Most Hawai‘i Homes Are Equity Rich
That means the majority of Island homes are worth at least twice what’s owed on any mortgages or other debts on the properties.
An area of East Honolulu that includes the gated enclave of multimillion-dollar homes atop Hawaiʻi Loa Ridge had the highest share of equity-rich properties in Hawaiʻi during the first quarter of this year, according to an analysis of data provided by ATTOM Data Solutions.
Nearly three-quarters of the homes in the 96821 ZIP code, which stretches from Waiʻalae Iki to Kuliʻouʻou, were considered equity rich. That means the combined loan balances secured by those homes, including first mortgages and home equity lines of credit, were no more than 50% of the homes’ estimated market values.
Statewide, 56.3% of all single-family homes and condominiums in the Islands were considered equity rich in the first quarter of this year, an increase of 14.5 percentage points from a year ago, reflecting a benefit of rising home prices for existing homeowners, according to ATTOM.
Nationally, 44.9% of mortgaged properties were considered equity rich in the first quarter, up from 31.9% in the first quarter of 2021, with the most equity-rich areas centered around the tech hubs of the San Francisco Bay Area and Austin, Texas.
“Record levels of home equity provide financial security for millions of families and minimize the chance of another housing market crash like the one we saw in 2008,” says Rick Sharga, executive VP of market intelligence for ATTOM. “But these higher home prices and rising interest rates make it extremely challenging for first-time buyers to enter the market.”
On Oʻahu, 53.6% of all mortgaged homes were considered equity rich, up from 36.5% just one year ago.
Drilling down to the ZIP code level, 72% of homes in East Honolulu’s 96821 neighborhood were equity rich, an increase of 18.8 percentage points. The median single-family home price there rose 26% last year to $1.65 million; by April 2022 the median price had reached $1.83 million.
Rounding out the top five equity-rich ZIP codes:
- 96734, Kailua: 68.4% of all homes were equity rich in the first quarter compared to 50.5% the previous year. Median single-family home prices there rose 25% in 2021 and were up another 20% by April of this year.
- 96816, Waiʻalae-Kāhala-Kaimukī: 65.7% of all homes were considered equity rich, an increase of 13.3 percentage points from a year ago. The median single-family home price there rose 43% last year to $2.5 million, the highest on Oʻahu, but backed down to $2.39 million this April.
- 96825, Hawaiʻi Kai: 62.1% of homes were equity rich, 15.2 percentage points higher than a year ago. The single-family median home price rose 17% last year to $1.47 million and rose another 10% by this April to $1.61 million.
- 96782, Pearl City: 60.6% of all homes were considered equity rich, an increase of 13.8 percentage points from a year ago. The median single-family home price in the Pearl City-ʻAiea region rose 16% in 2021 to $950,000; it had passed the $1 million mark by April of this year.
The percentage of equity-rich homes on Oʻahu drops as you go farther West, but a large portion of West Oʻahu – the area the Honolulu Board of Realtors calls the ʻEwa Plain – saw the number of equity-rich homes increase by more than 50% over the one-year period. Wai‘anae saw a 46% increase.
- 96706, ʻEwa Beach: 41.9% of homes were considered equity rich, an increase of 14.6 percentage points from the first quarter of 2021.
- 96707, Kapolei: 42.5% of homes were equity rich, an increase of 14.2 percentage points from the first quarter of 2021.
- 96792, Waiʻanae: 46.9% of all homes were equity rich, an increase of 14.8 percentage points from the first quarter of 2021.
The median price of a single-family home on the ʻEwa Plain in 2021 was $850,000, up 20% from $711,000 in 2020, according to the Board of Realtors. By this April, the median price there had jumped another 17% to $935,000.