Is Now a Good Time to Buy Real Estate on Hawaiʻi Island?

If you’ve been watching the Hawaiʻi Island real estate market lately, you’ve probably noticed a shift.

Price reductions are increasing. Homes that sat on the market last year are coming back at lower prices. I’m also seeing more short sales, foreclosures, and auction properties, especially on the west side in areas like Kailua Kona and parts of South Kohala. If you read my last blog on the fall market shift here on the island, you will see we have entered into another shift since that was written.

So the real question is this. Is now actually a good time to buy on the Big Island? Let’s break down what is happening and what it means for both buyers and sellers.

We Are in a Stronger Buyer’s Market Than Last Year

In 2024, we started to lean toward a buyer’s market, and since then, inventory, meaning the number of homes and condos on the market, has greatly increased. Days on market have been stretching. Buyers have had more negotiating power.

However, many sellers in 2025 were still pricing based on peak sales from the previous year. I saw this across single family homes and condominiums island wide. Sellers held firm and avoided price reductions even when activity slowed.

This year feels different.

Homes that sat without movement are being relisted more aggressively. Sellers who were hesitant to adjust are now reducing prices. The psychology has shifted from holding firm to becoming competitive.

That shift creates opportunity.

Are Sellers More Willing to Negotiate?

In many cases, yes. When a property has been sitting for 90, 120, or even 180 days, sellers are often more open to conversation. Every situation is unique, but negotiation is part of real estate.

Making an offer does not hurt anyone. It opens dialogue.

For buyers, this means:

• More room to negotiate on price
• Greater flexibility on credits or repairs
• Less competition compared to peak years

For sellers, this means pricing strategically from day one matters more than ever. Overpricing and “testing the market” is costing sellers time, money, and leverage in today’s environment.

Mortgage Rates Are Stabilizing

Mortgage rates are currently hovering around or slightly below six percent at times, which is a notable shift from recent highs.

If you are purchasing a primary residence on the Big Island, you may not need a large down payment. Many loan programs allow lower down payments depending on credit profile, lender approval, and first time homebuyer incentives.

Investment properties are different.

• Typically require at least 20 percent down
• Carry higher interest rates
• Have stricter qualification standards

This is especially important in resort communities where buyers may be considering short term rental use, such as Waikoloa Beach Resort, Mauna Lani Resort, and Mauna Kea Resort.

The key step is speaking with a knowledgeable local lender and a local real estate agent who understands Hawaiʻi Island financing guidelines, especially for buying condominiums and resort properties.

Short Sales, Foreclosures, and Auctions Are Increasing

Another sign of a deeper buyer’s market is the increase in distressed property opportunities.

On the west side of Hawaiʻi Island, I am seeing more:

• Short sales
• Foreclosure listings
• Auction properties

These transactions are not always simple. Short sales can take many months. Foreclosures may have condition concerns. Auctions often require quick timelines and limited contingencies.

However, for well prepared buyers, they can provide access to great price points or neighborhoods that previously felt out of reach.

The key is having proper guidance and understanding the risks before jumping in.

Not Every Home Is a Deal

This is important. Not all homes are in a buyer’s market. Not all properties are below market value. And not every price reduction means you are getting a great deal.

Micro markets matter on Hawaiʻi Island.

Waikoloa Village behaves differently than Mauna Lani Resort. A condominium in Kailua Kona moves differently than a single family home in Waimea. Luxury resort communities follow different trends than entry level neighborhoods.

When evaluating a property, as real estate agents we look at:

• Comparable sales
• Price per square foot
• Days on market
• Active competition
• Absorption rates

That level of analysis protects both buyers and sellers from making emotional decisions based on headlines instead of data.

So, Is Now a Good Time to Buy?

If you are financially prepared, have spoken to a lender, and are thinking long term, this can be a strategic time to buy real estate on Hawaiʻi Island.

Right now buyers have:

• More inventory
• More negotiating leverage
• More price reductions to work with
• Access to distressed property opportunities

For sellers, success in this market requires strong presentation, proper pricing, and professional marketing from the start. Homes that are priced correctly and marketed well are still selling, some even within a few days. Having a local real estate agent who knows the area inside and out will help you prepare properly to win in this market.

The Big Island real estate market continues to evolve month by month. Decisions should be based on current market data, not last year’s pricing or assumptions.

Real estate is local. And on Hawaiʻi Island, understanding the micro market is everything.

If you are considering buying property, I also wrote a helpful article on the pros and cons of purchasing in a buyer’s market. It breaks down the advantages, the potential risks, and how to approach negotiations strategically in today’s Big Island real estate market.

With aloha, Leeana Runningbear