Hawai‘i Housing 2025: What Every Kaua‘i Homebuyer and Investor Should Know

By Dinka Bojanova | Kaua‘i’s Luxury Realtor Expert & Biophilic Advocate

As the sun rises over our beloved Garden Island, Kaua‘i remains as enchanting as ever—but beneath its beauty lies one of the most complex housing landscapes in the nation.

The newly released 2025 Hawai‘i Housing Factbook from UHERO sheds light on critical trends shaping our real estate market. Whether you’re a buyer dreaming of Princeville sunsets, a seller repositioning for opportunity, or simply curious about where things stand, here’s what you need to know.

The Price of Paradise

In 2024, the median single-family home in Kaua‘i sold for $1.3 million, placing us among the highest in the islands—just behind Maui. In Princeville, that number soared to $2.2 million. While condos statewide dipped slightly in price due to insurance challenges and increased supply, Kaua‘i homes continued to appreciate steadily.

For many local families, homeownership remains a challenge. Fewer than one in four households statewide can afford the median home. The gap between mortgage payments and median rent on Kaua‘i is now nearly $3,000/month, making renting the only viable option for many.

Housing Supply: Slow and Scarce

Kaua‘i’s housing stock has shrunk slightly over the past five years, due to a mix of limited new construction and an increasing number of homes converted into vacation rentals. Compared to O‘ahu and Hawai‘i Island, which expanded supply, Kaua‘i experienced rent growth 51% faster than the statewide average.

Why? It’s simple: less new housing leads to higher costs. Without enough long-term rentals or for-sale inventory, competition is fierce, especially in desirable neighborhoods like Kōloa and Princeville, where over half of homes are used as vacation rentals.

Vacation Rentals and Community Impact

A hot topic across the state is the role of short-term rentals. On Kaua‘i, a staggering 80% of homes in Princeville and 51% in Kōloa function as vacation rentals. While these bring in tourism dollars, they also limit availability for local families and raise long-term housing costs.

With Maui debating the conversion of thousands of vacation units into residential housing, it sparks a relevant question: Should Kaua‘i consider similar policies to protect local affordability?

Promising Policy Moves

Despite bureaucratic slowdowns—permitting for new multifamily homes still takes over 400 days—the state is moving in the right direction:

• Ka Lei Momi, a bold public housing initiative, aims to build nearly 11,000 new units.

• New laws will ease the creation of accessory dwelling units (ADUs) and encourage converting old office buildings into homes.

• Honolulu’s proposed “empty homes” tax could offer a model for Kaua‘i to curb absentee ownership and increase inventory.

Locally, Kaua‘i celebrated a milestone with the Lima Ola development in ‘Ele‘ele, where the first families moved into one of the island’s few large-scale affordable housing projects. Eventually, Lima Ola will offer 550 new homes.

What This Means for You

As your dedicated luxury real estate and biophilic expert, I encourage you to view these shifts as an opportunity:

• Buyers: Now may be the moment to act, before potential policy changes reduce vacation rental inventory or boost supply in key zones.

• Sellers: If you’re holding a high-value home, especially in visitor-favored zip codes like 96722 (Princeville), out-of-state buyer interest remains high—over 60% of local transactions are from non-resident purchasers.

• Investors: Consider diversifying with condos or smaller homes to meet the growing demand for attainable housing with lower monthly costs.

Let’s Navigate the Market Together

Even amidst complexity, there is clarity—and beauty—in this market. As always, I’m here to guide you with transparency, care, and deep local insight.

Whether you’re seeking to plant new roots, make a meaningful sale, or craft a biophilic home oasis, my team and I are ready to help you live your dream life, naturally.

With aloha,
Dinka Bojanova
Kaua‘i’s Luxury Realtor Expert | Biophilic Design Advocate
www.dinkabojanova.com