Hawaii Real Estate Market Outlook 2025
In this Hawaiʻi real estate market outlook for 2025, we break down Dr. Lawrence Yun’s latest insights…
As the year winds down, Hawaiʻi’s real estate landscape continues to evolve. During a recent economic forum here in Hawaiʻi, National Association of REALTORS® Chief Economist Dr. Lawrence Yun shared his perspective on where the market is heading — and what buyers, sellers, and property owners should expect moving into the new year. Several members of the LUVA Real Estate team were in attendance, and we’re excited to share the major takeaways that matter for our clients across the islands.
Inventory Is Slowly Expanding, But Still Tight
Although inventory statewide has ticked up from the record lows of the last few years, Dr. Yun noted that supply remains far short of long-term demand. This is particularly true on the Big Island, where desirable neighborhoods continue to see tight supply and strong competition.
Key factors influencing inventory:
Limited new construction
High building costs
Insurance and permitting challenges for certain condo and coastal properties
As a result, well-priced homes across West Hawaiʻi — especially with ocean views or updated finishes — continue to attract immediate attention.
Condo Market Faces Unique Pressures
Dr. Yun highlighted a nationwide trend that Hawaiʻi knows all too well: insurance costs and maintenance requirements have pushed some condo associations to reassess budgets, reserves, and monthly fees.
On Oʻahu and Maui, this has already led to higher maintenance fees in several buildings. On the Big Island, we’re seeing a more cautious approach from buyers evaluating long-term carrying costs before committing.
However, the condo sector still offers:
Excellent value for second-home buyers
Strong demand in resort zones
Reliable rental opportunities in areas where short-term rentals remain permitted
For sellers, transparent documentation and proactive communication about building health are more important than ever.
Hawaiʻi’s Long-Term Fundamentals Remain Strong
Despite economic fluctuations, Dr. Yun emphasized that Hawaiʻi remains one of the most desirable real estate markets in the country. The islands consistently attract:
Relocation buyers seeking lifestyle change
Investors pursuing stable, long-term appreciation
Part-time residents looking for a retreat in a world-class destination
Limited land availability, a strong rental market in resort areas, and ongoing demand from both U.S. and international buyers help support long-term property values.
Projections for 2026
- Interest Rates – Although rates may go down to 6% in 2026, Dr. Yun does not expect rates to fall below 6% in 2026, and forecasts that rates will never be in the 4’s again.
- Prices – While 2025 had a 1% price growth, Dr. Yun projects a 4% price growth in 2026.
- Sales volume – We had a 3% increase in sales numbers in 2025. Dr. Yun expects pent-up demand to push sales 14% higher in 2026.
What This Means for Buyers and Sellers for the rest of 2025
Whether you’re evaluating your next investment or preparing to make a move, here’s how the market outlook may affect your plans:
For Buyers
Watch for small rate improvements to expand affordability.
Be prepared: desirable homes still move quickly.
Look carefully at HOA and condo docs when evaluating fees.
For Sellers
Less rate pressure = more qualified buyers.
Well-prepared listings continue to command premium prices.
Accurate pricing and strong presentation matter — but the demand is there and anticipated to be even greater in 2026.
For Investors & Property Owners
Hawaiʻi’s appeal remains resilient.
Resort-zone properties will continue performing well.
Keep an eye on policy updates regarding vacation rentals and housing regulations.
LUVA Real Estate: Your Local Connection
Our team attends these economic forums each year because staying ahead of market trends helps us serve our clients at the highest level. Dr. Yun’s insights reinforce what we’re seeing firsthand: Hawaiʻi’s real estate market is stable, evolving, and full of opportunities for well-informed buyers and sellers.
If you’d like to discuss how these trends impact your real estate goals — from buying or selling to vacation rental and long-term property management — our team is here to help.
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