The Housing Market Slows in Hawai’i—What Will That Mean?

The Housing Market Slows in Hawai’i—What Will That Mean?

  • Karen E. Bail
  • 08/17/22

According to a recent article appearing in West Hawai’i Today, the ongoing effects of rising interest rates are really making their presence known here on the Big Island as the number of prospective home buyers begins to cool off.

While we’ve been reporting on the ongoing housing boom over these past few years, we’ve also kept you up to date on the slowing rate of total purchases, even as the relative median sales price for both single-family homes and condominiums remains near record-highs, particularly in the Big Island’s most-desirable neighborhoods.

However, many other market factors have continued to be in play, both locally and nationally—and that includes the Federal Reserve raising the key rates several times thus far in 2022, which directly impact and raise mortgage interest rates in turn. As a result, some properties have now been on the market for more than 90 days—hardly an undue amount of time by normal metrics, but nevertheless notable given the Aloha State’s ongoing buyer’s bonanza.

The article further reports that, according to multiple listing services, there have been around 1,494 single-family homes sold in 2022 (through the month of June), down 140 sold units from 2021 at the same time. The median sales price, meanwhile, continues to hover over half a million for the entire island thus far, a 9% increase from the median in 2021.

What’s more, the median sales prices are still higher in every single Big Island district save one (Ka’u) than last year, yet only Puna has sold more homes than in 2021, with an increase of 130 total sales so far in the first six months of the year.

Is This Cause for Concern?

In a word, no. Although no one has a crystal ball when it comes to the local and national housing trends, we’ve been reporting ourselves on how Hawai’i’s market normalizations are both expected and, well, normal!

With so many other factors at play (inflation, global conflicts, etc.), fears of a recession are also to be expected. While experts are decidedly mixed on their outlook in terms of a more-severe drop, the aforementioned West Hawai’i Today article cites belief that any looming recession, should it occur, would be bolstered from the lows of the 2008 housing market crash, as thee was more ‘real money’ in this current season of spending, and less lending done upon less-than-solid foundation as there was 15 years ago.

In short, the (relative) cooldown of the Big Island housing market is still likely in line with more-traditional models of growth, and we still expect to see the numbers fall in line with the 2019 rate of growth as the year goes on—which were certainly substantial in and of themselves.

Aloha to you, and mahalo for reading!

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Karen provides the most current and accurate market information, tapping into her vast network of industry professionals. She continually draws from her extensive marketing experience to offer creative marketing strategies and produce impeccably high-quality marketing materials.