Big Island homes are selling almost as soon as they hit the market as the real estate industry rebounds from the COVID-19 pandemic.
According to multiple listing service data, 1,626 home sales have been made in the first half of this year — nearly 50% more than in the first half of 2020, and 500 more than the in the first half of 2019.
With only one exception, every district on the island has had an increase in sales from last year, with Puna seeing a 47% increase from last year, and South Hilo a 36% increase. The exception was Hamakua, which had five fewer sales than last year, a decrease of 13%.
The island’s median home sales price has also increased by 20%, or $79,000, from last year, and is nearly $100,000 higher than the median sales price by June 2019. The Puna median sales price is $280,000, a 25% increase from last year, while South Hilo’s dropped by 2% to $395,000.
In North Kona, sales increased by 57%, with median sales prices jumping 23% to $926,000. Ka‘u sales increased by 26%, and median prices climbed 19% to $295,000.
South Kohala sales rose by 39%, and its median sales price increased by 26% to $783,000.
Islandwide commercial real estate sales increased by 125%, although the median commercial sales price dropped by 23% to $560,000.
It is a very brisk seller’s market on the island, said Lucena Nicolas, founder of Pineapple Homes in Pahoa.
“I put one house on the market, and within five days, it was already in escrow,” Nicolas said.
Julie Hugo, real estate agent with Venture Sotheby’s International Realty in Hilo, said demand for Big Island homes has far outstripped the available inventory, so homes are snapped up as soon as they are available, regardless of the price commanded by the seller.
The shortage of new housing is not exclusive to the Big Island, or indeed the state, Hugo said. However, she said that the Big Island — which remains the cheapest of the main islands to live on in Hawaii — has been a popular prospect for home-buyers in the midst of the pandemic.
“When employers started getting hit by COVID, a lot of people realized they didn’t have to come in to an office, they could work from home,” Hugo said, explaining that, with commutes no longer a factor in a social-distancing world, Big Island homes became more attractive. “I think that as employers start to move away from COVID and start going back to a hybrid model, we might see some of these homes go back on the market again.”
Other buyers have seen the pandemic as a good reason to begin retirement.
“A lot of people are selling their expensive homes in Oahu or California and moving to cheaper places,” Nicolas said. “You get people who are tired of paying a $4,000-a-month mortgage in Honolulu, and they decide to retire to the Big Island where it’s cheaper. And they’ll pay cash for a $200,000 home, even if it’s only worth $150,000.”
Nicolas added that one buyer sold a California home for enough money to buy two homes on the Big Island, using the second one as a vacation rental.
Of course, nothing lasts forever. Although Hugo said the lack of new housing developments will probably remain an issue for the foreseeable future, there could be a new source of housing available in less than a month.
“We have so many houses ready to hit the market right now, but they can’t because the current tenants can’t be evicted,” Nicolas said.
Gov. David Ige’s moratorium on evictions for nonpayment of rent expires Aug. 6. After that happens, Nicolas predicts there will be a flood of new homes on the market within a couple of months.
Meanwhile, Nicolas added that the low interest rates which have encouraged buyers lately can’t remain low forever. As the economy recovers, Nicolas said, interest rates likely will rise, cooling the market somewhat.
“Soon, it’s going to be a buyer’s market again,” Nicolas said. “But for now, the minute anyone can put a house on the market, they sell.”