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How Much Does it Cost to Build a House in Honolulu?

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Honolulu is one of the most popular areas in Hawaii that attracts locals and tourists alike for its numerous beaches, restaurants, scenery, and weather. Many of the people in the city are just there enjoying a nice vacation, but residents in the city are able to enjoy the Hawaiian vibe all year round. White sand, food trucks, Lūʻau’s, and the hot sunny weather are some of the many attractions that these residents enjoy. However, it is important to realize that while there are many benefits to living in such a city, the cost of living is not known to be budget-friendly. 

The Cost of Building a Custom Home in Honolulu

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Honolulu is currently one of the most expensive cities to live in while having the highest homelessness rate. This poses a serious concern to future homeowners who plan to move into the city. There are many types of fees such as general home costs, building permits, and land costs to account for, and many of these permits and spaces are on the more expensive side. 

Despite these potential setbacks, current residents have been able to establish their homes with numerous designs and inspirations from other cultures. Some of the homes that are commonly seen in the city include Balinese-inspired residences that incorporate open-air spaces, Hawaiian-style homes which involve an abundant use of glass, and craftsman-style houses which are commonly found in Kailua Kona or Waikoloa Village. Other more expensive homes utilize the beach to their advantage resulting in luxury beach houses, while other similar homes are seen atop hills offering the homeowners a panoramic view of the city and the island.  

Figure 1. Typical cost breakdown of a single-family home constructed using the conventional method, according to Home Builder Digest. Image Source: National Cost Guide.

Hard Costs

Hard Costs are costs that directly relate to the actual building of the physical home. These costs involve landscaping, roofing, material sourcing, and other laborious work. The average price for a 2,600-square-foot home is estimated to be around $400,000 which is around $150 per square foot. This leads to a total price of $140,000-$700,000. However, in the city of Honolulu, building a home may not be as affordable as you think. According to recent data, the median home price exceeded $1 million last September which is a 19% increase from last year. To break this down further, the price per square foot for low-end, single-family homes is roughly around $290 per square foot while high-end residences may cost you around $780 per square foot. In addition, the floor plan, landscaping, roofing, and materials will add up by the end of the construction process and can ultimately cost over $1 million dollars. However, as the economy slowly starts to recover, prices may decrease and halt, but this does not guarantee that overall costs will have a significant drop.  

Home Additions: Home additions are extra spaces that can provide a new dynamic to any home. However, it is important to consider the costs because the prices vary between different spaces such as living rooms, sunrooms, or dormers. A typical home addition starts at around $191.15 per square foot but can go up to around $226.87 per square foot. Sunrooms on the other hand range between $127.59 – $180.61 per square foot. Lastly, dormer rooms with a single-window gable cost between $4,904.72 – $5,451.53. These costs are subject to increase depending on the size, floor plan, and design. 

Pool Addition:

Pool Addition: Another addition that many homeowners may consider is the inclusion of a swimming pool in their home. According to Geoffrey Lewis, principal at Geoffrey Lewis Architects, a swimming pool in the backyard is a popular amenity, but prices can be high in a place like Honolulu. He said an above-ground pool can start from $180,000 and up while an inground pool is estimated to cost around $130,000 and up. Additionally, the average installation cost for one pool is  $22,191 with many homeowners spending between $14,925 to $29,988. However, despite the hefty investment, a pool adds an average value of around $100,000 to a Honolulu home.

Roofing: For roofing, expected prices range between  $105 – $450 per square foot, and a roof tear-off will cost around $100 per layer and per square foot. Replacements such as sheeting will bump up the price an additional $75 per sheet. However, prices range greatly depending on the type of roof, materials, replacements, and labor needed. 

Garage: Lastly, for garage installations, the cost for a metal garage door is roughly around $1,313.18. In terms of its price range, the cost can range anywhere between $1,176.47 – $1,449.88. In addition to the door itself, a garage door opener costs around $489.64 per unit. This presents a price range from  $412.59 – $566.69. Finally, in terms of garage repairs, prices can vary between $346.31 – $384.41 while a spring replacement has a fixed price of $365.36.

Soft Costs

Soft costs are costs that do not directly relate to the actual building of the structure of the home. These include permits, architectural fees, design fees, and other miscellaneous rates that need to be accounted for. It is important to be aware of these extra costs as it contributes to the final price of your home. With the current state of the economy, prices have drastically increased, and materials are experiencing a shortage in many cities throughout the U.S. When accounting for building costs, it’s important to think about various soft costs: fees for land, permits, architectural fees, and design fees. 

Cost of the Land  

As with any other piece of land, the price varies depending on the size of the property. In a city like Honolulu, residential homes are diverse with your average suburban houses located in neighborhoods while more luxury residences are commonly built as beach houses by the numerous beaches throughout the island. Recent data suggests that the lowest price for a 395,089-square-foot tract of land is roughly around $349,000 while luxury homes cost around $20,000,000 for a 3,222,757-square-foot piece of land. Apart from property size, location plays an important role in determining the price of the lot. More private residences tend to be more expensive while your average neighborhood suburban home will significantly cost less. Listings from other sources provide an example of how location plays a factor in land prices with a private residence costing around $1,200,000 sitting at the top of Maunalani Heights. This data is subject to change due to the market change that is currently occurring. The pandemic has affected numerous businesses and the construction industry in Honolulu is no different. With the current inventory shortage and expensive prices, land prices are subject to increase but may become more affordable in the near future.  

Permits and Other Fees 

Put it simply, building permits vary depending on the county in Hawaii. The minimum fee can be between $10 to $500 in value. However, permit prices can cost as much as $4,300.00 for a luxury residence. In addition to this, contractors put a minimum price per square foot on each project: roughly around $50. This adds to the total expenses for the final price and is subject to change with other services required such as additions and repairs. Lastly, aside from permits and miscellaneous fees, it is important to remember that property taxes are part of the total cost with residential projects being taxed a 0.35% of the assessed value. 

Architecture and Design Fees

Lastly, architecture and design fees follow the same format as the permit and land costs with the prices varying in size, floor plan, and type of work done on the home. For full architectural services, there is usually a fee of 10%-12% of the final price, but this percentage can increase to 15% with extra services such as remodels and repairs. The average remains at 10%-12% of the final price, but is subject to change.  

How do the custom home building costs in Honolulu compare to other nearby cities?

Nearby cities face similar situations that Honolulu is currently experiencing. One common factor across cities is the economic effect of the pandemic. Market prices, inventory shortages, and unaffordable housing are some of the main issues homeowners are facing. This extends to cities near Honolulu such as Aiea, Kaneohe, and Ewa Beach. The main difference between these cities is the required permit fees. For the city of Aiea, permits are usually for solar water heater installations. On the other hand, Kaneohe’s permits are usually for addition/alteration, while Ewa Beach permits are usually for new solar photovoltaic installation. These permits are mostly for 1-2 story homes with varying floor plans. Additionally, there is the possibility of additional costs for services outside the house which include gates, fences, and pavers. However, prices increase further depending on the type of home; beach houses, hilltop residences, and suburban homes each cost a different amount. 

Despite these common trends, certain areas in Hawaii have a much cheaper home value. Hilo has an average home value of around $318,000, 28% below the national average. Another city by the name of Kailua has an average home value of over $500,000 which is 11% lower than the national average. Lastly, Waimea and Waianae cost around $400,000 and $322,000 respectively. These cities are 22% and 11% below the national average. Other neighborhoods in Honolulu, with their respective home costs, are included below: 

  • Waikiki – $485,500
  • Hawaii Kai – $996,500
  • Makiki – $395,000
  • Ala Moana – $896,000
  • Salt Lake – $490,000

One thing to note about Honolulu is that it is not the most affordable place to build a house. As mentioned earlier, median home prices have seen a 19% increase over the past year, and with the pandemic still affecting the world, the market is set to recover a little later than usual. While the market is projected to recover around 2022-2023, many people have still moved away from Honolulu because of the high prices and high homeless rating. Hawaii was recently ranked as the state having the second highest number of homeless people. This may discourage some people from moving into the city, and makes it more evident as to why many have moved away.  However, despite these expensive costs, the city has a low-interest rate, making it less expensive to borrow money. Moreover, the country is currently still struggling with increased prices and material shortages. Depending on how the economy bounces back in the next year or two, housing affordability may improve in Hawaii. 

What Leading Custom Home Builders and Architects that Serve the Honolulu Area Say

According to Kris from Eiserloh Architects, construction costs have had a significant increase in the past two years because of the labor costs and sourcing of materials. This price increase, along with Hawaii’s general expenses, contribute to Honolulu’s reputation for high prices. Kris shares that today, homeowners should architectural services around 10%-16% of the construction cost, depending on project size. Likewise, a typical home in Honolulu is roughly 3,000 square feet and costs about $1.6 million. Other typical areas include a 500-square-foot garage and another 500 square feet of space for the covered lanai. Lastly, designs and structures such as concrete walls, landscaping, and swimming pools, and upgraded finishes will push the budget further and with these amenities can be estimated to be around $2.4 million. 

The same trend is true for Welch and Weeks Architects. According to Victor Weeks, simple home construction in Honolulu can start from $300 per square foot and can get as high as $1000 per square foot for a more high-end home. However, Weeks mentioned how the new SMA and EA approvals can add up to the construction time and costs. SMA and EA applications are meant to protect the shoreline for beachfront homes and will cost around $55,000 to submit. 

However, Joseph Megill of Mali Bella Company, remains optimistic about the situation. Despite the challenges facing the state’s construction industry such as lumber cost increases and limited product availability, he said that residents are pushing to get their homes built, remodeled, or updated. 

Another firm spoke about the matter, giving their insights on the current state of construction. Prowork Pacific Inc. provided a straightforward database of value-conscious, mid-range, and high-end custom homes. Value-conscious homes have a price of roughly $16,000, mid-range at $22,000, and high-end custom homes ranging beyond $22,000 that include $120,000-$150,000 in design fees. The firm also tackles the topic of permits, stating that an addition or alteration on permits can take around six to seven months because of the DPP backlogs and other policies relating to building permits. Finally, the high inflation rate has affected Hawaii in a negative way. This inflation is expected to get worse in the next year or two and will have a major impact on construction costs. 

The Future of Honolulu’s Residential Construction Industry

The future of residential construction in Honolulu is rather similar to the rest of the U.S. The COVID-19 pandemic has drastically affected the market and economy, raising prices and shortening stocks. Just like the other cities throughout the country, Honolulu is expected to make slow recovery in terms of its market and prices. As mentioned earlier, many residents have moved away from the city because of the high cost of living. This may change in the near future as materials and supplies begin to ramp up again, and at the same time, provide more affordable options for residential projects. Lastly, it is important to mention the low-interest rate the city has which could still entice many to consider a move into the city once the economy becomes more stable. This poses numerous opportunities for the city to thrive once again, bringing in more residents and resulting in more opportunities for residential contractors and firms.

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