Market for Puna District Land Cools After Eruption

Kīlauea lava flows, trade wars in Asia and rising interest rates—any three of these events could, on their own, alarm your average real estate market.

But despite recent turbulence, property prices on the Big Island continued their march upward for the first three months of 2019, with home values trending up over 11% as an all-island average when compared to the first quarter of 2018, while vacant land values climbed more than 12%.

The number of homes and lots sold declined in some markets, however, with sales volume for single-family houses dropping on average 13% (from 584 to 506) and sales volume for vacant land parcels falling an average of 33% (533 to 357) year-over-year.

Hilo home, April 2019. PC: Nate Gaddis

Hilo and Kona housing sales hold steady—land and condo sales mixed

While steep, that sales decline was anything but uniform across the island, with bedrock property markets like South Hilo and North Kona seeing no statistically significant drop in single-family home sales, despite year-over-year price increases of 9.4% and 2.5% respectively.

The average single-family home in Hilo now costs $366,500, while the typical Kona home will set you back $642,853.

Land sales were a bit more chaotic, with vacant land prices in South Hilo spiking over 55% from the first quarter of 2018 to the first quarter of 2019, while land sales volume plummeted 70% during that same time period, reflecting a contraction in the supply of buildable land within the town’s core. Vacant lots now average $252,000 per parcel in the area.

Robert Wilkinson home listing in Kona, April 2019. PC: Robert Wilkinson

North Kona, by contrast, had a 28.6% drop in sales volume for vacant land parcels, with prices dropping in tandem by about 9.6% amid a steep rise in building costs for new construction homes in the area. Land parcels there currently average $302,750.

Prices for condos in South Hilo dropped by 13% when compared to the first quarter of 2018, while sales volume plunged by 50% (from 26 to 13 condo units sold) during that same time period. Condo prices in Hilo now average $147,500.

North Kona condos held up better, with prices dipping just 2.4%, while sales volume rose by 9.68% (from 93 to 102 condo units sold) year-over-year, leaving Kona condos with an average sales price of $351,250.

Aug. 14, 2018, map of Kīlauea’s Lower East Rift Zone in the Puna District. Lava flows have not expanded since Aug. 9. PC: USGS HVO.

Puna, Ka‘ū Districts see biggest drop in volume; Ka‘ū land prices double

Unsurprisingly, the post-lava flow real estate market of the Puna District saw a steep drop in sales volume for both homes and land, with home sales sagging more than 18% and land sales dropping nearly 30% year-over-year.

Home prices for the Puna District dropped 5.2% to an average of $210,000, while vacant lot prices, surprisingly—jumped by 29.6% to an average of $28,500 per parcel. (We’ll examine a more detailed breakdown of neighborhood pricing and sales activity as more data becomes available.)

While the volume of single-family homes and vacant lots plunged in Ka‘ū for the first quarter of 2019 (by 34% and 33.3% respectively when compared to 2018), prices for homes rose by 1.7%.

As for vacant land prices? They doubled. Yes, you read that correctly. Land prices in Ka‘ū doubled between the first quarter of 2018 and the first quarter of 2019, with prices spiking from $10,000 to $20,000 per parcel on average.

Hamakua home, April 2019. PC: Nate Gaddis

Kohala housing sales fall, Hāmākua gets a bump

Sales volume for single-family homes in the Kohala District contracted in the first quarter of 2019, with North Kohala home sales falling 56.5% (from 23 sales to 10) and South Kohala home sales falling 11.7% (from 60 to 53 sales).

Home prices in North Kohala rose 7.3% when compared to the same time period in 2018, while South Kohala saw home prices fall slightly, by 2.9% year-over-year.

The average single-family home will now cost you $810,000 in North Kohala and $593,000 in South Kohala.

South Kohala condo sales and prices both dipped slightly in the first quarter of 2019, with sales volume and prices both dropping 5.1%. The average condo in the area now costs $470,000.

While the Hāmākua District historically has a low volume of turnover for single-family homes (making prices notoriously difficult to track), the neighborhood’s sales volume looked good for the first quarter of 2019, with 13 homes sold when compared to just nine home sales in the first quarter of 2019.

All data is courtesy of the Hawaii Information Service. Data may not yet include private (off-market) sales and first quarter sales reported after March 31, 2019.