It’s no secret that the price of paradise is weighing more heavily on the shoulders of Hawaii residents every year.

Struggling To Get By project badgeThe compounded effects of high demand and land scarcity have created an increasingly problematic future for potential homeowners. Oahu sales were up by nearly 40% in 2021 with more than half of single-family home sellers receiving more than the original asking price.

While this is not a new problem to Hawaii, the impact is taking an increasing toll on lower-income and middle-class families, forcing many to reconsider their future in the islands.

More than a third of Hawaii residents have volatile incomes that vary month to month, making it exceedingly difficult to make consistent payments for housing, a Financial Health Survey found.

So, how long can prices climb before Hawaii’s already declining population dwindles even more?

Last summer set records for real estate on Oahu, with single-family home sales up 18% and condominium sales up 53% from 2020. While homes lingered on the market for 25 to 30 days in 2019, the average for 2021 was nine days.

Calculating Work Hours Needed To Own A Single-Family Home

How Many Hours Do I Need To Work To Afford A Single Family Home?

Move the hourly wage slider to see how many hours you’d have to work to afford the monthly mortgage of $3,819 for a single-family home on Oahu at an interest of 4% for a 30 year-fixed mortgage. The results for many workers will show they’d have to work more than 24 hours a day to afford a mortgage — an obvious impossibility.

People would need to make between $60 and $70 an hour, working 40-hour weeks, to put only 30% of their earnings towards a monthly mortgage for a single-family home on Oahu. But wages in Hawaii's service, construction, retail and manufacturing sectors all fall well below that.

One example: The average hourly wage for a service worker in Hawaii is about $17, according to data from UHERO, so if that worker put their entire paycheck toward housing — not paying for gas, food, clothes or other necessities — they would need to work 10 hours five days a week. And if that worker only dedicated 30% of pay toward a mortgage, they'd need to put in 33 hours per day — and we all know there are only 24. And unfortunately, paying rent is not much less of a burden for workers.

Nearly 40% of Hawaii residents are renters, and during the pandemic locals found themselves losing out on options as more people from out of state drove demand for rentals. In 2021, the fair market rent -- determined by the United States Department of Housing and Urban Development -- for a two-bedroom rental was $2,240. To afford this level of rent and utilities — while paying no more than 30% of income on housing — a household must earn around $80,000 annually.

One way to reduce housing costs is living in multi-generational homes. In fact, one in five people in the state live in a multi-generational household, according to  the Hawaii Data Collaborative. But a survey from the National Disaster Preparedness Training Center and the Pacific Urban Resilience Lab found that large households can lead to emotional and social strains, especially during the pandemic when families faced difficulty finding space to isolate when sick.

The Financial Health Network found that 81% of people living in extended households have poor financial health — one-third of households earn incomes less than $40,000.

As homes become scarcer, the competition reaches new levels. Chad Takesue, president of the Honolulu Board of Realtors, attributed scarcity to three major contributors: lack of development, historically low interest rates and high demand from local buyers — 75% of the total in 2021 — as well as mainland and international buyers.

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