August 13, 2026
Ask two people shopping in Kailua-Kona this summer how the market feels and you may get two different answers depending on what they're touring. A buyer looking at single-family homes in Kaloko Mauka or along the coast will describe a market that feels tight, disciplined, almost normal. A buyer looking at condos near Ali'i Drive or in the resort corridor will describe something closer to a clearance sale.
Both are describing the same town in the same season. The gap between what they're seeing is not a matter of taste. It comes down to two things a single-family home buyer rarely has to think about and a condo buyer cannot avoid: a master insurance policy and a county zoning bill still working its way through hearings.
Mid-year figures for the first half of 2026 show the two property types moving in opposite directions. Single-family homes in Kailua-Kona traded at a year-to-date median of $1.225 million, down 6.1 percent from the same period last year, but price per square foot slipped only about 1 percent. Inventory sits at roughly 5.4 months of supply, which is close to what appraisers consider a balanced market.
Condos tell a different story. The year-to-date median has fallen to $570,000, down 12.3 percent year over year, which rolls pricing back to levels last seen in 2023 after the segment peaked near $694,000 in April 2025. Months of supply has climbed to 7.7, which puts condos squarely in buyer's market territory.
| Single-family homes | Condos | |
|---|---|---|
| YTD 2026 median price | $1.225M | $570,000 |
| Change vs. prior year | down 6.1% | down 12.3% |
| Months of supply | 5.4 (balanced) | 7.7 (buyer's market) |
| Price per square foot | down ~1% | softening further |
A 6-point spread in year-over-year price movement between two property types in the same town is worth pausing on. Something structural is doing that work, not just buyer mood.
The easy explanation is that condo buyers cooled off while house buyers didn't. That doesn't hold up against the rest of the data. Pending sales for single-family homes are still running 18 percent higher than a year ago, and year-to-date closed sales are essentially flat compared to 2025. Demand for houses hasn't surged. It has simply stayed steadier than demand for condos, which points to something weighing specifically on the condo side of the ledger rather than a general shift in what people want out of Kona.
Two things are doing that weighing, and both are tied to decisions made well outside any single listing.
Condo associations across Hawai'i have spent the past two years absorbing a reinsurance shock that has little to do with local buyer demand and everything to do with global catastrophe pricing. Reinsurance rates began climbing in late 2023 as disaster losses mounted nationally, and the Lahaina wildfire pushed the whole state further into insurers' high-risk category. Because Hawai'i's largest reinsurers operate out of places like Bermuda and the Cayman Islands, KHON2 reports that the state has no authority to cap what they charge, and those costs get passed straight down to condo associations. Hawaii Business Magazine reported one-year premium increases of 300 to 600 percent across Hawai'i condo master policies, with a handful of buildings seeing bills 10 to 14 times what they paid the year before. One building profiled in that reporting saw its premium climb from roughly $30,000 to $375,000 over a few renewal cycles, a pattern insurance professionals describe as widespread rather than isolated.
A single-family homeowner in Kaloko or Holualoa carries a standard policy and shops it individually. A condo owner in a Kona building is bound to whatever the association's master policy costs, and that cost now shows up in monthly maintenance fees, in special assessments, or in a board's decision to carry less than full replacement coverage just to keep the bill manageable. The Department of Commerce and Consumer Affairs' condo insurance guidance notes that Fannie Mae and Freddie Mac require full replacement coverage before they'll purchase a building's mortgages on the secondary market. A building carrying less than 100 percent coverage can find its units effectively limited to cash buyers, which thins the buyer pool and puts direct downward pressure on price. That is not a demand story. It is a financing story, and it explains part of why condo pricing has room to fall that a detached house simply doesn't have.
The other pressure is closer to home and still unresolved. Hawai'i County's Bill 147 would expand where unhosted short-term vacation rentals are allowed to operate, adding multi-family residential and neighborhood commercial districts to the list of eligible zones. That matters in Kona specifically because, as one member of the Kona Community Development Plan committee put it in testimony reported by West Hawaii Today, Kailua-Kona already holds more than a quarter of all vacation rentals on the island. The committee voted unanimously in May 2026 to submit testimony opposing the expansion, arguing it would drive condo and multi-family prices higher while further shrinking the town's supply of long-term resident housing. Committee member Shane Palacat-Nelsen, who grew up in Kealakekua Bay, spoke to the tension directly, describing generations of family history in the area being reshaped by unchecked rental growth.
Separately, Hawai'i County's Bill 47 addresses short-term rental registration. The rule grew out of the county's push last year to bring owner-occupied, or hosted, rentals under formal registration for the first time, according to Civil Beat, which reported penalties as high as $10,000 for owners who skip the process. Once registrations are on file, the county has said it plans to cross-reference the list against active Airbnb and VRBO listings to find operators who never registered at all.
The zoning question remains unresolved. That is precisely the point. A condo whose value depends partly on its ability to operate as a vacation rental is currently priced under a cloud of unresolved zoning policy, county registration requirements, and a state tourism accommodations tax that Checkmate Rentals reports rose to 11 percent on January 1, 2026. A single-family home in a residential subdivision doesn't carry that same rental-dependent pricing exposure, because it was never priced on the assumption of nightly rental income in the first place.
The takeaway isn't that condos are a bad buy or houses are automatically the safer choice. It's that the two property types in Kona are currently being priced by different mechanisms, and treating them as points on the same curve will lead you to the wrong conclusion about value. If you're weighing a condo against a house in Kona this year, a few questions matter more than the listing price:
A condo priced 12 percent below where it stood a year ago might represent genuine value if the building carries full insurance coverage, healthy reserves, and a rental permit that isn't in question. It might represent a deferred cost if any of those pieces are missing. The only way to tell the difference is to ask before you write an offer, not after.
Does this mean condo prices in Kona will keep falling? The data available through mid-2026 shows a market correction tied to specific cost and policy pressures rather than an open-ended decline. Insurance reform efforts, including an expanded role for the Hawai'i Hurricane Relief Fund in covering condominiums, are already underway at the state level, and as of the Kona committee's testimony this spring, Bill 147 was still under review rather than finalized.
Are single-family homes immune to these pressures? Not entirely. Lava zone considerations affect homeowners insurance across the island regardless of property type, and any homeowner relying on rental income faces the same zoning questions. The difference is one of degree. Detached homes are far less likely to carry a shared master policy or depend on a permitted rental designation to hold their value.
Should I wait for the zoning bill to resolve before buying a condo? That depends on your goals and timeline. What matters most is knowing which building, which policy, and which permit status you are buying into, rather than assuming every Kona condo is affected equally.
Kona's market rewards buyers and sellers who understand what's actually moving the numbers, not just the numbers themselves. If you'd like a closer look at a specific building's insurance standing or a home's zoning status before you make a decision, Marc Shackman and the ʻĀina Luxury Realty team are glad to walk through it with you.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
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