The Big Island of Hawaii, known locally simply as the island of Hawaii, is the second most populous island in the archipelago. More importantly for the Hawaii real estate market, the Big Island real estate market is literally bigger in terms of size than all of the other islands combined. Big Island properties are often sold by the tens or even hundreds of acres, whereas properties on other islands are sold on fractions of a single acre for much higher prices. This difference complicates the island's reaction to the nationwide recession and the bursting of the state real estate bubble, unfortunately mostly in a negative direction. The Big Island has been in serious trouble for months, and the Big Island real estate market will continue to have issues until the market bottoms out.
The stunningly high rate of foreclosures on the Big Island are possibly the biggest red flag for potential buyers and investors looking for property in Hawaii. The California based company RealtyTrac recently released monthly figures for July that highlighted the plight of the Big Island real estate market. The numbers, which were published on July 16, 2009 in Pacific Business News, found that “The Big Island had one filing per 441 housing units, up 5 percent over May and up 935 percent over June 2008.” The Big Island was the only of the major Hawaiian islands to experience yet another increase in foreclosures in June. A July 16th article in the Honolulu Star Bulletin was even less optimistic, with a headline asking whether the “Worst in foreclosures yet to come?”
Property prices on Big Island real estate have also been falling precipitously, which has sparked what is arguably an unhealthy interest from mainland investors. One possible bright spot was brought up in a recent meeting of the Hawaii Developers' Council, which theorized that Hawaii real estate may be reaching a bottom, after which some form of recovery is expected. There is, however, no guarantee that the expected recovery in downtown and suburban Honolulu will quickly spread to the wide open spaces of the Big Island.