While considering the possibility of buying a home in Hawaii, I was surprised by the home prices I found.

As of 2025, the median price on Oahu reached $1,112,500. This means that the value right in the middle exceeds $1.1 million, not just the average. In our currency, this translates to roughly over 1.6 billion won to buy a 'typical middle-level home.' Even when looking at the entire state of Hawaii, the median price is approaching $950,000.

People often say, "Well, Hawaii is a world-renowned tourist destination, so it's natural for prices to be high!"

I initially thought the same, but as I delved deeper into the market, I realized this is not just a simple case of 'tourist premium.'

Three factors and structural characteristics that determine real estate prices were interlocking like gears.

The most intuitive reason is the lack of land. Being an island in the middle of the Pacific, it is physically impossible to expand the area. Moreover, Hawaii is notorious for its strict land use regulations aimed at protecting the natural environment. Even if you want to build a house, the land available for new development is extremely limited, meaning that no matter how much demand comes in, the supply faucet is completely turned off.

Additionally, there is massive investment capital coming in that pushes out local residents. This was the most bitter part for me while looking at Hawaii real estate. There are reportedly 34,500 short-term rentals (like Airbnb) operating throughout Hawaii.

In this market, there are two main types of buyers competing: local residents who need to live there and investors flocking in from around the world. The problem is that this competition is not fair at all.

Investors have a powerful weapon in the form of 'short-term rental income.' They can easily calculate, "I can just charge tourists hundreds of dollars a day!" As a result, local residents are unable to compete and are being outbid for properties. Ultimately, the lower limit of home prices has skyrocketed.

To make matters worse, property insurance premiums have skyrocketed in recent years. In 2024 alone, premiums increased by a staggering 13%. With the growing risk of natural disasters due to climate change, the cost of maintaining a home is rising dramatically each year.

From the homeowner's perspective, this increased fixed cost has to be passed on to the sale price or rent, making it impossible for home prices to decrease.

At that time, I seriously considered buying, but ultimately I gave up because I didn't think I could handle the intense competition and maintenance costs. I thought to myself, "Why would I want to get caught in that battle?"

However, recently, a significant change that could shake up this landscape has begun, and I am watching it with great interest.

It's because the Honolulu city authorities have taken action. Starting in September 2025, they began to strongly restrict short-term rentals in general residential areas (non-NUC areas) without formal permits.

This regulation is shocking news for external investors who were only looking at short-term rental profits. If they can't operate tourist rentals, the incentive to pay high prices for Hawaii homes drops significantly.

Will this strong regulation be able to curb the insane surge in Hawaii's real estate in the long run?

Once the bubble of external capital is removed, I wonder if local residents will be able to find ordinary homes again.

Although I have stepped back as a spectator, I plan to watch how this massive real estate experiment unfolds.

Do you think home prices in Hawaii will drop in the future?