Regardless of the island of the state of Hawaii or "The Aloha State" just one of its many informal monikers, the state is made up of many islands only seven of which are inhabited. Real estate can be purchased and foreclosures can be found on only six. Hawaii is known as the Big Island and has the largest land mass and the second highest population. The largest cities on the Big Island of Hawaii are Kailua-Kona, Hilo and both of which have international airports. The most populated island and therefore where the majority of foreclosures can be found is Oahu which is also the location of the state capitol, Honolulu. There are many large cities on Oahu all of which will have or currently have foreclosed homes for sale to the general public. The second largest island is Maui, also called the Valley Island with its largest city being Lahaina. Kauai is the fourth largest and least populated island of the main four islands that make up the state of Hawaii and is known as the Garden Island. Each of the four main islands makes up a county so that Hawaii is broken into four distinct counties and island groupings.
The economy of the state rests mainly on non manufacturing sectors such as sugar, pineapple and varied food products. However the cost of shipping these goods to the mainland makes these industries pale in comparison to the Tourism industry which accounts for roughly 25% of all of the states GDP.
With tourism as such as high percentage of the states revenue it is little wonder that home ownership in Hawaii is the lowest of any state in the US with only 56.5% of the states residents owning the home they live in. Comparing this to the national average of 66.2% it would lead one to believe that foreclosures in Hawaii would be rare but that is not the case.
With the sub-prime mortgage meltdown and the global economic meltdown that followed it many home owners in Hawaii have been foreclosed on for various reasons. One substantial reason is that many homes in Hawaii are actually second homes for people living on the west coast of the mainland. The first mortgage payment that gets missed is the one that is not a primary residence and therefore many foreclosures in Hawaii were someone's second or third home.
This is second home foreclosure is the primarily foreclosures in Hawaii tend to be of higher value than in any other state. This is also the reason that buying a foreclosure home in Hawaii will generally create a greater equity position than in any other state. This does also reflect the difficulty in resale as the desire to own a home is less in Hawaii than in any other state. This could be a migratory mind set or a cultural difference which is more difficult to identify. Renting an investment home would be the best option depending on the price that the home was purchased for and the equity that the purchase provided.
With the nations 8th smallest population and 9th smallest land mass which is also divided into 8 islands, if an investor wants to buy a foreclosure in Hawaii the investor should plan on living either in the foreclosed home or very near the property in order to maintain it.
