Building Costs Per Square Foot in the State of Hawaii, USA

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Hawaii 73-4449 Hane Street Kailua Kona Hawaii County HI96740 - 4 Beds and 3 Baths on Gross Floor Area 2608 sqft - Built in 2021 - Price $1,895,000 A

Newly Built House in Hawaii 73-4449 Hane Street Kailua Kona Hawaii County HI96740 – 4 Beds and 3 Baths on Gross Floor Area 2608 sqft – Built in 2021 – Price $1,895,000 A

Residential Construction Market Analysis in the State of Hawaii, USA

Building costs are 20% above the national average in the state of Hawaii, 3% lower than Alaska and 8% higher than Massachussetts. It’s the second most expensive state to build a house in the USA. Hawaii is an archipelago located in the middle of the Pacific Ocean that makes up one of the island states of the United States. With a total population of 1,211,537 inhabitants, this group of islands represents one of the most important tourist destinations in Polynesia. Its capital is Honolulu, which is, in turn, the largest and most populous city on the entire island (located on the island of Oahu).

Its beaches and paradisiacal landscapes attract millions of tourists year after year, but many people who are looking to live in this natural paradise also arrive. The real estate market has been moving a lot this last year with houses coming in and out of the listings quickly, and with a trend pointing towards the production of luxury homes.

In this article, we will focus on the real estate market and residential construction in Hawaii, although it is important to note that the real estate market focused on tourism is something that stands out to a great extent in Hawaii. Continue scrolling down as we will show you more about construction in Hawaii, how the market is doing, and what trends can be expected in the near future.

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Hawaii Construction Outlook

To understand the construction of a place it is always necessary to have some knowledge about residential construction. In the case of Hawaii, the temperature does not vary much from one season to the next. In fact, it could be said that it has only two climatic seasons: summer and winter. The coldest weather in winter is approximately 10°C, so it is not very cold either.

This means that most of the constructions are made of wood or quite basic materials. The climate is usually a bit humid so the houses have large windows to be ventilated.

There are no large buildings beyond the hotels since the constructions are usually one-story houses. The latter also changes in the most luxurious neighborhoods, where the houses are usually made of brick and cement, and of large sizes, something that does not happen in the middle-class residential neighborhoods where they are small and more modest houses.

Hawaii Housing Market Analysis and Forecast

The Hawaii real estate market has always been characterized by high prices, but this does not make it impossible to buy, sell or invest. On the contrary, the real estate market has been enduring quite well the crisis that is taking place at the national level.

Thanks to the quarantine, there has been a revaluation and boost in home sales in places like Hawaii, where it is possible to telecommute or run your own business and enjoy incredible views and activities impossible to do in the city at the same time.

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Currently, in Hawaii, there is a lot of demand and little supply of properties since there are not many listings and the ones that are selling quickly. When you are looking to buy you will be faced with other buyers who may outbid you by other home buyers who offer all cash, large deposits, or above the asking price.

Another factor that is affecting the real estate market is mortgage rates and their increase. The fact is that mortgage rates rose above 5% for the first time in more than a decade, nearly double what they were a year ago. However, this is not even close to the historical maximum that occurred a few decades ago, when the value was above 10%, so it is not something so worrying, but it does influence. Furthermore, even with that increase, mortgage rates have been at record lows for the past two years, leading to strong demand for real estate and record home prices.

Average values ​​are not very reliable in Hawaii, as there is a wide disparity between house prices in luxury or tourist neighborhoods, as opposed to the suburbs. To give you an idea, some plots of more than 4,000 square meters in the private community of Hokuli’a cost about 7.5 million dollars and in Kohanaiki a house of 22.5 million dollars has just been put up for sale. Dollars. While in other neighborhoods you can get a house for less than $600,000.

Hawaii Average House Price (Median Home Price)

The value of an average median home is $860,000, making it the most expensive state. Not only is the average the highest, but for that price, you get a fairly small property (averaging 1,309 sq. ft.).

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The price varies a lot depending on where you are. In fact, the median price of a single-family home on Oahu is currently $1,105,000. Luxury homes easily exceed $3,000,000 in value. These values are due to what we talked about earlier in the relationship between supply and demand, and the use of most of the properties for tourism.

However, not all properties cost a fortune. If you move away from the tourist neighborhoods you can find a median home for an average of $615,000. The median home is usually a house with 3 bedrooms, 2 bathrooms, a kitchen, a living room, a garage, and a small garden, so that is the parameter that is taken. Although keep in mind that the rooms are smaller in Hawaii than in the other states.

Proposed Residential Building Projects in Hawaii

Most of the real estate projects in Hawaii are luxury homes. Hawaii’s luxury real estate market is soaring to record highs fueled by several factors, including pent-up demand from the coronavirus pandemic, historically low-interest rates, and surging stock markets.

These luxury home projects are promoted by investors with a large economic capital, and who will receive a large profit. There are many wealthy people from the entertainment, technology, and finance sectors who are looking to own a vacation home in Hawaii or even move there entirely.

These luxury houses usually exceed 4000sq ft and have large swimming pools and parks for you to enjoy life outdoors. They are also housed with more than 5 rooms, practically mansions, which look very different from the typical houses in Hawaii.

Hawaii 15-1729 16th Avenue Laau Paina Keaau HI - 3 Beds and 2 Baths on Gross Floor Area 1538 sqft - Built in 2022 - Price $639,000 A

Newly Built House in Hawaii 15-1729 16th Avenue Laau Paina Keaau HI – 3 Beds and 2 Baths on Gross Floor Area 1538 sqft – Built in 2022 – Price $639,000 A

Building Costs Per Square Foot for Single Family Homes in the State of Hawaii, USA

Building costs are 20% above the national average in the state of Hawaii, 3% lower than Alaska and 8% higher than Massachussetts. It’s the second most expensive state to build a house in the USA.

Class 1 – Luxury Single Family Homes

The building cost per square foot for luxury private homes in Hawaii ranges from $413.87 per sqft to $634.44 per sqft, with the average being $488.42 per sqft. As the bar chart shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.

Class 2 – Semi Luxury Single Family Homes

The building cost per square foot for semi-luxury private homes in Hawaii ranges from $251.53 per sqft to $385.56 per sqft, with the average being $296.83 per sqft. As the bar chart shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.

Class 3 – Best Standard Single Family Homes

The building cost per square foot for best-standard private homes in Hawaii ranges from $162.60 per sqft to $246.97 per sqft, with the average being $190.37 per sqft. As the bar chart shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.

Class 4 – Good Standard Single Family Homes

The building cost per square foot for good-standard private homes in Hawaii ranges from $118.67 per sqft to $181.98 per sqft, with the average being $140.05 per sqft. As the bar graph shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.

Class 5 – Average Standard Single Family Homes

The building cost per square foot for average-standard private homes in Hawaii ranges from $96.32 per sqft to $147.52 per sqft, with the average being $113.58 per sqft. As the bar graph shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.

Class 6 – Minimum Standard Single Family Homes

The building cost per square foot for minimum-standard private homes in Hawaii ranges from $75.97 per sqft to $116.45 per sqft, with the average being $89.62 per sqft. As the bar graph shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.

List of 12 Metropolitan Areas/Cities in Hawaii – Percentage Deviation of the City/Town Building Cost from the National Average ($X), in Descending Order:

There are 151 municipalities and 17 special districts grouped into 4 counties in the state of Hawaii. The bar chart below indicates that building costs vary in each metro city/town. The construction cost per square foot in each of these metropolitan cities varies from the state and national average by a certain percentage based on the location factor also known as the local modifier.

The percentage deviation of building costs from the National Average for each metropolitan area in Hawaii is shown below.

If $X is the Average National Building Cost in the USA, then it will cost the following to build a residential property in each metro city/town in Hawaii:

Hawaii Average 20% (20% more than X)

  • Hawaii Average 20%
  • Ewa 967 20%
  • Halawa Heights 967 20%
  • Hilo 967 20%
  • Lualualei 967 20%
  • Mililani Town 967 20%
  • Pearl City 967 20%
  • Wahiawa 967 20%
  • Waianae 967 20%
  • Wailuku (Maui) 967 20%
  • Aliamanu 968 22%
  • Honolulu 968 22%
  • Kailua 968 22%

The Metropolitan Area List above as well as the Bar Graphs below shows that Ewa is the cheapest city to build a private home in the state of Hawaii. Kailua, Honolulu and Aliamanu are the most expensive cities to build a home. Building costs are 20% above the national average in Ewa and 22% above the national average in Kailua, Honolulu and Aliamanu.

Cheapest Places To Build in Hawaii:

The cheapest places to build are those below 5%. There are no such places in Hawaii.

Expensive Places To Build in Hawaii:

If anything between 5% and 10% is considered expensive, then there are no such metropolitan areas in the state of Hawaii.

More Expensive Places To Build in Hawaii:

If anything between 10% and 15% is considered more expensive, then there are no such metropolitan areas in the state of Hawaii.

Very Expensive Places To Build in Hawaii

The most expensive places to build a house in the USA are those which are 15% + above the national average. There are 12 such places in Hawaii. Building costs in the cities of Ewa, Halawa Heights, Hilo, Lualualei, Mililani Town, Pearl City, Wahiawa, Waianae and Wailuku (Maui) are 20% above the national average. The cost of building a home in the City of Aliamanu, Honolulu and Kailua is 22% above the US average.

Hawaii State Average Costs:

Private home building costs in the state of Hawaii are 22% above the US average. Building cost rates in the metropolitan areas of  Ewa, Halawa Heights, Hilo, Lualualei, Mililani Town, Pearl City, Wahiawa, Waianae and Wailuku (Maui) are equivalent to the Hawaii state average. Aliamanu, Honolulu and Kailua are the most expensive cities to build a home in Hawaii. The state of Hawaii is the second most expensive state to build a home in the USA.


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