2017 a strong year for Big Island real estate

HILO — The Big Island real estate market ended 2017 in a strong position after residential sales increased islandwide from 2016.

Not only did the final quarter of 2017 see residential property sales on Hawaii Island rise slightly — from 2,307 in 2016 to 2,494 — the median residential sales price increased by about 6 percent to $350,000, according to listing service sales data.

In total, more than $1.4 billion was spent on residential properties on the Big Island in 2017, an increase of 15 percent from the previous year.

Harry Pritikin, chief broker at Koa Realty, said the island’s seller’s market is still especially strong in Puna, in particular Hawaiian Paradise Park, where prospective buyers are attracted to low prices, high inventory and “the best weather outside of Lava Zone 2.”

Throughout 2017, Puna saw considerable ongoing growth, with 916 residential sales year round. The median residential property price of those sales increased by 14 percent to $225,000.

Ted Stubbs, chief broker at Hawaii Home Store Inc., said most of his Puna sales were made to mainland retirees last year, but the district is also attractive to young local families or to Oahu families who can purchase much larger properties on the Big Island for the cost of an Oahu property “the size of a postage stamp.”

Meanwhile, despite a strong third quarter, residential sales remained consistent with 2016, falling from 359 properties sold to 357. Concurrently, the median sales price in Hilo dropped by about 2 percent.

“Hilo just doesn’t go through ups and downs like other places on the mainland,” Stubbs said. “People aren’t really going to speculate on Hilo properties.”

However, Stubbs noted that he was aware of some Hilo homes that sold for half a million dollars in 2017, which he said would have been unheard of several years ago.

Independent broker Mike Griggs said Hilo’s market, which saw consistently strong sales throughout the year, remains one of the strongest on the island, saying on Friday that 85 Hilo properties were sold within the previous 90 days. Griggs said the Hilo market is more stable than more tourist-friendly markets in Waikoloa and Kona.

By comparison, sales in North Kona increased commensurately with the rest of the island, from 475 sales to 540. The median sales price for a North Kona residence was $637,450 in 2017.

“Kona is one of those markets that has booster rockets beneath it,” Stubbs said. Because of greater tourism on the west side of the island, the region sees many mainland residents purchasing vacation rentals.

However, Griggs said the Kona market is “not gangbusters,” noting with some surprise that home appreciation rates for Kona in 2017 only averaged around 2 percent, while the rest of the island — and, in fact, the rest of the nation – averaged about 5 percent.

Griggs also observed that most residences being sold in Kona are at the higher end of the price range, with very few selling for less than $500,000. Unless new housing developments offering mid-range residences emerge, the market will inevitably stall in the future.

Despite this, Griggs said he is confident for the 2018 market. A new tax plan signed in December, though controversial, will benefit middle-class homeowners, he predicted, while the bullish Japanese economy will herald more international visitors to the island.

“Barring any sort of global catastrophe, I think we’ll have a good year,” Pritikin said.

Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com