HILO — Home sales continue to lag behind last year’s sales on the Big Island, while home prices remain ahead — although the gap for both is shrinking.
At the beginning of the third quarter, residential sales across the island are down by 4.2% from last year, while the median sales price is up by 2.9%, continuing a trend from the first quarter of the year.
However, the gaps between 2018 and 2019 are narrowing for both statistics: home sales were down by 13% at the end of March, while the median sales price was up by 11%.
Three districts on the island have seen an increase in home sales from last year — sales in South Kona and North Kona have both increased by approximately 4%, while exactly one more home has been sold in North Hilo, an increase of 12% — and South Hilo saw the same number of homes sold so far this year as last year.
Puna district, then, appears to be the primary driver of the shortfall in home sales. In total, 52 fewer homes have been sold on the island, while sales in Puna are down by 7%, or 30 homes.
“It’s slow all over lava zones one and two in general,” said Century 21 real estate agent Lance Miyasato. “Because now it’s very hard to get insurance over there.”
Prices in Puna are down from last year as well, dropping by 3%, or $7,000. Prices in South Hilo saw slight improvement — 5%, or $18,500 — while North Kona dropped by 2%.
The greatest increase in price was in North Kohala, where the median sales price increased by 24%, or $198,000. However, only 31 homes have been sold in that district this year, leading to a 26% drop in sales, which is also the greatest decrease on the island.
Miyasato said he does not think the lingering aftereffects of the Kilauea eruption have influenced the market significantly this year. While Miyasato said that some people are still buying homes thanks to loans from the Small Business Administration, those sales are few enough now that he does not think they influence the overall market.
“I think we’re only just now getting over the effects of the eruption,” said Koa Realty agent Harry Pritikin. “Now I think interest rates will be a more attractive factor.”
Both Pritikin and Miyasato agreed that the market is particularly interest-sensitive at the moment, with Pritikin noting that the present low interest rates are good for sales. Miyasato said he thinks the year can end with home sales comparable to last year’s so long as interest rates remain as they are, although Pritikin said the market is somewhat “in a state of flux” because of confusion regarding the current presidential administration.
Pritikin said it might be possible to see the home sales and median price trends reverse themselves by the end of the year. If too many potential buyers get priced out, then sellers will have no choice but to lower their prices, hopefully leading to higher sales.
“I’m hoping (prices) go down, but just a little bit, and it levels off,” Pritikin said. “I don’t know if the market has ever actually been level, that might be nice.”
Email Michael Brestovansky at email@example.com.