Reuters ran an article about the College Town real estate phenomenon, and I think many people don't realize that Honolulu is a major College Town. The University of Hawaii in Manoa is a huge part of the Honolulu cityscape. 

And since a lot of the Campus Housing at University of Hawaii is really bad, (although some was just renovated) it can make great sense to buy a condo for your kids rather than rent.  And that is exactly what some recent clients of mine did.  They found that buying a nice townhouse meant their daughter could live in a nice area, and they could have a nice place to stay when they visited her.  

Plus, many of the rentals around UH Manoa are so expensive and so gross, it's hard to imagine your kids living in them. I've seen some nasty apartnments in Manoa, with mold everywhere, and roaches the size of small cats. manoa skyline

In the article, a parent named Kate, said “We decided we could create a safe, good quality home for her and we thought it would be a good investment on top of it.”

From the article: "Kate and Dale represent a new trend in the already-popular college town real estate market: they're called “parent investors,” a savvy group of homebuyers who are opting to purchase a house in their kids' college town instead of spending money on rent or dorm fees."

"The lure of college real estate appears to be recession-proof. Seventy-three percent of those surveyed said they see a significant number of investors buying homes near campus and renting them out despite the economic downturn, with only 21 percent seeing a decrease in this trend over the past five years."

"Costs are a big factor: Room and board fees for 2010-2011 have seen a 4.6 percent jump at a public four-year state universities and a nearly 4 percent rise for private nonprofit universities, the College Board reports."

Stanford University's Palo Alto, California is the most expensive college town market, with an average home listing price of $1,385,652, and Honolulu is the 2nd highest in the nation, at over $800k. 

College towns like Honolulu have plenty to offer in terms of culture, restaurants, medical facilities and a robust economy.

And that is just another reason that Oahu real estate has done so much better than the Neighbor Islands of Maui, Kauai, Mokokai, Lanai, and the Big Island.