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Ask Our Home Buying Expert

Have a question? Ask our Home Buying expert.

Have questions? Email Send your question to mlerner@smartasset.com

The Cost of Living in Hawaii

Who wouldn’t want to live in Hawaii? People who don’t like a high cost of living, for one. According to the Missouri Economic Research and Information Center, Hawaii’s cost of living is the highest of any of the 50 states or Washington, D.C. While Hawaii offers beautiful surroundings and rich culture, it’s not a cheap place to live. However, finding a top financial advisor firm in a city like Honolulu could help you manage these costs. Let’s take a closer look at the cost of living in Hawaii.

Check out our cost of living calculator

Housing in Hawaii

It’s not exactly a secret that Hawaii is a pricey place to live. You could always camp on the beach, but if you want four walls and a roof over your head you should prepare to pay a high price.

According to Trulia, the median asking price for housing units in Hawaii is $211,400. That’s 1.35 times the U.S. median asking price of $89,600. Ouch. If you’re already a homeowner in Hawaii and you’ve built up equity in your home, you’re sitting pretty. The median value of owner-occupied housing units in Hawaii is $272,700,  1.28 times the U.S. median value of $119,600.

The Cost of Living in Hawaii

Check out the chart above to see how home prices compare in different Hawaiian cities. In Waipahu, homes have an average listing price of $351,000. That jumps to $373,000 in Hilo. Then things start to get really pricey. Pearl City homes have an average listing price of $629,000. Prices average $1,360,000 in Honolulu, while in Kailua the average listing price is a whopping $1,860,000.

With the high cost of housing in Hawaii, it’s a good idea to understand how moving to the Aloha State will impact your budget. A financial advisor can help you navigate big life changes like a move, or just provide assistance with identifying and meeting your financial goals. A matching tool like SmartAsset’s SmartAdvisor can help you find a financial professional to work with. After you answer a series of questions about your situation and goals, the program will narrow down the options from thousands of advisors to three fiduciaries who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.

Find out now: How much house can I afford

Hawaii Rent

As you might expect in a state where the cost of buying a home is so high, demand for rental properties is high, too. According to myapartmentmap.com, the average rent for a studio apartment in Hawaii is a whopping $1,821. For one-bedroom apartments, it’s $1,903. The price jumps to $2,453 for two-bedroom apartments and $2,977 for three-bedroom apartments. If you’re on the fence about whether it makes sense to rent or buy, try our free rent vs. buy calculator.

Related Article: The Average Rent: What You Should Know

Utilities

The Cost of Living in Hawaii

Utility bills in Hawaii are high. If you don’t believe us, check out the chart above to see how the average monthly utility bill in Hawaii compares to the average in other regions of the country. The data comes from the U.S. Energy Information Administration, which tracks utility bills by state and groups state by region. Hawaii, which along with Alaska belongs to the “Pacific Noncontiguous” region, has by far the highest monthly utility bill.

You might not think so, what with the near-perfect weather year-round, but Hawaiians pay a lot for electricity. Just as the state ranks first in overall cost of living, it’s number one for electricity costs. And if you don’t like the heat, you’ll be spending plenty of money running your air conditioner.

There’s some variation between islands, though. According to hawaiienergy.com, residents of Lanai pay an average of 36.67 cents/kWh. On Molokai, the average is 33.76 cents/kWh. Oahu residents pay an average of 25.79 cents/kWh, while those on Maui pay 27.62 cents/kWh. On the Big Island, the average is 30.38 cents/kWh. Now consider the fact that the U.S. average is – wait for it – 11 to 12 cents/kWh.

Related Article: 15 Things to Know About Moving to Hawaii

Transportation

Public transportation options on the Hawaiian islands are limited to bus service. A one-month pass for Oahu’s public buses will cost you $60. You can get an annual pass for $660. Can’t commit? One-way fare is $2.50. And if you’re just visiting you can get a 4-day pass for $35.

The island of Hawaii, the Big Island, has bus service via the Hele-On Bus. A monthly pass goes for $60. A monthly bus pass for Maui’s bus lines will cost you $45, with a $2 base fare. A monthly bus pass on the island of Kaua’i is $40, with yearly passes going for $400. The islands of Molokai and Lanai have no public transportation. You can catch the ferry from Lanai to Maui for $30 each way.

If you want to skip the public bus and drive your own car, expect to pay above-average prices for gas. According to gasbuddy.com, the current average price of a gallon of gas in Hawaii is $2.90. That’s 33% above the U.S. average of $2.18. Each county in Hawaii has its own vehicle registration process and fees.

Groceries

Because so many of the food products for sale in Hawaii come from the mainland, prices are steep. According to the Missouri Economic Research and Information Center, Hawaii’s groceries are by far the most expensive in the nation. Using an index of 100, the study ranked state grocery costs. These ranged from 89.4 in Kentucky and Texas to 158.2 in Hawaii. The good news is that you can get delicious tropical fruit and coffee from local producers.

Restaurant Prices

One nice feature of the restaurant scene in Hawaii is that there’s a big price range. You can get a huge pile of tasty food (known locally as “plate lunch”) for less than $10. This usually consists of white rice, macaroni salad and an entree like teriyaki beef. Depending on the size of your appetites, one plate lunch could easily feed two people. There’s also plenty of fine dining on the Hawaiian islands. Vintage Cave Honolulu, where the Obamas have dined, has a prix fixe dinner menu that comes in at $300 per person.

Taxes

There’s good news for Hawaii residents when it comes to taxes. Hawaii has the lowest property tax rates in the nation. The state’s average effective property tax rate is only 0.28%.

Hawaii also made SmartAsset’s list of moderately retirement tax-friendly states. Why? Because the state exempts Social Security retirement benefits and public pension income from state taxes but fully taxes income from private pensions and retirement savings accounts.

Income taxes in Hawaii range from 1.4% to 11% and are considered quite progressive. So, if you’re a wealthy Hawaiian you’ll pay that 11% top rate, the second-highest marginal state income tax rate in the Union.

Check out our income tax calculator

Extras

With plenty of public beach access, free entertainment is never hard to find in Hawaii. Between surfing, swimming, hiking and paddling, outdoor enthusiasts should be able to keep themselves busy without spending too much on entertainment. If you want to take in some of Hawaii’s history, you can visit Iolani Palace, where tickets that include a guided tour go for $20.  The USS Arizona Memorial is run by the National Park Service and is free to visitors.

Photo credit: ©iStock.com/Ron Thomas

Amelia Josephson Amelia Josephson is a writer passionate about covering financial literacy topics. Her areas of expertise include retirement and home buying. Amelia's work has appeared across the web, including on AOL, CBS News and The Simple Dollar. She holds degrees from Columbia and Oxford. Originally from Alaska, Amelia now calls Brooklyn home.
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