Big Island building grades explained: how quality classes affect resale
Every improved property on Hawaii Island gets a building grade from the county assessor, based on the Marshall & Swift quality classification system. The grades run from 1 (Low) to 5 (Very Good), and they have a measurable impact on sale price.
The five grades
Grade 1 (Low): Basic shelter. Minimal finishes, possibly unpermitted or partially complete. Think plywood interior walls, no trim, basic electrical. Common in Puna owner-built homes.
Grade 2 (Below Average): Functional but plain. Builder-grade everything. Vinyl flooring, laminate counters, basic fixtures. The standard spec for older plantation-era homes and budget new construction.
Grade 3 (Average): This is where most tract homes land. Tile or hardwood in main areas, granite or solid-surface counters, standard cabinetry. The median grade island-wide.
Grade 4 (Good): Upgraded finishes throughout. Hardwood floors, custom cabinetry, higher-end appliances, better windows. Usually found in Kona, Waimea, and resort areas.
Grade 5 (Very Good): Custom homes with premium everything. Rare, mostly in South Kohala resort communities and high-end Kona builds.
Price impact by grade
Our valuation model applies a Marshall & Swift multiplier that reflects real sale price differences. Moving up one grade adds roughly 15-25% to value, all else equal. Specifically:
- Grade 2 to 3: +18% average premium
- Grade 3 to 4: +22% average premium
- Grade 4 to 5: +25% average premium
These aren't theoretical. They come from regression on 25,000+ qualified sales. The grade effect is strongest in mid-price neighborhoods where there's enough variation to measure it.
What this means for buyers
When comparing two homes at similar prices, check the grade. A grade 2 home priced like a grade 3 is overpriced. A grade 4 home priced like a grade 3 is a potential deal. Our Kona and Hilo comp reports include grade-based adjustments for every comp so you can see exactly how grade differences affect the comparison.