(Note: I'm going to do some keyword stuffing here for potential real estate investors.)
I get a lot of e-mails and PMs from forum posters (on the Mainland) with Hawaii real estate questions. Most of them have been attracted to the advertised lure of "cheap Hawaii real estate", and that usually means the Puna district of the Big Island (Hawaii Island).
There are a number of reasons that (some) Puna land is cheap. For example, isolated parts of the Big Island still lack electricity, water, and sewage utilities. You live from photovoltaic panels, propane tanks, generators, and water catchment tanks. It works great until it's too cloudy/rainy or there's a drought, and then the utility costs get expensive. Frankly I'm still a little confused on how a septic system with a leach field works when it has to be dug out of solid lava. (Up until a couple of years ago, the EPA was still chasing down homeowners who refused to stop using cesspools.) If I was going to buy cheap land on the Big Island, I'd be sure to rent in the area for at least six months to get familiar with the zoning and utility issues.
As rural as it may be, the Puna area offers some of Hawaii's most beautiful vistas. The developed parts of Pahoa and Kapoho are even nicer, with some of the beach homes having shallow tidepool channels right up into their backyards. Lava flows under the channels (deep underground, or at least that's the hope) so the water actually gets warmer as you go deeper. The temperature in an eight-foot-deep channel rises from 80 degrees at the surface to nearly 90 degrees at the bottom. I wonder how many children have been conceived in those Kapoho tidepools, but I digress.
I've mentioned that pesky "lava" word again, and it's all coming from Kilauea. The volcano has been oozing lava continuously since 1983 (over 30 years!) and shows no sign of stopping. (In the 1990s, my spouse and I drove on Puna roads and laid on beaches that are now under six feet of lava.) If anything, this year Kilauea has been seeking new outlets. The latest is on the east ridge of the volcano, and the flow is actually moving northeast toward Pahoa. The town itself is not threatened, but one of the outlying neighborhoods is already nervously considering their evacuation plan.
Here's a recent newspaper story:
http://www.staradvertiser.com/news/breaking/20140906_Hawaii_residents_still_on_alert_as_lava_flow_slows.html?id=274231081Here's the most recent USGS survey map of the homes... and the lava:
http://hvo.wr.usgs.gov/maps/uploads/image-109.jpgHomeowner's insurance? Well, on the Big Island there are both tsunami zones and lava zones. Good luck. Did I mention the 2006 earthquake which caused property damage on the Big Island, and the mild 2014 temblor? What about this summer's Hurricane Iselle, the only hurricane in recorded human history to run straight into the Big Island-- right on top of Puna?
USAA has not insured Hawaii homeowners during this millennium. They'll insure first-time homebuyers, but their premiums seem ridiculously high until you consider their exposure to Hawaii's "black swan" natural disasters. If one of America's strongest property insurance companies fears to tread in these islands, even with ridiculously high premiums, then there just might be a reason for it. Which, considering that a natural disaster happens every decade or two, is not so "black swan" after all.
Don't get me wrong-- there's plenty of expensive Hawaii real estate around here, and even some moderately-priced real estate (if you know where to look and can contribute sweat equity). But be very cautious with the cheap stuff.
I'll just leave these keywords here for readers who are searching for cheap Hawaii real estate. Hopefully they also search for the keywords lava, tsunami, hurricane, and earthquake...