Big Island Real Estate Updates | May 2023

A very active market

Kona’s Closed Sales for April Meet Expectations: 72 Properties Sold & Inventory Shrinking

As predicted, Kona’s real estate sales remained steady in April. In general, about half of the real estate contracts in escrow are expected to close each month. With 130 contracts in escrow at the end of March, it was estimated that around 60 to 70 properties would be sold in April. However, a total of 72 properties were sold during April, which is reason to anticipate a similarly strong performance in May. At the end of April, there were 143 pending contracts, indicating a promising outlook for May’s sales.

Inventory is shrinking! which means less to choose from for buyers, but gives sellers negotiation strength if they have something in demand. Despite this advantage, sales are closing at less than asking price about 80% of the time, even for minor price discrepancies. Stay informed and strategize accordingly.

If you are interested in purchasing a home with a loan here is one scenario. Lets say that the home is priced at a million, and you want to put down 20%, That will leave you with a monthly payment of $5,000 at 6.5% interest. You still need o cover taxes, utilities, insurance and maintenance costs.  The income requirement that a lender may want to see is roughly 120k a year. Those income requirements in Kona are tough. The average salary here in Kailua Kona is $40,188 a year, so that means that there are less buyers in the market with conventional loans. Cash sales are continuing to happen in this market in the 50% range.