Big Island median home prices up as sales dip slightly

Despite the worldwide upheavals caused by the COVID-19 pandemic, home sales on the Big Island have barely slowed this year.

According to Multiple Service Listing data, there were 5% fewer home sales on Hawaii Island between Jan. 1 and June 30 than during the same period last year, a decrease of only 58 sales. Meanwhile, the median sales price continues to increase, rising from last year by about 4% to $395,000 through the second quarter of this year.

The numbers are similar on a district-by-district basis. While sales numbers in South Hilo nominally decreased — by 6%, or nine sales — during 2020’s first two quarters, the median price increased by 9% to $404,000. Sales in Puna actually increased by three sales from last year, while the median sales price rose by nearly 3% to $224,000.

On the other side of the island, the difference from last year was more stark, but followed the same trends. North Kona home sales dropped by 16% or 48 sales, but the median price increased by 16% to $750,000.

“My expectation was that there would be a slowdown, or a flattening, to be honest,” said Jared Gates, president-elect of Hawaii Island Realtors. “But the market in Hilo and Puna is very robust. There’s low interest rates driving a lot of local, first-time buyers.”

With interest rates low — hovering around 2%, Gates said — many people are leaping at the opportunity to buy a home at a good cost. In some communities such as Hawaiian Paradise Park, Gates said a home can be put on the market and sold within a matter of weeks.

Gates acknowledged that the market wavered slightly during the first few months of the pandemic as newly unemployed buyers were forced to back out of the market and out-of-state buyers were unable to visit the island.

“But it turns out there’s a good number of people who are OK with buying a home sight-unseen,” said Kapono Pa, a real estate agent with Savio Realty in Hilo.

Pa said that, thanks to virtual property tours, there is little barrier these days for mainland buyers to make informed purchasing decisions remotely, while the pandemic seems to be encouraging Big Island sales. Pa said he has heard from other agents that many mainland buyers are seeking Big Island properties on which to wait out the pandemic, and added that others are converting rental properties on the island into their primary residences.

“It makes sense,” Pa said. “We’ve had a pretty good track record — until recently — in terms of keeping our (COVID-19) numbers down.”

Pa added that local and out-of-state buyers have a myriad of financial assistance options to support buying or renting a home, and advised prospective buyers to not walk away from free money.

Both Gates and Pa said they believe that, unless the high demand for Big Island homes decreases — “and I don’t think it will, this is Hawaii,” Pa said — median home sales prices will continue to rise, as they have for the past 10 years.

While Gates said the rising prices don’t feel as precipitous and uncontrolled as they did during the housing bubble that led to the 2008 financial crash, Pa mused that, if prices continue to increase as they are, they will eventually begin to price out local residents, which he said will be harmful for the community.

Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.
Source: Hawaii Tribune Herald