The Kapaa, HI metro area housing market in February 2025 presents a complex landscape characterized by contrasting trends in pricing, sales activity, and inventory levels. The market dynamics reflect both challenges and opportunities for buyers and sellers alike.

The Median Sales Price in Kapaa stands at $968,000, marking a significant decrease of 13.9% year-over-year. This decline suggests a cooling in the market, potentially offering more favorable conditions for buyers. Conversely, the Median List Price has risen by 12.7% to $1,352,500, indicating that sellers are optimistic about the market's potential despite the drop in sales prices.

Price Per Square Foot metrics further illustrate this dichotomy. The median Price Per Square Foot has increased by 12.0% to $796.09, while the Median List Price per square foot has risen by 11.7% to $887.29. These figures suggest that while sellers are setting higher price expectations, the actual sales prices are not keeping pace, possibly due to increased inventory and longer market times.

Sales activity has slowed, with only 36 Homes Sold, representing a 20.0% decrease from the previous year. Pending Sales have also declined by 3.8% to 50 homes. However, New Listings have surged by 28.2%, reaching 50, contributing to a growing inventory that has increased by 27.1% to 286 homes. This rise in inventory has led to a substantial increase in the Months of Supply, now at 7.9 months, a 290.0% increase year-over-year, indicating a shift towards a buyer's market.

The Median Days on Market have extended to 152 days, a 58.0% increase from last year, reflecting the slower pace of sales. The average sale to list ratio has decreased slightly to 96.5%, down by 1.5%, suggesting that buyers are negotiating more aggressively. Additionally, the percentage of Homes Sold above list price has dropped by 6.7% to 11.1%, further indicating a shift in market power towards buyers.

Price Drops have become more common, with 23.8% of listings experiencing reductions, up by 6.9% year-over-year. Meanwhile, the percentage of homes going off the market within two weeks has decreased by 16.7% to 16.0%, highlighting the slower market conditions.

Overall, the Kapaa housing market in early 2025 is marked by a divergence between seller expectations and buyer realities. While sellers are listing homes at higher prices, the actual sales prices and extended market times suggest a more cautious buyer sentiment. The increased inventory and longer Months of Supply further underscore the shift towards a more balanced or even buyer-favored market. Stakeholders in the Kapaa real estate market should closely monitor these trends as they navigate the evolving landscape.