January 29, 2020||Mortgages/Economy/Market

Trend Watch: 2019 Hawaii Island Market Report

Pictured above: 75-5444 Kona Bay Drive located in Kona Bay Estates. This property (MLS 630724) sold for $1,200,000 on November 22, 2019. 

2019 was a good year to be a seller in the real estate market on the Big Island of Hawaii. Islandwide, median sale prices and the number of sales were up in both the residential and condo markets last year and, because demand continues to outpace supply, expectations are that this trend will likely continue through 2020. The bright side for buyers is that low interest rates continue to help mitigate the impact of ongoing upward price trends. Predictions are that mortgage rates may drop even lower in 2020.

Overall, the Big Island saw a 5.25% increase in the median sale price for residential properties in 2019 compared to 2018; a 1.48% increase in the condo median sale price; and there was a 3.23% decrease in the sale price for land. The factors behind the decline in the land price deserve special attention. We will return to this topic below.

First, let’s look at the residential and condo markets, starting with two charts illustrating the median price trend for a full 20 years—fitting, we think, at the dawn of 2020.

*These charts are interactive. Hover over or tap the data points for details.

The median sale price for a home on the Big Island in 2019 was $379,000, approaching but still falling short of the median prices of 2005-2007. With 2,424 units sold, the number of homes sold last year was just shy of 2017’s post-recession high by 73 units.

The median sale price for fee-simple condos on the Big Island in 2019 was $375,000, which is a new post-recession high. With 815 units sold, the number of condos sales is also a post-2005 high, but significantly below the 1,000+ units sold at the peak of the last real estate cycle.

By district—as is typical for the Big Island—2019 median sale prices varied widely from East Hawaii to North Hawaii and the Kona-Kohala coast. In East Hawaii, Puna continued to see a recovery from the 2018 lower Puna eruption, including home sales in Leilani Estates. In North and West Hawaii, inventory constraints continue to push prices above pre-recession highs in some communities.

Hawaii Island District Map with Median Prices Year End 2019
*2019 median prices by district for fee simple properties. RES = residential single-family homes. CND = condo. # of sales in parenthesis.

Islandwide, the median sale price for vacant land parcels dropped slightly from $31,000 in 2018 to $30,000 in 2019 but, as the chart above shows, the variation by district was especially substantial in South Hilo and North Kohala. Of particular interest is the 31% increase in the median sale price in South Hilo where the number of land sales dropped from 151 in 2018 to 98 in 2019, once again illustrating the upward price pressure as inventory declines. Across the island, there were fewer land sales year-over-year in all districts except North Kona (up 5.5 % from 109 to 115) and South Kona (up 6.8% from 59 to 63).

Take a deeper dive into year-over-year stats by district in these slides:

Luxury Market Update

In the $1M–$5M price range, there were 262 residential and condo sales in 2019 (184 homes and 78 condos), just one more than the 261 sales in the same market segment in 2018 (163 homes and 98 condos). The number of cash-only transactions in this category decreased year-over-year from 154 cash sales in 2018 to 129 in 2019.

Above the $5M price point, 27 residential properties and one estate villa at Hualalai Resort sold in 2019 compared to only 15 $5M+ sales in 2018.

All luxury listings currently for sale on Hawaii Island can be viewed here.

Economic Insights: What’s Ahead in the New Decade?

This video from Leading Real Estate Companies of the World® economist Marci Rossell addresses factors driving both supply and demand and how what is likely to happen with interest rates in the months and years ahead will impact the global real estate market.

If we can be of assistance with more information about what is happening locally in the Hawaii real estate market, please get in touch. We’d love to hear from you if you are considering a Big Island home search or sale this year.

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