Housing market expected to stay hot in ‘22
After a strong year for Big Island real estate, agents expect 2022 will be almost as robust.
According to Multiple Listing Service Data, 2021 had a significant increase in residential sales islandwide, a trend expected to continue throughout this year.
In total, 3,205 homes were sold on the island throughout 2021, nearly 600 more than were sold in 2020, an increase of 20%. Despite this, the fourth quarter of 2021 had fewer sales than the same quarter of 2020 — 772 in 2021 compared to 834 the previous year, a decrease of 7%.
By coincidence, there also were 3,205 vacant land sales across the island last year, which itself represented an increase of nearly 60% from the previous year.
Year-over-year, every district on the island experienced a boost in home sales in 2021, from the 7% increase in Hamakua — rising from 70 to 75 sales — to a 28% increase in Puna, where 1,240 homes were sold.
In South Hilo, 397 homes were sold last year, rising by 18% from 2020, and in North Kona, sales rose by 12% from 279 to 314.
The islandwide median home sales price also increased from $410,000 in 2020 to $480,000 in 2021.
Nearly all districts also had an increase in median home sales price, except for Hamakua, where the median price dropped by less than 1%.
The median price in North Kona by the end of 2021’s final quarter was $950,000 while South Hilo was $499,000, in Puna it was $335,000 and in South Kohala it was $1.8 million.
Jared Gates, who was president of Hawaii Island Realtors in 2021, said the buyer’s market was extremely aggressive in 2021 thanks to dwindling inventory, with home prices inflating by up to 30% “from Ainaloa to Waikoloa.”
“People would have to watch the markets pretty much every day to watch out for a property that matched what they were looking for,” Gates said. “Because it wasn’t unusual for homes to be sold in just a few weeks.”
Lailan Bento, a Kailua-Kona real estate agent, said the competitive market began to stabilize at the end of the year.
“If you were in a bidding war, you’d be competing with five or six other buyers instead of 20 or 30,” Bento said regarding the fourth quarter.
Both Bento and Gates said buyers in 2021 were a more diverse group than in previous years. While Bento said most of her out-of-state clients in the past largely hailed from western states, in 2021 more buyers were from all across the continental U.S.
Bento attributed that shift in buyer profiles to the COVID-19 pandemic. After all, she said, if people are allowed to work from home, why not make Hawaii their home?
“There are a lot of people who are selling their homes on the mainland and buying on the Big Island with that cash in hand,” Gates said, adding that the mainland housing market is similarly robust.
Whether the market can maintain this pace depends partially on whether buyers can still get loans at reasonable interest rates. Last month, Federal Reserve officials determined that the U.S. job market has nearly recovered to the point where the Fed will no longer need to suppress interest rates.
But Gates said that, barring some further unforeseen crisis, he expects the market to keep up the pace at least through 2022.
“Our economists are expecting continued growth in 2022 and continued demand,” Gates said.
“I kind of hope it slows down a little and gives us time for the inventory to increase again,” he said. “The Big Island is a special place, but a lot of the people who moved here, maybe they’ll miss being close to their families, they’ll realize the beach is actually an hour away, and they might move on.”
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