West Hawaii Real Estate Thriving as Buying Spree Continues

As a buyer’s agent for West Hawaii, I’m keeping plenty busy despite the gloomy national news. Late summer and fall is usually a slow time here for buyers, but I’m writing as many offers for clients as I was at the traditional peak time back in January and February.

Here are some sales stats for North Kona, which includes the communities of Kailua-Kona, Keauhou, Holualoa, Hualalai and Kukio:

• Home sales year to date have increased 51% over last year.
• Median home prices fell 5% during this period.
• Condo sales year to date have increased 113% over the last year.
• Condo prices fell 20% during this period.

Similarly here are the sales stats for South Kohala which includes most of the resorts as well as Waikoloa Village.

• Homes sales year to date have increased 8% over last year.
• Median home prices fell 10% during this period.
• Condo sales year to date have increased 98% over the last year.
• Condo prices fell 15%  during the same period.

Data is from the MLS.

In addition to this rise in sales we are also seeing price decreases slowing if not reversing. As a buyers agent, it is getting more difficult to negotiate large price discounts off the listing price for my buyers. Well-priced properties in good condition in preferred locations are selling quickly, often with multiple offers.

So why such as different picture from the dismal numbers being reported on the Mainland in the national media? The national figures reflect the end of the housing stimulus. From my experience as a buyer’s agent, the West Hawaii buyer is different. Only 10% of my buyers who made a purchase so far this year took advantage of the tax credit. The rest were second home buyers. The majority are buying a home that they hope to retire to in a few years. They want to take advantage of the low prices and historically low interest rates. In a few years they will retire and sell their primary home, hopefully in a better market, pay off their mortgage on their Kona home, and make their move to the Big Island.

A word of caution. Due to their numbers, foreclosures should continue to set prices for the foreseeable future. If the banks continue to hold back and release them slowly, as has been the case lately, prices should stabilize. If banks decide to dump a bunch of homes and condos, we could see prices drop further. My best advice to clients is to look at their Hawaiian purchase not as an investment but as a lifestyle choice. If this is where you want to spend your retirement, then now is a great time to buy.