In my searching I found that for under about 500$ will probably not get you a very good new solid wood instrument. That said, you can get several brands of decent instruments for under 500$ for solid wood but be aware you are going to get factory assembly line built instruments that will lack the fit and finish of "hand made" instruments. You will also get a range of quality of tone that runs from not bad at all to yikes. At the very least I would try to get one locally so you have a chance to play before you buy if that is possible. What you save on shipping and hassle will usually make up for the savings of shopping online.
I was headed the same rout as you and after trying a few instruments decided it was worth saving up for longer to get a proper hand made instrument. I did start with a very cheap plastic makala and then the extra 10$ for good strings to get a feel for it before shelling out for a nice one.
Hope that info helps?
It's true that up to a point you get what you pay for - but I think characterizing everything under $500 as spotty is probably a little strong.
I own ~$700 KoAlohas (1 concert, 1 longneck soprano) and ~$300 Mainlands (2 tenors and 1 concert). Are the KoAlohas better - yes, but not by a huge margin. Two of the three Mainlands were set up
better than either of the KoAlohas and the third, which was set up about identical to the KoAlohas, was one I purchased used and am at least the third owner of so I can't really say what action it might have been delivered with or what the original customer might have asked for.
I will probably never bother to purchase a "better" tenor than my Mainland mango unless I trip over a deal that just can't be passed up. If Mainland made a soprano with a concert scale neck, especially in mango, I would never have purchased the KoAloha longneck soprano that I purchased recently because, while the KoAloha is certainly better, it's
not enough better to command twice the price.
Also, for well under $500 you can get a pretty good all-solid Kala or Ohana and have it set up professionally. My experience with high end Kalas is that, once properly set up, they're pretty close to Mainlands in quality and consistency. Don't have personal experience with Ohanas.
So, while holding out for a Hawaiian made or luthier built is never really a mistake, I wouldn't go so far as to discourage someone from getting one of the better specimens of "lesser" instruments unless I know for a fact their pockets are deep enough to make the difference in cost trivial to them.
John