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“We interviewed others and selected Gretchen. To get our house ready, she provided home inspectors, plumbers, electricians, etc. to make sure there wasn’t anything that would slow the sale down… and she staged it! We could not have been more pleased from listing to closing in less than two months! ”J & K Wesolowski (read more)
West Hawaii Real Estate Update
June, 2011: Volume 8, Issue 6
So much good news!
Let’s start with sales… up… way up! Combined, Kona houses, condos, and land, had 81 closings in May… the 2nd highest month of ‘11… yippie!
Condo sales doubled from April and are back on track when compared to how many pending sales there are. Houses are off of their highs but still holding in the mid-30’s which is great. Land sales had their 3rd straight month in double digits so that category finally has some traction.
Inventory, the driver of any supply and demand market, in Kona, is continuing to drop with houses finally falling under 300 for the first time since ‘05, the start of the downturn. Condos have fallen from their high in ‘07 of 422 to today at 225, and are now just a smidge off of their ‘05 count of 215. Land is another story, still carrying an extra 100+ parcels from our ‘05 count.
Pending sales are holding strong in all categories… great for June sales!
There were only 100 houses listed under $500K at the end of May. That’s about a 4-month supply, leading to possible competition for quality properties in the next few months, if demand continues and inventories stay low.
Luxury Real Estate
Luxury sales in both Kona and Kohala seem to have some ‘legs’, running at 3% to 4% or higher of the whole market each month for four months now… very good for us since it is an expression of confidence in the overall economy.
Inventories peaked in Kona in November of ‘10 at 210, today they are down to 187 in the MLS. Sales are up and pendings are holding fairly steady.
In Kohala, a more dramatic decrease in inventory happened, going from a high in December ‘10 of 147 to today at 101… a 32% decrease. Sales are holding steady and pendings are also.
The big event last week was a broker’s caravan out at Hualalai Resort that had us touring a dozen luxury homes that they had open for us. Wow… what a treat!
One thing that kept my attention for a good part of the homes was a lack of stellar ocean views. Most of them had amazing finishes and furnishings but the view was minimal on a lot of them… and one had a $10 million price tag. I would have thought that that much money bought you a drop away view… but I would have been wrong… several times that day.
There were ones that had just gorgeous views and they were priced the same as those without except they typically were smaller homes. So I guess you get to chose… view or house? Me, I’ll chose the view every time!
The biggest news is the foreclosure moratorium passed by the state legislature recently. It runs from May 5th to July 1st and precludes most non-Judicial foreclosures.
The purpose was to protect owner-occupant homeowners who were saying they couldn’t come to terms with the banks to renegotiate their loans before they were foreclosed on. After July 1st any non-judicial foreclosure of an owner-occupied property will be eligible for state sponsored mediation… a very complicated and cumbersome process for the banks.
I think this will force the banks think to twice about choosing non-judicial over judicial. Banks are prone to take the path of least resistance and the unknown outcome and rules of mediation will scare them. Look for a big increase in judicial foreclosures, greatly slowing the process and restricting the properties on the market.
Notes From Gretchen
If my personal practice is any gauge of the market the price point of buyers is moving up. A good sign that our market, with its shrinking inventory, is making some progress into selling the upper tier properties.
Our winter buyers tend to be more focused on condos but our summer and fall buyers lean towards houses.
If you like rain, then Kona would have been the place to be in May and June… we have been deluged most evenings almost daily… which is unusual for us.
July is shaping up to be a busy month with multiple buyers and sellers already making appointments, so if you want to meet while you are here… please call ahead. Aloha!
The Kona market has already begun to shift with the foreclosure moratorium… available properties are down 50% from the first of the year highs, the first sign of possibly a new trend. The pending and closed sales are still holding but that will change in the next month or so unless inventories pick-up.
For short sales in Kona the trend is reversed… increased inventory and double the sales in May over April. The pendings are off some though, so we will have to see how this develops.
In Kohala the distressed market is more normal so we will have to wait and see if these changes affect it.
For more check out the graphs on the website.
Gretchen L. Lambeth
Broker of the Year – 2000
75-170 Hualalai Road, D-115
Kailua-Kona, Hawaii 96740