Home sales on the Big Island are still extremely vigorous, but clouds are forming on the horizon for prospective local buyers.
According to multiple listing service data, 282 single family homes were sold on the Big Island in March, an increase of 58 from February. The median sales price also has risen from $410,000 to $517,500 since March 2021.
In total, 683 residential sales were made on the Big Island in March, and 1,734 in the first quarter of the year. That’s slightly behind last year, when 1,886 homes were sold by the end of March.
In Puna, 289 homes have been sold so far this year, 17 fewer than last year during the same period. But there have been 19 more home sales in South Hilo this year compared to last, with 105 so far.
North Kona’s residential sales dropped by one-third from last year, with 132 sales made so far in the first quarter.
The median home sales price has increased almost entirely across the board. To date, the median home sales price for the entire island is $525,000, a 16% increase from last year.
In North Kona, the median price was about $827,000, up 3.5% from 2021, and $839,596 in South Kohala, up about 7% from 2021. In South Kona, the median price was $547,320, up 9.7% from 2021, and in North Kohala it was $819,000, up about 9.6% from 2021.
In South Hilo, the median home sale price in March was $525,000, a jump of 40% from last year. And in Puna, where the median sales price was $370,000 in March, the increase was the same.
Only in North Hilo and Ka‘u did the median sales price decrease. But there have been only seven home sales in North Hilo this year so far, so it is a statistical outlier, while in Ka‘u the median sales price dropped by only 3%, from $284,000 last year to $274,500 this year to date.
“It’s still very much a seller’s market,” said Jessica Gauthier, principal broker at Salt Water Real Estate in Hilo. “Hilo has about one month’s worth of available inventory, and Puna has about two months, which means it’s a very strong seller’s market.”
C. J. Kimberly, owner of C. J. Kimberly Realtors, said new parcels that go on the market invariably get multiple offers that eventually go above the seller’s asking price, and leave the market within weeks. According to MLS data, homes sold on the Big Island were only on the market for a median time of 14 days.
Gauthier said that, as has been the case for much of the pandemic, the rise of remote working is a major cause for the robust market.
“What’s kept East Hawaii tamped down in the past is that there aren’t as many jobs over here,” Gauthier said. “But now that good-paying jobs are going online and people can work anywhere, people are moving here from all over.”
Despite interest rates increasing — the average rate for a 30-year fixed-rate mortgage in the U.S. is now more than 5% — Kimberly said buyers are not necessarily being discouraged from seeking mortgages. Yet.
“It’s hard to tell what rate will dissuade people,” Kimberly said. “There’s just too much demand to tell right now.”
But, Gauthier said, this surge of off-island buyers is muscling out locals seeking to buy a home. A Big Island resident who needs to take out a mortgage to afford a home will be a less-attractive client than someone from the mainland who is able to pay for an entire home with cash, she said.
And with interest rates expected to rise further this year, Gauthier worries that locals will be even less able to afford homes here.
“It just proves that, legislatively, we need to work on more affordable housing now,” Gauthier said.
Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.