Real estate outlook: Slow and steady in ‘20?

The Big Island’s real estate market ended 2019 not far from where it ended 2018, but that doesn’t mean nothing has changed.

Although the total number of residential sales islandwide only increased by 3% since the end of 2018, that tiny increase seems to indicate that the island has bounced back from the disruptions to the market caused by the 2018 Kilauea eruption.

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“Whenever people ask me how the market is now, I tell them I think it’s in a very steady place,” said Heather Hedenschau, principal broker at Puna-based Big Island Brokers. “Sellers are getting a fair price, and buyers are paying a fair price.”

According to fourth-quarter multiple listing service data, North Kona was the only district on the Big Island to see a more-than-single-digit increase in residential sales last year, jumping by 13% from the previous year. Similarly, only one district dropped by more than one digit, and that district — North Hilo — only had 21 home sales in 2019.

For the rest of the island, residential sales increased or decreased only slightly, with South Hilo and Puna differing from 2018 by less than 1%.

Median sales prices, also, barely changed last year. The islandwide median residential price increased by 5% to $378,000, but most districts saw only slight adjustments to their median prices.

“I think we can look forward to a nice, slow and steady 2020,” said Kona Moran, real estate broker for Hilo Brokers Ltd.

Moran said the market has generally bounced back from the 2018 eruption — even Puna, which sustained the most direct impacts of the disaster.

“Puna’s more susceptible to these changes, but even in Leilani Estates, there are houses selling every month now,” Moran said.

Hedenschau said that communities in Lava Zone 2 have had a generally harder time recovering, as home insurance prices have doubled in those places since the eruption. However, other communities, such as Hawaiian Paradise Park, are doing remarkably well, Hedenschau said, thanks to reasonable prices and proximity to Hilo.

Like Moran, Hedenschau said she expects a healthy and steady 2020, although she added that some dark clouds might be on the horizon.

“Everyone’s worried about the election and what that’s going to do to interest rates,” Hedenschau said. “There’s a lot of people trying to buy now before they go up.”

Because Hawaii tends to follow California market trends by about a year, whatever impact the 2020 election will have on the market will likely impact the state next year, Hedenschau said.

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“Yes, we could be doing better, but you know, we could be doing a lot worse, too,” Moran said. “In the end, we’re living in paradise. You can’t control the market, but you can control how you’re spending your time.”

Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.

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