Study: Wealthy Out-Of-State Renters Are Driving The Market In Honolulu
Short-term leases also are much more popular among people looking for rentals in Honolulu, a study shows.
Most people searching for a place to rent in Honolulu are from out of state and have more money to spend on housing than most locals.
That’s according to a recent analysis by the rental search website . The study found that while nationally, about 30% of people who look for rentals in a city are coming from another area, more than one in two searches for rentals in Honolulu on Apartment List’s platform came from people who don’t live there.
“That is very unusual,” said Igor Popov, chief economist at Apartment List.
He thinks Honolulu is experiencing an amplified version of national trends: more remote workers, more renters competing for housing and more people looking for short-term housing, which could lead to higher rents.
The analysis , out-of-state renters most frequently came from Los Angeles, New York or San Francisco, while people leaving Honolulu most frequently looked for rentals in Las Vegas, Seattle and Los Angeles.
“In total, 53% of searches into Honolulu are coming from out-of-town apartment seekers,” the analysis concluded. “This migration flow is putting pressure on local rent prices because these movers have budgets that are 10% higher than the existing residents who are also searching for a new apartment.”
The study was limited in scope but provides a glimpse into concerns about the possible trends and effects of migration into the islands during the pandemic. The state’s eviction moratorium is set to expire in two weeks and even with it in place, renters have worried about how spikes in home sales and high prices are displacing them.
Popov said normally wealthier households don’t move around much but that changed last year due to the proliferation of remote work in the wake of stay-at-home orders.
“A lot of people with that luxury say Hawaii is amazing,” he said. “The corollary to that is that people in remote-friendly occupations tend to have higher wages on average.”
Honolulu is among many cities reliant on tourism, such as Orlando, Myrtle Beach and Lake Tahoe, that are experiencing an influx of wealthy renters.
“The same things that make it a hospitality draw is drawing remote workers that are bringing pretty large paychecks into the market,” he said.
The Apartment List data found that people who planned to move to Hawaii from the mainland were setting rent budgets that were about $175 higher than locals who looked for housing: $1,905 per month compared with $1,728.
More renters are also looking for shorter-term leases, between one and six months long, Popov said.
“Honolulu stood out as the market that had the biggest increase in short-term lease popularity,” he said, comparing Honolulu to other major cities across America.
Popov said nationally there are more renters than there were previously in part because the extremely competitive home buying market is preventing people who might otherwise buy homes from doing so.
He believes the effects of wealthier renters entering the market could drive up rents and force renters into more crowded situations.
“Essentially doubling up is probably the primary way that people are navigating these really quickly rising rents,” he said. It’s possible the local business community could benefit from more money in the state, however.
“One always wants to hope for a ‘rising tide lifts all boats’ story,” he said.
