The Luxury Real Estate Market is Stronger Than Ever

  • Karen E. Bail
  • 07/5/22

Is the Big Island headed for a Big Letdown in the luxury housing market?

Over the past month or two, the typical interest rates on a new home mortgage have been surging across the nation—and when we combine this with our seemingly never-ending supply chain issues, hints at an economic pull-back gaining traction, and the ongoing lack of available units for sale on the marketplace, it would appear to be a safe bet to forecast a slowdown in both home purchases and in median sales price for some of the Big Island’s most-desirable neighborhoods…or so it would seem.

The national market may well be showing signs of a cooldown, but the Big Island of Hawai’i is going full steam ahead on luxury homes!

This past May, over 67 luxury units were sold, according to a recent report released by the Corcoran Group (and as reported by Pacific Business News). The homes ranged in price from $950,000 through $9 million-plus, situating the Big Island of Hawai’i as one of the healthiest markets in all of the U.S. in the month of May.

According to the recent report, “despite the obvious softening of the market, when compared to pre-Covid numbers, May 2022 statistics still show over 100%-150% more sales and inventory at least 40% lower than average.” The report goes on to note that "May 2022 registered a 32% increase in sales against May 2021, although there was small decrease in numbers against previous months. However, price points remained steady."

In other words—while overall sales remain robust in many of the Big Island’s most sought-after locales (think Kailua-Kona, Waimea, the entirety of the Kohala Coast, etc.), a severe lack of inventory remains at issue, both here in Hawai’i and across the mainland. While luxury inventory has increased month-over-month since the New Year (and is 14% higher than this same time last year), a ravenous buying public has continued to jockey for position in snapping up everything coming to market, meaning there’s been precious little time for supply to catch up.

"The silver lining in that, especially for buyers, is that as inventory levels rise, they will be running into less competition and perhaps some price reduction. So it will equal out to be a relatively smooth transition [from a strong seller's market to a more equalized seller's market," according to Gregg Antonsen, senior VP of luxury sales at Corcoran. "I don't think we're going to see any significant shifts in the near-term, however.”

You heard it here first, folks: Hawai’i’s wild ride in real estate is set to continue in the near term, though there are growing signs that supply will catch up at some point to give expecting buyers some much-needed breathing room. In the meantime, stay tuned for all the latest developments on the Big Island marketplace from Karen Bail and co!

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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.

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