At first glance, Kailua-Kona’s Q1 2025 numbers appear impressive—particularly in the condo market. Double-digit growth in closed sales and pricing might suggest a market heating up. But as any seasoned market watcher knows, superficial statistics can be misleading without proper context.
This is a complex market—polarized and layered. Sellers and buyers alike need more than headlines; they need insight and guidance to make smart, confident decisions.
Q1 2025 Snapshot (compared to Q1 2024): Kona Real Estate Market
A Tale of Two Markets: Condos vs. Homes
While condo sales volume and pricing show strong year-over-year growth, surface numbers don’t tell the full story.
The spike in median price often reflects concentrated activity in certain price bands, not broad-based appreciation. And with inventory up 130% and pending sales down 37.5%, the reality is that many buyers remain cautious—likely due to affordability constraints and the continuing impact of the condo insurance crisis.
In contrast, Kona’s single-family home market remains relatively balanced. Homes are moving faster, median prices are stable, and even with more listings on the market, strong buyer demand is keeping things competitive.
What Price Reductions Reveal
One of the clearest indicators of market tension is how frequently listings undergo price reductions before selling. This data provides a valuable lens into where seller expectations may be misaligned with actual demand.
Nearly half of all active condo listings in Kailua-Kona (49.1%) have undergone price reductions, signaling increasing pressure on sellers in today’s market. The average price cut sits at 7.6%, with a median of 6.5%, and these reductions are more common in listings that have been on the market longer. Notably, the lower price tiers are experiencing the most pricing volatility—57% of listings under $400K and 54% between $400K–$599K have seen price drops, compared to only 31% in the $1M+ segment. This trend underscores the importance of strategic pricing, especially for sellers targeting budget-sensitive buyers in a shifting market.
Condo Market – % of Sold Listings with Price Reduction Before Sale:
-
2022 (1st Half): 12.8%
-
2022 (2nd Half): 23.8%
-
2023: 28.2%
-
2024: 40.1%
-
2025 (YTD): 52.9%
Single-Family Homes – % of Sold Listings with Price Reduction Before Sale:
-
2022 (1st Half): 21.6%
-
2022 (2nd Half): 34.0%
-
2023: 31.7%
-
2024: 34.1%
-
2025 (YTD): 28.0%
This tells us that while the condo market continues to soften, single-family homes may be stabilizing. Notably, 2025 has seen fewer price reductions for homes so far—potentially signaling more realistic seller pricing or a return of well-qualified buyers. It is natural to see about 20% price reductions in a hot market. There are always over priced listings until the market catches up. The question is: Will the Market Catches Up?
Market Context: Looking Into Q2
Seasonal rhythms are unfolding as expected. Every year, snowbird sellers bring inventory to market in January and February, peaking supply just as visitor traffic is high.
-
Condo inventory historically peaks in March/April, then tightens through July.
-
Single-family home inventory follows a longer cycle, peaking in winter and tapering through October.
If past patterns hold, we may see reduced inventory and more competition as we move into summer—especially if buyers return in stronger numbers. With new tariffs and economic instability, the market may not follow the normal pattern. We shall see.
Advice for Buyers & Sellers
-
Sellers: Pricing is everything. In a market where inventory is growing but buyers are cautious, the right price from day one will make or break your sale. Condo market is much tougher than Single Family home.
-
Buyers: With more options on the table now than we usually see mid-year, this may be your window to find the right fit before supply contracts. Again there is big difference between condo and SFH market. Price is only one of the important factors. Comprehensive understanding of the market and area is crucial.
Final Thought
The market is shifting—not crashing. But success in 2025 will depend on precision, timing, and understanding the story behind the stats. If you’re navigating today’s Big Island market, make sure you have guidance grounded in data, experience, and nuance.
We’re here to provide just that.
(Kai)