For the past six years, Rosanna Lewis lived in a comfortable two-bedroom home on Maui.
She felt lucky to pay just $1,500 per month. The 54-year-old fashion designer and seamstress felt even luckier when the pandemic hit last year and she still managed to pay her rent despite having less work.
But her housing situation is being upended anyway. Her landlord decided to sell and in mid-May, Lewis got a 45-day notice. She must be out of the house by July 1. And she knows she’s not the only one.
“I’m a member of NextDoor Maui Meadows and there’s about eight to 10 people who (have) lived here forever and are saying, ‘Oh we’ve lived here forever and all of a sudden we’re told to leave,’” Lewis said.
Gov. David Ige suspended evictions in Hawaii for the past year due to the pandemic, but landlords have still been allowed to ask residents to leave if they’re selling their properties. That exception affected fewer people a year ago when Hawaii home sales stagnated as the pandemic discouraged many homeowners from selling.
But now, Hawaii’s real estate industry is shifting into overdrive. Low interest rates are enticing both Hawaii residents and people from out of state to buy. Workers from other states and countries who can now work remotely are moving to Hawaii. And high demand and high prices are encouraging investors to sell.
“You have this big pool of buyers who all have access to cheap money, all competing for a limited number of homes, driving the prices skyrocketing,” said Robert Vafaie, a Realtor on Maui. “Unfortunately local families who are renters are feeling the pinch.”
The frenzy is fueling seller incomes, realtor commissions and tax coffers. But it sometimes means renters are collateral damage as they are forced to find a new home. According to data from Apartment List, Hawaii rents statewide are increasing faster than the national average, although Honolulu rents have managed to stay mostly flat.
Vafaie said virtually all of his clients on Maui are out-of-state buyers, including a family that recently closed on a small house $25,000 over the list price. The buyers were from the Bay Area and for them, a three-bedroom two-bath home with ocean view at $825,000 was affordable. From Vafaie’s perspective, local Maui renters are not the people buying homes on the Valley Isle.
“If you’re a teacher or a policeman or say a landscaper or anybody who works in the service industry, how you can afford a $2,000 or $3,000 (monthly) rent let alone a mortgage payment is very impossible,” Vafaie said. “They have no place to move to. It’s a very unfortunate situation.”
The housing market is going gangbusters nationally with multiple cities facing a glut of buyers clamoring for limited housing stock. Hawaii is no exception.
On Oahu, the median sales price for a single family home was $980,000 in May, up 22.6% from the same month last year, according to data from Title Guaranty Hawaii. More than 400 homes sold, a more than 50% increase from May 2020 and a nearly 23% increase over the homes sold in May 2019.
Title Guaranty found that more than 600 condominium units sold on Oahu that month, 125% more than the same month a year ago and nearly 14% more sales than May 2019, the year before the pandemic.
Chad Takesue, a real estate agent with Locations Hawaii and vice president of its property management division, said most of his buyers on Oahu are local residents who live and work in Honolulu.
But whether they’re local or not, many people who own investment properties in neighborhoods like Waikiki are taking advantage of the fact that this is a good time to sell. In some cases, the eviction moratorium made their investment properties less lucrative as tenants fell behind on rent.
David Chee, an attorney for Hawaii landlords, said he’s been getting a lot more calls over the last six months from people who are selling their units and wondering how to end their tenancies. Chee said the eviction moratorium has made it riskier to be a landlord and that, plus higher home values, is incentivizing some to sell.
But Vafaie on Maui thinks the effect of the moratorium is “minuscule” compared to how limited supply and huge demand are driving up prices.
Takesue said some landlords he has worked with have given their tenants the first opportunity to purchase.
That’s a challenge however as the uptick in home sales is coinciding with rising prices. On Kauai, the median home price hit $1.125 million in May. Still, home sales were up 245% compared with May 2020, and up 23% from two years ago, according to Title Guaranty housing market reports.
On Hawaii island, the median home price was half a million dollars in May, up more than 35% from a year ago. Home sales almost doubled compared to a year ago and exceeded May 2019 by nearly 19%.
Maui County was the only area in the state with fewer home sales in May 2021 than 2019, but not by much. Real estate agents say low inventory driven by years of limited development plus extraordinary demand is driving up prices and competition.
“We have a desperate situation here on Maui,” said Rep. Tina Wildberger from the Valley Isle. “They (landlords selling their units) are kicking their tenants out and the tenants are unable to find housing (even) remotely comparable to what they were living in.”
Lauryn Rego, a single mom with a 4-year-old, is one of the fortunate ones. The day her landlord called her to inform her the property was going to be listed in Haiku, Rego cried and immediately posted on Facebook that she was looking for a new spot.
She remembered how tough it was when she last looked for a place with her then-newborn and how few landlords wanted to rent to someone with a child, even though it’s illegal for landlords to discriminate against families. But this time, Rego lined up a new place faster than she expected, although it was more expensive.
“I’m moving from a two-bedroom at $1,650 to a one-bedroom at $2,050 so that’s concerning,” she said. Still, she’s so grateful she has a place to land, especially when she looks on Facebook and sees so many of her friends hunting for new rentals.
“I’ve never had so many people looking for a space at the same time,” she said.
The number of renters who are looking for a new place to live could rise in a couple months since Ige said he’ll lift the eviction moratorium in August.
Already, Vafaie describes what’s happening to Maui housing as a crisis.
“Most real estate agents like me who have been on the island for a long time feel for the local people but honestly the market is dictating who the buyers are,” he said. “It’s a good time to be a real estate agent but also you see some heartbreaking stories.”
So far, Lewis from Maui Meadows hasn’t had much luck finding anything else.
She met one landlord who was concerned about the fact that Lewis was vaccinated against COVID-19. She hasn’t heard back yet from other places she applied to.
“I don’t know where I’m going to go,” she said. “I just pray.”