Are Out-of-State Renters Driving the Rental Market in Honolulu?

Are you looking for a rental on Oahu? Do you own investment property? If so, you might be curious to learn about a recent analysis by Apartment List. According to the rental research website, the study found that nationally, 30% of people who look for rentals in a city are coming from another area. But, in Honolulu, one in two searches for rentals on Apartment List’s platform came from people who don’t live here. Interesting.

Renters Look to Work Remotely in Hawaii

Could this have something to do with the remote work trend we have been experiencing since the pandemic? It makes sense to move to Hawaii if you can work from anywhere in the world. Who doesn’t want to live in paradise? It might also have something to do with the fact that many would-be buyers have been forced to stay in their rental due to a competitive real estate market.

Pressure on the Local Rental Market

According to the analysis, the migration flow of out-of-town apartment seekers is putting pressure on local rent prices. Whether or not this trend will continue remains to be seen. And certainly, one study does not tell the full story. But, it stands to reason that people who make a good income and who want to live in an amazing place like Hawaii may continue to migrate to our islands. There’s a reason why Hawaii is a hospitality state, and those same reasons make this place very attractive for those who are tired of living in crowded cities and in less desirable locations.

Apartment List’s Chief Economist, Igor Popov, believes that the effects of wealthier renters entering the market could drive up rents and force renters into more crowded situations. Possibly. Again, it’s really hard to predict trends, especially during a pandemic. But, if you own investment property, you may benefit in the long run as demand for rentals goes up. If you are a tenant and in a secure spot, you may want to hang on to it, or better yet, get pre-qualified for a purchase and begin looking for a property of your own.

Will the High Demand Continue?

When it comes to Hawaii real estate, demand for rental properties is high. Will that same demand continue? Only time will tell. But, doesn’t it make you wonder what will happen once the rental moratorium is lifted? Will landlords try to recoup lost rents by increasing prices?  Will demand continue to outpace supply and force rents up? I don’t think anyone knows for sure given our dynamic market and unprecedented times. All we can do is wait and see, or better yet, buy.