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The ultimate guide to buying a home in Oahu, Hawaii

waikiki beach and diamond head crater including the hotels

Far-flung and separated from the mainland by the vast Pacific Ocean, Hawaii and its lush islands are some of the country’s last frontiers.

In this tropical paradise, you can experience endless sunshine, unbelievable access to great natural wonders (in land and on water), and a deep well of different cultures, making Hawaii truly a diverse melting pot. Of all the islands in the archipelago, there is one that captures the essence of the Hawaiian spirit: Oahu, the so-called Gathering Place.

Interested in making the great island of Oahu your home? Continue reading to learn more about buying real estate on the island.

The ultimate guide to buying a home in Oahu, Hawaii

All about Oahu

The state of Hawaii comprises the entire Hawaiian archipelago. This includes a total of 137 islands stretched across the central Pacific Ocean. There are eight main islands to the state, with Oahu being the third largest and the main hub of activity.

The Gathering Place

Known as “The Gathering Place” since time immemorial, Oahu is home to about two-thirds of the state’s population, which equates to roughly a million people. It also attracts the most number of tourists— an average of 5.4 million visitors each year.

Although the pandemic slowed down tourism in the past two years, Oahu welcomed 3.3 million tourists in 2021. That’s nearly half of the 6.7 million tourist arrivals in the entire state of Hawaii within the same period.

Island history at a glance

suburban honolulu from above

Oahu’s history is long and storied. According to records, the island has been settled since the third century. The Tahitians were the first to establish permanent communities, followed by other Polynesian settlers. Ruling over everyone was the mighty Kingdom of Oahu, which controlled the island for 304 years. That was until King Kamehameha I came and conquered Oahu in 1795, a crucial step in unifying the Hawaiian islands under the Kingdom of Hawai’i.

By the early 19th century, Oahu became the home of the Hawaiian monarchy and the capital of the kingdom. Their former home, the ‘Iolani Palace in Downtown Honolulu, which was built 1879, still stands today. Their residence was short-lived, however, when the Hawaiian monarchy fell in 1893. The Hawaiians’ last monarch was Queen Lili’uokalani of the Kalākaua Dynasty.

In 1898, the Hawaiian islands were annexed by the United States. Roughly 61 years later, it was admitted to the Union as its 50th state.

What you need to know about buying a home in Oahu

Many dream of buying a home in Oahu to live that coveted island lifestyle. But there are a few things that make homebuying in Oahu unique than in the mainland United States.

Regions, cities, and other notable places

The third largest island in the archipelago, Oahu measures 30 miles wide and 44 miles long. It also features a long coastline—227 miles of mostly glittering, white sand beaches and home to some of the world’s best surfing sports.

Honolulu, Oahu’s largest city and also the state capital of Hawaii, is located on the southeast shore of the island. It stretches across over 68 square miles of land, making it Hawaii’s biggest city as well. Honolulu serves as the county seat of the City and County of Honolulu, which comprises most of the island.

There is no shortage of excellent real estate options in the Honolulu housing market. Some of the communities you can explore include Kaka’ako, the island’s culinary mecca, stylish Ala Moana, Hawaii Kaiin Eastern Honolulu near the Windward Coast, and the exclusive neighborhood of Hawaii Loa Ridge.

Apart from Honolulu, Oahu has four other distinct regions: the world-famous North Shore, Central Oahu, Leeward Coaston the west part of the island, and Windward Coast, which stretches along Oahu’s eastern shoreline.

North Shore

As its name suggests, North Shore is located in the northernmost portion of Oahu. The region’s claim to fame are its large waves, which helped solidify its position as one of the world’s greatest surfing destinations. North Shore is approximately 30 miles north of Honolulu; the drive can take up to 40 minutes via Kamehameha Highway (HI-99) and I-H-2.

Several communities make up the entire North Shore. These include Waimea Bay, home of the Banzai Pipeline and Sunset Beach. Haleiwa is another notable North Shore neighborhood. Often considered to be the gateway to the rest of the North Shore, Haleiwa is a charming surf town and also the epicenter of art and culture in the region.

Life in the North Shore can be best described as slow-paced and laid-back. Much of the activity takes place in the winter months, when surfers from all over the globe converge to participate in the world’s most prestigious surfing competitions, including the Vans Triple Crown of Surfing.

One important factor to consider when considering the North Shore as your base in Oahu is the winter swell. Apart from being the peak season for big wave surfing, winter can also cause flooding in certain parts of the region. In some cases, it can lead to the temporary closure of Kamehameha Highway. See more special considerations whenbuying a home in Oahuhere.

Central Oahu

The heart of the island, Central Oahu offers a different facet of life in Oahu: country, Hawaiian-style. Most of the region is landlocked, save for the southern part where Pearl Harbor is located. Some say that Pearl Harbor is its most significant attraction culturally and historically, but this vast area is greatly underrated and has plenty to offer.

Central Oahu is mostly a lush, emerald valley tucked between two mountain ranges: Koolau, the natural boundary of Windward Coast, and Waianae Mountains on the west, separating Central Oahu from Leeward Coast.

Instead of beaches, Central Oahu has sprawling pineapple fields that stretch as far as the eye can see. Some of these fields are part of the historic Dole Plantation, located along Kamehameha Highway. The Hawaii Plantation Village is another local attraction and arguably the best place to learn about the island’s agricultural past and its impact on Oahu’s cultural diversity.

Communities in Central Oahu include Mililani, located smack dab in the middle of the island. It is considered among the top five wealthiest places to live in the state and also has the distinction of being Hawaii’s first master-planned community. Another notable area is Pearl City, south of Mililani and north of Pearl Harbor.

Leeward Coast

Oahu’s Leeward Coast is often considered to be the most rugged and undeveloped part of the island. For that, it constantly attracts intrepid travelers as well as homebuyers who want to escape from it all. Honolulu is located about 30 miles away.

Separated from Central Oahu by the Waianae Mountains, Leeward Coast features a jagged landscape further inland that gives way to sparkling beaches as you reach the shoreline. Rural towns are scattered throughout the region, some remote and largely untouched by big developments. There is only one resort community in the Leeward Coast: Ko’olina.

Oahu is generally sunny and hot, but days are even brighter and drier in the Leeward Coast. This makes it an ideal location if you want an island home centered on beach living. That said, a general challenge when it comes to buying a home in this section of Oahu is the access.

Traversing some of the roads that lead deeper into the Leeward Coast can be risky. But for some homebuyers, all that risk is worth it, especially if they get to have a piece of pristine Oahu land.

Windward Coast

aerial view of lanikai bay residential area oahu hawaii

If you like the Leeward Coast’s untouched natural beauty but would prefer more amenities, the Windward Coast on the east side of Oahu is the perfect location for you.

Boasting the longest coastline in Oahu (30 miles), the entire Windward Coast experience starts with the drive from Honolulu. It can only be described as a scenic ride, traveling from the cityscape, into the Koolau Mountains, and finally out into the east coast via Pali Highway. Then, the descent starts until you reach the first village: Waimānalo, mostly residential and home to the longest beach in Oahu, Waimānalo Beach.

Another notable community in the Windward Coast is Kailua, a relaxed bedroom community brimming with local flavor. Its beaches, Kailua and Lanikai, are ranked as some of the best beaches in the world, making this beach town especially attractive if you are interested in buying a waterfront home in Oahu.

Oahu’s housing market

Oahu has a highly competitive real estate market fueled by interest from both mainland and foreign buyers.

Property types vary widely depending on the location—Honolulu offers the most options, ranging from luxury waterview estates, single-family homes in Hawaii-inspired architectural styles, and high-end condos in trendy neighborhoods like Kaka’ako and Ala Moana.

Another important thing to note is the age of properties in Oahu, especially in Honolulu. New construction may be harder to find, as most single-family homes on the island were built between the 1950s and 1970s. That said, most homes for sale in Oahu have been updated, though it is not uncommon to come across older homes once in a while.

Current housing market trends

Home prices in Oahu are expected to continue to increase in 2022 following last year’s steady uptick. This change is expected to reflect across different markets, including single-family homes and condos in the island. In January of 2022 alone, the home median price in Oahu rose to $1,060,000 for single-family homes and $485,000 for condos.

The temperature remains hot and competitive in Oahu as well. There is strong demand for homes for sale on the island. The average number of days on the market (12 days was recorded last January 2022) is indicative of this. Condos are also enjoying a shorter time on the market—14 days.

Now that travel restrictions have eased, more buyers are expected to come to Oahu in the next few months. This may cause the housing demand to soar a little higher. If you are waiting for the right time to buy a home in Oahu, there is no time to waste.

Property ownership in Hawaii

Homeownership in the mainland United States is mostly straightforward, but that is not the case in Oahu and the rest of Hawaii. Here, there are two types of property ownership: fee-simpleand leasehold.


In a fee-simple ownership, you are the owner of the land and the structures on it. You are also given certain privileges, including the right to sell the property, will it to another individual upon your passing, and rent it to a tenant. You are also given the right to do whatever you want with the property as long as it is within local zoning, state, and HOA guidelines. This is usually the type of ownership people encounter in the mainland.

You will find that most homes for sale in Oahu are fee-simple properties. And for many, this type of ownership is more cost-efficient especially if you want to build equity.


On the contrary, a leaseholdis very much like a long-term lease (30-50 years). You will carry some of the responsibilities a fee-simple owner would have, such as paying property taxes and maintaining the entire property. The scope, however, would ultimately depend on what was agreed upon and stated in the lease agreement. Despite this, you do not have full ownership of the property.

Some homebuyers prefer leasehold ownership over fee-simple because it is less expensive. And as the lease term nears its expiration, it is typical for the rent to decrease as well. At the end of the lease term, you might have the chance of owning the property. You can do this by “buying the fee.”

Today, about 2% of single-family homes in Oahu are leasehold properties. The numbers are much higher for condos. About 14% of this property type on the island are leasehold properties, whether you are exploring Honolulu or the Windward Coast.

Leaseholds are rooted in Hawaiian history. Private land ownership did not exist in the islands until 1848, when the Great Mahele replaced the traditional system. Two years later, the Kuleana Act, which introduced fee-simple ownership, was enacted.

Perks and tax breaks

honolulu hawaii from above

Whether you are a fee-simple owner or leasehold owner, as long as you have established your primary residence in Oahu and reside in the island for 270 days a year, you are entitled to a property tax exemption. The total amount that can be deducted ranges from $80,000 to $120,000 depending on your age. Homeowners ages 65 and older typically receive $120,000 in deductions.

This property tax exemption does not happen automatically, however. First, the status of your ownership must be registered with the Bureau of Conveyances. Leasehold owners can qualify given that they are responsible for the property’s taxes and hold a lease term of at least five years.

Once you have established your ownership and residency, you must file a Claim for Home Exemption or Form P-3. This should be submitted to the Real Property Assessment Division on or before September 30.

Special considerations

Now that you are familiar with Oahu’s regions and housing market, as well as the two ownership types in Hawaii, below are a few special factors to keep in mind as you search Oahu real estate for your dream home.

Seller disclosures

Unless exempt in Hawaii Revised Statutes Chapter 508D in the state of Hawaii, it is mandatory for sellers to provide buyers with a written and signed property disclosure statement when they sell their homes.

After entering into a contract, this disclosure statement must be delivered to the buyer no later than 10 days after accepting a contract or on a mutually agreed upon date.

What should you expect to learn from the property disclosure? The document should state all material facts relating to the subject property that affect its market value.

Termite inspection

As a homebuyer in Hawaii, it is an absolute must to check the home you want to purchase for termite infestation. Unlike seller disclosures, this is not required by state law but it is part of due diligence. Most banks and lending institutions also like to be assured that the property in question is termite-free.

If termites have been detected in the property, it falls on the seller to treat the home and shoulder the cost.


Like the rest of Hawaii, Oahu is prone to flooding especially during the wet season, which runs from October through April. Severe rainstorms and hurricanes can also cause flash floods, especially in riverside communities.

As you shop for a home in Oahu, it is best to keep the area’s flood risk in mind. If the seller and their agent can’t provide you with this information, you can check this interactive map showing the flood hazard areas throughout Oahu. You should also consider purchasing a flood insurance policy to protect you and your investment in the long-term.

Good funds

It may be in your best interest to transact with a local bank when securing your financing. This is because most mainland banks in Oahu and the rest of Hawaii only transfer funds on the actual date of closing. This can cause delays in your transaction as Hawaii is a “Good Funds” state.

It is standard practice in Hawaii for all funds to be received by escrow at least two business days before recordation. Since mainland banks only wire funds on the day of closing, it will take further time for the title company to receive and clear the money (at least five business days). From there, escrow will take it to the Bureau of Conveyances to record the transaction. Only then will escrow close the transaction and release the funds for payment.

To avoid delays, unforeseen or otherwise, check with your Realtor for local financing options. You can also consider purchasing a home in cash, which is a better option if you are in a hurry to seal the deal.

Buy your dream home in Oahu with Marshall Mower

Marshall Mower offers over 22 years of award-winning experience in Hawaii real estate as a luxury real estate specialist. Let this Hawaii Top 100 Realtor help you find and purchase your Hawaii dream home.

Get in touch with Marshall Mower today at 808.277.7878 or marshall(dotted)mower(at)compass(dotted)com, or send him a message here to schedule a private real estate consultation.

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