HILO — Home sales on the Big Island last year lagged behind 2017 thanks to the upheaval caused by the Kilauea Volcano eruption.
Although the first half of 2018 saw home sales rising from the previous year, particularly in Puna, the year ended with 6 percent fewer home sales on the island than in 2017.
According to MLS sales data, 2,331 home sales were made on the island in 2018, 166 fewer than were made in 2017. Of those sales, 855 were made in Puna, which also was 6 percent, or 62 fewer, than were made the previous year.
Nearly all districts on the island experienced similar drops last year. South Hilo home sales dropped by nearly 9 percent, Hamakua sales by 16 percent, North Kona by 10 percent and South Kona by 17 percent.
The only districts to not drop from 2017 were North Hilo, where three more homes were sold than the previous year for an increase of 14 percent; South Kohala, which saw 16 more sales, or 6 percent; and North Kohala, which had 67 home sales in 2018, exactly the same amount as in 2017.
One contributor to the shortfall was the Kilauea Volcano eruption in lower Puna, which began in May and destroyed more than 700 homes over the course of several months.
“We didn’t get any calls at all between May and July,” said Nancy Cabral, owner of Coldwell Banker Day-Lum Properties. “Or, at least nobody looking to buy. Plenty of people looking to rent.”
While the number of sales dropped from 2017, median sales prices stayed generally static throughout the island. The islandwide median residential sales price increased by only 2 percent, or $8,500, while the South Hilo median residential sales price increased by 8 percent. Every other district’s median price increased or decreased by less than 5 percent, save for North Hilo and North Kohala, which see very few sales relative to the rest of the island.
Cabral said that although the market slowed down in the months immediately following the start of the eruption, Day-Lum Properties had a strong year, and she anticipates a similarly strong 2019.
Many of the homeowners whose homes were destroyed by lava have begun to get their reimbursements from the Federal Emergency Management Agency, Cabral said, and are using them to purchase new homes on the island — even in lower Puna again.
“Puna still has a lot of activity,” Cabral said. “There’s still a real desire to live here; people like that it doesn’t rain as much; they like the isolation.”
Kona Moran, broker with Hilo Brokers Ltd., said the housing market already has begun to make a resurgence in the last few weeks, with January through March typically one of the market’s peak seasons.
“It maybe hasn’t taken off as big as in the past, but it’s still very vigorous,” Moran said.
While the eruption was a factor in the 2018 midyear slump — giving prospective buyers “noticeable trepidation” — Moran said fluctuations in nationwide equity markets, as well as the island’s shrinking housing inventory, also contributed to the shortfall.
Some properties that would ordinarily take months to sell are now selling within weeks, shifting the market to something closer to a seller’s market, he said.
Both Cabral and Moran think 2019 will be more stable, barring the potential for similar volcanic disasters.
Moran said real estate markets are expected to remain steady, with no drastic changes this year, which he interprets as a good sign, considering that the years preceding the 2008 real estate crash saw a dramatic increase in activity.
“There’s still lots of demand for rentals,” Cabal said, adding that areas like Hawaiian Paradise Park are popular rental markets. “I always tell people that if you’re looking for a good investment, rental properties are usually pretty safe.”
“You know, there’s always ups and downs, but at the end of the day, we’re living in Hawaii,” Moran said. “There’s not much that can put a damper on that.”