Recently, Hawaii Life released its 2023 Year-End Market Report. I am excited to share some insights and observations that paint a promising picture for the future of real estate on this beautiful island. Here are some highlights from the report, and you can also view the full copy below.
Hawai'i Island Luxury Market - $3M+
"Hawai'i Island's $3M+ market holds steady, with 2023 sales trending upward.
2023 was the second year in a row where luxury homes' end-of-year availability on Hawai'i Island increased, from 35 homes in 2021 to 51 in 2022 and 56 in 2023. Hawai'i Island luxury properties sold in 83 days in 2022 and only rose slightly in 2023 to 92 days. 2023 was the second lowest year ever for days on market, with 2022 being the lowest year ever. This indicates continued strength in the Hawai'i Island luxury real estate market."
One of the standout features of the Hawai'i Island real estate market this past year has been the notable increase in inventory. This surge in available properties provides prospective buyers with a diverse range of options, catering to various preferences and budgets. The expanded inventory has not only fueled healthy competition but has also given buyers the upper hand in negotiations, fostering a more dynamic and balanced market.
"Despite the 2023 Hawai'i Island real estate market being down from a sales volume perspective, median sales prices have hit record levels for both the year ($510,000) and Q4 2023 ($532,000). The Big Island's inventory situation also improved this year. After dipping to its lowest point in Q2 2021, the number of available homes on Hawai'i Island grew in 2022. There was a slight dip in Q1 2023 to 570 available homes, followed by an immediate increase to 575 in Q2 2023, 606 in Q3 2023 and 682 in Q4 2023. Average Days on Market (DOM) followed the inventory trendline to an extent. In Q2 2021, homes started to sell significantly faster than previous historic levels. About a year later, in Q3 2022, sales cycles began to lengthen. Average DOM increased to a peak in Q2 2023 at 75 days. In the last two quarters of 2023, the average DOM declined to 68 days in Q3 2023 and to 63 days in Q4 2023. Where we see the weakness in the Hawai'i Island real estate market is the total number of sales, which has continued to decrease since the peak of the pandemic. Q1 2023 was the weakest quarter of 2023, with Q4 as the second weakest. The total number of sales in 2023 (1,940) is the lowest since 2014 (1,881)."
Median Sold Price Strength
Despite the rise in inventory, the strength of the median sold price is a testament to the enduring appeal of Hawai'i Island as a real estate investment destination. The consistently increasing median sale price reflects the island's resilience and attractiveness to investors. As we analyze the data, it becomes evident that real estate investments on Hawai'i Island have historically been sound and secure, offering stability and growth over time.
"The 2023 median sold price (the middle value of all the sold prices) of single-family homes on Hawai'i Island was $510K, an increase of +2% from $500K in 2022. (*Aggregating Median Price statistics on Hawai'i Island should be interpreted carefully due to varied sales volume and price points across the island.) There is great strength in Hawai'i Island median sold prices. Since 2011, Hawai'i Island has had almost yearly increases in the median sold price, with 2023 setting an all-time record of $510,000. This strength appears to be continuing, as Q4 2023 set the record as the highest quarter ever at $532,000."
10-YEAR MEDIAN HOME VALUE
"Over the past decade, the real estate market on Hawai'i Island has experienced significant appreciation. Hawai'i Island's median home price is +72.8% higher than it was ten years ago, and the appreciation varies dramatically by zip code. Looking beyond the anomaly of the pandemic surge, the long-term outlook for Hawai'i Island real estate remains strong and resilient."
Decreasing Interest Rates
Adding to the optimism is the welcomed trend of decreasing interest rates. Lower interest rates make homeownership more accessible and affordable, driving demand and fostering a positive environment for buyers and sellers. This trend not only stimulates the real estate market but also opens up opportunities for individuals who may have been on the fence about entering the housing market.
Outlook for the Future
Looking ahead, the confluence of increased inventory, a robust median sold price, and declining interest rates position the Hawai'i Island real estate market for continued growth and prosperity. The unique blend of natural beauty, cultural richness, and a diverse range of properties makes this island an attractive destination for those seeking to invest in a piece of paradise.
As a Hawaii realtor passionate about helping clients find their dream homes, I am thrilled about the positive trajectory we are witnessing. Whether you're a first-time homebuyer, an investor, or looking to upgrade your island lifestyle, now is an opportune time to explore the possibilities that Hawai'i Island real estate has to offer.
The combination of increased inventory, a resilient median sold price, and declining interest rates sets the stage for an optimistic and more stable market. As we move forward, I am committed to helping you navigate the exciting opportunities that await in this tropical paradise. Cheers to a promising future filled with homeownership dreams coming true on Hawai'i Island!
Download the full report below.
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