quite some time now. What’s the point of the article? You see everyone, this exact same storm is brewing in Asia and all throughout Europe. Do you realize that we’ve seen the greatest real estate frenzy in the Hawaiian Islands EVER and we did it without ANY foreign investment?
The last few weeks I’ve had conversations with my friends and clients on Wall Street and those who work in all the big banks. They all tell me about their clients in China, Japan, Korea, in Germany, Italy, England, etc. cannot wait to get on a plane and escape their surroundings. Guess what? Hawai`i is high on their list. They’re not only coming, but they’re coming with FULL wallets. They are coming to buy a second home and they are willing to do whatever it takes to outbid you and purchase that house. Foreign investment is about to hit the islands in a tidal wave. There is not a timetable named yet to fully open international travel, but I can tell you it’s probably coming sooner rather than later. Countries like Japan, Korea, Canada, and French Polynesia are presently able to travel to Hawaii with a negative Covid test 72 hours before their flight, but they don’t. The reason is those countries have the US listed as a travel risk. In addition, if they fly home from the US, they are subject to a long quarantine in their home countries. The Biden administration is considering loosening international travel restrictions for the entire US coming up here at the beginning of November. I believe international travel will really hit its peak here in Hawaii beginning the first quarter of next year and into the summer of 2022.
Here’s the Takeaway. If you’ve been holding off on buying that second home here in Hawai`i, please do not wait any longer. If they fully open foreign travel, real estate here will be like a food fight in a middle school cafeteria. If you think it was hard to try to get a property under contract before because you’re competing against other mainland buyers, it’ll be 10 times worse. If you were concerned about paying full price or over asking that will seem like a bargain. And I’m not the only one sounding the alarm. I sat in on a presentation from a large title company here in the state that zeroed in on this very topic. The foreign tourists are coming, and they can’t wait to go shopping. What will you do?
Dan Polimino is the owner of the Hawaii Team in Kailua-Kona, Hawai`i. He and his team are the luxury residential experts for the Big Island. If you are thinking about buying or selling in
Hawai`i, then please reach out to us at team@thehawaiiteam.com or call 808-913-0899.
