by Dan Polimino
As we turn the page on another year, the question I’m asked most often is simple: what’s next for real estate here on the Big Island of Hawaiʻi?
Rather than guessing, I prefer to combine nearly two decades of experience, daily market activity, and a clear-eyed view of economic signals. So for this month’s cover story, I’m polishing the crystal ball and offering my 2026 real estate forecast—not as speculation, but as an informed perspective from boots on the ground.
INTEREST RATES: THE CATALYST
One of the most significant drivers of the 2026 real estate market will be a leadership change at the Federal Reserve. With the current Fed Chair scheduled to step down in May of 2026, the Trump administration is expected to appoint a successor aligned with its economic priorities—most notably, a strong bias toward aggressively lowering interest rates.
Several Federal Reserve governors have already indicated a willingness to lower rates more significantly. Once new leadership is in place, I would not be surprised to see swift action, potentially beginning in the first half of the year. A 50-basis-point reduction is well within reason and would be exactly what the mortgage market has been waiting for.
Lower rates don’t just improve affordability—they restore confidence. And confidence is what ultimately brings buyers off the sidelines.
SALES VOLUME: THREE YEARS DOWN, ONE DIRECTION TO GO
The national real estate market has been in a quiet recession for three consecutive years. Home sales have hovered around 4.1 million annually—a 35-year low. When markets stagnate this long, history shows there is only one direction to go.
The National Association of Realtors’ chief economist, Lawrence Yun, has predicted a 15 to 25 percent increase in home sales nationwide, including here in Hawaiʻi. I agree. A rebound of 500,000 to 800,000 additional home sales in 2026 is entirely realistic.
PRICING WILL DECIDE WINNERS AND LOSERS
If you plan to sell in 2026, pricing will be the single most important decision you make. A competitive price will no longer be enough. You will need a compelling price—one so attractive that buyers feel compelled to act immediately.
Here is how to read the market clearly:
- If you are receiving no showings and no offers, you are likely as much as 10 percent above the final sale price. The correction should be decisive: two strategic price reductions, spaced 45 days apart.
- If you are getting showings but no offers, you are likely 5 to 7 percent off. Again, two deliberate adjustments over 90 days—no more.
- If you are receiving showings and low offers, you are within 3 to 5 percent of the final sale price. And in many cases, those early offers deserve closer consideration.
- Remember, offers rarely improve with time. More often than not, your first or second offer is your best.
- I do not recommend pricing a home dramatically below market value to “create a frenzy.” Some real estate agents are suggesting that you list your home 50% below market value to create a bidding war. That strategy often leaves sellers exposed and can result in substantial money left on the table.
BIG ISLAND SUPPLY AND DEMAND REALITY
Inventory on the Big Island is rising—and that creates opportunity for buyers today. More choices mean more negotiating power. However, this window will not last.
Once inventory is absorbed, prices will move again. This island has a permanent supply constraint. There are no national builders here, limited developable land, and consistent global demand. Long term, values trend upward—it is simply economics.
OUR ADVICE FOR 2026
For buyers, the best strategy is to act early. The first quarter of 2026 offers selection and leverage. Waiting until later in the year risks bidding wars and emotional pricing.
For sellers, preparation and pricing discipline will determine success.
These are my crystal-ball predictions for 2026. No guarantees—just seasoned insight informed by daily market participation and nearly twenty years of experience.
If you’re considering buying, selling, or investing on the Big Island this year, we would be honored to be of service.
