Hawaii Island’s Real Estate Market Report, Q3 2021: What Low Inventory Means for the Seller’s Market
Just released by Hawai’i Life, our Quarter 3 2021 Hawai’i Island real estate market report indicates that the volume of sales has shown a 9.1% increase when comparing Q3 2021 to Q3 2020. Over the same period, supply has decreased dramatically and this all-time low has fanned the proverbial flame, with the seller’s market only getting hotter.
Sellers Market Strengthened by Low Inventory
When comparing Q3 2020 to Q3 2021, what stands out is the sharp decline in the number of homes available for sale on the Big Island. Each of the last 12 months has seen fewer and fewer active listings, with inventory taking a 38.2% plunge, from 644 one year ago to 398 active residential listings in Q3 of this year. Consequently, the current months of inventory available has seen a decrease of 55.4%, hitting 1.4 months as compared to 3.1 months in Q3 2020.
And while properties were on the market for an average of 95 days at this time in 2020, sellers didn’t have to wait around that long this quarter. The average DOM in Q3 of 2021 is down by nearly 50% to 48 days, a trend that further points toward the strength of the seller’s market.
Pending Properties See Decline, but Sales Prices Surge
There were 778 property sales on Hawai‘i Island in Q3 2021, an increase of 9.1% over 713 sales in Q3 2020. And as inventory continues its downward trend, sale prices are also surging.
For the third quarter of 2021, the average sales price of single-family homes on Hawai‘i Island hit $799K. At a 29.7% increase over the average sales price of $616K during Q3 2020, it’s hard to deny that lower inventory created unprecedented opportunities for sellers this quarter.
And the average sold price per square footage was up 34.2%, rising steadily from $354 in Q3 of 2020 to over $475 at the end of September 2021. Considering that the combination of high or low end properties in the market can impact the median sold price and average sold price, this average sold price is a more normalized indicator of the direction of property values.
Interestingly, there are only 812 homes under contract on Hawai’i Island, which is a decrease of 3.6% over the same period last year, in which there were 842 pending properties.
What This Means for Buyers and Sellers
With buyers competing for this limited supply of available homes, bidding wars are driving prices up. Without a crystal ball, it’s impossible to say for sure where the market will be a year from now, but we’re certain of this much: 2021 is the year of the Seller’s Market.
For the buyer, purchasing a home in this lucrative seller’s market is more challenging. Our Hawai’i Life experts, however, have the tools, expertise, and global connections needed to make any offer stand out in a crowded market.
Access the rest of the Q3 Hawai’i Market Reports Now
The Real Estate Market Report covers quarter three of 2021, providing a wealth of knowledge from Hawai’i’s most experienced real estate brokers.