The pandemic-driven future of affordable homes in north Kona

The trend, especially now, shows how home prices are being driven by more than just local wages, said Kenna StormoGipson, policy and data analyst at the Hawaiʻi Budget and Policy Center. With out-of-state buyers making up 41 percent of sales on Hawaiʻi island in 2018, she said a state study shows prices are driven more by what someone somewhere else is willing to pay.

That demand hasn’t disappeared. Gretchen Osgood, principal broker and owner of Hawaiian Isle Real Estate, said Kona is seen as an attractive, remote place away from what ails the continental U.S., and potential buyers are flying in and quarantining before hitting the market. Meanwhile, those who already own property here have no motivation to sell, so new listings aren’t replacing what sells.

And post-pandemic, off-island demand isn’t certain to diminish. Osgood said Amazon Air’s recent expansion of operations to West Hawaiʻi “speaks volumes as to what’s coming to Hawaiʻi.”

“Why would a company the size of Amazon be investing that way in a remote location if they didn’t see the future as being bigger than what it is today?” she said.

An opportunity for the county, StormoGipson said, could be to increase property taxes on second homes, putting the revenue toward affordable housing. Back in June, the Hawaiʻi County Council voted to increase taxes on second homes by $2.50 for every $1,000 in property value over $2 million.