Hawaii’s luxury real estate market is soaring to all-time highs fueled by several factors including pent-up demand from the coronavirus pandemic, record low interest rates and rising equity markets.

In the first three quarters of this year, homes valued at $3 million or more saw sales volume rise 234.5% compared with the same period in 2020. Deal volume hit a record-breaking $3.7 billion, according to Hawaii Life’s Luxury Market Report. But sales of homes priced above $10 million have climbed at an even more robust pace — trouncing state records.

“It’s just been like a rocket ship,” said Hawaii Life Real Estate CEO Matt Beall. “Referring strictly to the data, it’s just an incredible, incredible event for the market.”

Beall, who’s been selling real estate in Hawaii since 1998, said he’s never seen a faster moving market, as the vast majority of the high-end transactions his firm has brokered are being purchased in all-cash deals.

“There were people showing up, they’re like, ‘Okay, I’m [going to] … offer on this house sight unseen. … It’s going to be a two-week closing. I’m going to have a 13-day due diligence, I’m going to fly in on the 12th day, … meet with all the inspectors, … and move in on the 14th day.'”

Beall said the pace has been “aggressively quick” with some $20 million deals closing inside of 30 days.

“I think that pace caught not just the profession off guard, but also the sellers. You know, it’s like … that’s not normal,” he said.

The state’s previous record for volume was set in 2017, when the first three quarters of the year saw 317 transactions and $1.67 billion in total luxury home sales. Over the same time period, 2021 saw more than double the sales volume and two times the transactions, with 634 sales of homes priced above $3 million. That’s an average of about 16 luxury homes selling per week, every single week for 39 weeks straight.

“The volume and the velocity of Hawaii’s real estate market have shattered every record and historical norm previously held,” said Beall in his report.

Remarkably, the gains are coming at a time when most foreign buyers have been unable to visit Hawaii and participate in the record-breaking buying spree due to Covid-19 restrictions. In 2019, foreign buyers accounted for about 4% of home sales in the state, Beall said.

“It’s really significant to me that all of this, or the great majority of it, it’s been done domestically,” he said.

Real estate firm Hawaii Life is having a record-breaking year as well, Beall said, with more than $3 billion in sales over the first three quarters. Sales of luxury homes accounted for $1.38 billion of the total sales volume.

According to the data, the average luxury home in the state sold for more than $6 million, up 12.4% over the same period last year, with an average price per square foot of $1,795.

“We are seeing buyers from the entertainment, technology, and finance sectors purchase both high-profile and off-market listings, and for record-setting prices,” said Beall in the report.

Most dramatic in this high velocity market was the staggering growth seen in the ultra-luxury market, which includes homes priced above $10 million. In the first three quarters of 2021, there were 64 transactions totaling $1.06 billion in sales in this segment — a 602.9% change in dollar value over the first three quarters of 2020 and more than six times the number of transactions.

Despite the market’s velocity and its stratospheric rise, Beall does not see signs of frothiness.

“I don’t actually feel like it’s super frothy yet and that it’s all just going to come crumbling down. But I think it’s just my sort of cognizance of how, how deep the demand is and how tiny the market is,” Beall said.

Among the 64 transactions that topped $10 million is a deal involving legendary guitarist Carlos Santana. He purchased an 8,173-square-foot mansion on the island of Kauai for $20.5 million. Beall said his firm represented both Santana and the seller. 

Across the state’s eight major islands, most of the growth in ultra-luxury sales came from the Big Island, which saw a 1,582% change in sales volume over 2020. That gain was followed by Maui, which saw a rise of 644% in sales volume, and Kauai, which was up 640%.

In the first three quarters of 2021 the Big Island, accounted for $393 million in sales volume, or 37% of the state’s total sales in the ultra-luxury category.

Beall’s company represented Capital Group portfolio manager Claudia Huntington, who sold her 6,674-square-foot residence on the Big Island. The home is comprised of seven pavilions overlooking Kauna’oa Bay. It sold for $18.53 million, or about $2,776 per square foot.

“I’m actually weirdly bullish about value. … One thing I know about Hawaii as compared to say, Florida or New York … we are like literally a speck of sand, surrounded by 2,000 miles, it is a tiny, tiny market,” Beall said, adding that the market has a dwindling inventory.

“If you look at any inventory chart, it’s like, down and to the right, and flatline. Prices are being pushed up by a lack of supply,” he said.

High profile sales have also brought attention and interest to the tropical market. Mark Zuckerberg and Priscilla Chan reportedly purchased 600 more acres of land in Kauai for $53 million in March, bringing their total ownership stake on the islands to about 1,300 acres. 

Here’s a closer look at Carlos Santana’s new island home on Kauai.

According to the listing, Santana’s compound is comprised of three main buildings, or pods, connected by a common outdoor living area.

The home has expansive views of lush, green mountains and Hanalei Bay. 

The central area can be used for dining al fresco.

It features a glowing onyx bar and barbecue that sits underneath a retractable glass roof.

There is a lanai-style lounge under vaulted stained-wood ceilings.

The main pod spans 3,738 square feet including a kitchen with two stainless steel Wolf ovens, two sinks, custom wood cabinetry and a stone-covered island at its center.

The largest pod includes a living room and a formal dining area.

The interconnected architecture is designed to frame the island’s breathtaking scenery.

A second pod includes a 1,275-square-foot owner’s suite, plus a study.

An outdoor shower is tucked behind a stone wall and surrounded by lush gardens.

The estate’s third pod houses two of the home’s four ensuite bedrooms.

The rooms are steps away from a saltwater infinity-edge pool with a hot tub and shallow-water sun ledge with seating for two.

The home sits on a 0.81-acre lot. Real estate taxes last year were $44,776, the listing said.