After a moderately strong 2024, real estate agents are predicting a robust housing market on the Big Island in 2025 — but not necessarily an affordable one.
According to multiple listing service data, there were 2,009 single-family homes sold on the island in 2024, a 3.6% increase over 2023. Those sales also generated 22.3% more money than 2023 sales, with more than $2 billion spent purchasing single-family residences last year.
The median sales price for a home in 2024 was $545,000, about 7% higher than in 2023.
Most of the island’s more populous districts saw increased sales. There were 22 more homes sold in Puna last year than in 2023, bringing the total up to 842, while sales in North Kona jumped from 356 in 2023 to 410 in 2024.
In South Hilo, home sales only increased by a negligible amount, from 240 to 243. And in Ka‘u and South Kohala, sales decreased by seven and eight homes, respectively, compared to 2023.
“The fourth quarter of the year is usually the slowest, but this one was better than the third quarter,” said Ed Torrison, principal broker at Hilo Bay Realty. “It was one of the better fourth quarters I’ve seen in years.”
Even though sales remain lower than in 2022 and 2021 — both particularly robust years for the market before interest rates and inflation slowed activity — Torrison said the Big Island housing market can’t and shouldn’t be judged by a couple exceptional years of runaway sales.
However, a strong housing market doesn’t necessarily mean an affordable one.
Mike Drutar, principal broker and owner of NextHome Paradise Realty in Kona, said the Big Island market has effectively bifurcated, with one set of buyers making the lion’s share of home purchases.
“When you look closer, you see that higher-end properties are having disproportionately more transactions than in the last few years,” Drutar said. “And lower-end properties are having disproportionately fewer.”
In short, Drutar said, cash buyers are less deterred by higher interest rates and are purchasing Big Island properties, while residents who need mortgages are more significantly impacted by the high rates and are consequently less likely to be able to afford a home.
Most of those higher-scale buyers — many of whom are buying properties for vacation rentals — are from out of state. Torrison said the mainland produces a steady stream of “people leaving with cash in pocket.”
“I can’t help but think that all of these recent disasters … it happens all the time, people say they’re tired of this and look for a place in a better climate,” Torrison said, referring to the ongoing Los Angeles wildfires and the recent winter storms that froze much of the U.S. heartland.
Drutar said the only viable path toward housing affordability on the island lies in improving supply.
“For some reason, when we talk about housing, people forget about the fundamentals: supply and demand,” Drutar said.
But, Drutar went on, it’s difficult to tell whether 2025 will improve the situation for local home-buyers.
“There’s so many ‘ifs’ about coming economic policies,” Drutar said, saying that the potential for a trade war or more hardline immigration policies — both things that president-elect Donald Trump has signaled strong support for — will likely have inflationary impacts, which will make it even harder for lower-income buyers to afford a mortgage, and encourage higher-income buyers to invest in real estate as a hedge against inflation.
Torrison said buyer interest remains steady, even though the impacts of the impending Trump administration have yet to be seen.
“I’m hearing from a lot of folks in the market expecting to do good business,” Torrison said. “I’ve been talking with an agent in Costa Rica, and she’s expecting to see a lot of money flowing this year.”
But, Torrison added, “Nobody in my business is a pessimist.”
Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.
