Build or Buy? Navigating the Oahu Housing Market: Vacant Land vs. Resale Homes

With more than two decades of experience helping buyers and sellers navigate the unique real estate landscape of Oahu, one of the most common questions I get is this:

“Should I buy a vacant lot and build, or should I buy an existing home?”

It’s a question that speaks to more than just real estate—it’s about lifestyle, vision, and long-term investment. Each path has its own pros and cons, and in this article, I’ll help you break down the considerations so you can make a decision that aligns with your goals.

The Appeal of Building a New Home on Vacant Land

1. Customization & Control

One of the biggest draws of building on a vacant lot is the ability to design your dream home from the ground up. You can control the layout, finishes, materials, energy efficiency features, and even the feng shui of the property. On an island where land is limited, the opportunity to shape your living space exactly to your liking is a rare luxury.

2. Modern Efficiency

New builds often come with the latest in energy-saving features: solar PV, high-efficiency appliances, modern insulation, and smart home technology. Over time, this can lead to substantial cost savings—especially with Hawaii’s higher-than-mainland utility rates.

3. Lower Maintenance in Early Years

A brand-new home means everything—from the roof to the plumbing to the electrical systems—is fresh. This typically results in fewer repair expenses and surprises in the first 5–10 years.

4. Potential for Equity Growth

If you buy land wisely and manage construction efficiently, the finished home may appraise for more than your total cost, giving you built-in equity. In the Oahu market, where real estate continues to appreciate, this can be a savvy long-term investment.

Challenges of Building New on Oahu

1. Land Availability & Cost

Vacant residential lots on Oahu are rare—and often pricey. The most desirable lots (with ocean views, gentle topography, and proximity to amenities) are seldom available and highly sought after and can drive your budget up quickly.

2. Permitting & Regulations

Building in Hawaii is not like building on the mainland. Local zoning laws, environmental regulations, and permit backlogs can delay your timeline significantly. For example, it’s not uncommon to wait 12–18 months just to break ground, especially in areas like East Honolulu or Kailua.

3. Construction Costs

The average construction cost per square foot in Hawaii is significantly higher than most parts of the U.S., due to the cost of importing materials and a limited pool of skilled labor. Budget overruns are a frequent reality, especially if you’re building on a sloped or irregular lot.

4. Time & Project Management

Managing a custom build requires patience, decision-making, and coordination. If you’re not on-island full-time, or if you’re juggling a busy career, this can become a logistical and emotional challenge. Hiring a reputable contractor and perhaps a project manager is essential—but also adds to your budget.

The Case for Buying a Resale Home

1. Speed to Move-In

Buying a resale home typically allows you to move in within 30–60 days. For many families relocating to Oahu or making a lifestyle change, this speed is a major advantage.

2. Predictability

With a resale, what you see is what you get. You can inspect it, appraise it, and walk the neighborhood before making your final decision. There are fewer unknowns than with a construction project.

3. Mature Landscaping and Infrastructure

Many resale homes—especially in established neighborhoods like Kahala, Manoa, or Lanikai—offer lush landscaping, mature trees, and built-in irrigation, which can take years (and thousands of dollars) to recreate on a new build.

4. Potential for Value-Add Renovations

Not all buyers want to start from scratch, but many do want to put their stamp on a property. A well-located resale home with good bones offers the opportunity to renovate selectively—whether it’s updating kitchens, bathrooms, or opening up the floor plan—and add value without the challenges of ground-up construction.

Challenges with Resale Homes

1. Compromises in Design

Unless you get lucky, most resale homes require some level of compromise—whether it’s layout, finishes, or condition. Some homes on Oahu were built decades ago and may not reflect modern lifestyles.

2. Maintenance and Repairs

Older homes may come with deferred maintenance issues—think termite damage, outdated plumbing, or aging roofs. While home inspections help, surprises can still emerge after closing.

3. Competition & Bidding Wars

Oahu’s real estate market remains competitive, particularly in desirable areas. Well-priced homes in good condition often receive multiple offers, driving prices up and sometimes requiring buyers to waive contingencies.

So Which Path Is Right for You?

The decision to build or buy depends on a variety of personal factors:

• Timeline: Do you need to move in soon, or do you have time to build?
• Budget: Are you prepared for the potential overages of custom construction?
• Lifestyle: Are you dreaming of a perfectly tailored home, or would you prefer the convenience of a turnkey option?
• Location: Is your heart set on a specific neighborhood where vacant land may not exist?

I’ve guided dozens of clients through both processes—from securing rare ocean-view lots and assembling construction teams to negotiating strategic resale purchases in some of Oahu’s most competitive neighborhoods. Every buyer’s journey is different, and the key is aligning your choice with your personal and financial goals.

Let’s Talk Strategy

If you’re weighing your options between building and buying on Oahu, let’s have a conversation. I can provide detailed market comps, connect you with architects and builders, or help you explore neighborhoods where your vision can come to life—whether that’s a new custom home or a timeless kama‘aina classic ready for a new chapter.

Reach out anytime—I’m here to help you make your next move with clarity and confidence.

Jon S. Mann
Broker-in-Charge | Hawaii Life – East Oahu