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West Hawaii Real Estate Update
June, 2015: Volume 12, Issue 6
Kona real estate sales for May 2015 were solid with 49 houses, 30 condos and 14 lots closed. I’m not sure how much longer we can sustain the double digit lot sales, though, since there are only 35 currently listed under $300,000 and in town. That is the break-even point between building new or buying up to around $800,000.
Prices have been on the rise and buyers are balking at the increases and the lack of appropriately priced inventory. Sellers may have gotten a little ahead of themselves at times in the excitement of seeing values increase after years of decline, which is understandable but needs to be addressed.
One way the market takes care of this is that we will see a lull in sales as we wait for the ‘new crop’ of buyers to begin looking, and they won’t be as stunned by the prices. That, and where they come from is also going up, and that helps us look like the bargain that we are in Hawaii.
Notes From Gretchen
We went to the monthly Keauhou concert last night to see John Keawe, the renowned slack key guitarist. The Food Bank puts it on once a month and you just bring two cans of food for them and a beach chair for you and enjoy great free music.
After, we went to the Sheraton at Keauhou Bay to enjoy their Ray’s on the Bay bar, and what a surprise we got! We counted 25 boats with snorkelers and divers waiting for the rays to show up. We estimated there were at least 200 people in the water… wow! Makes me think Kona is booming again… great for everyone!
Well as the old saying goes… I have bad news and good news… Ok… bad news first:
The county Water Board voted in Hilo on June 21st to unanimously approve the five-year water rate plan that hikes rates 3% on July 1, followed by a 4% hike in 2016, and then a 5% hike annually for 2017, 2018, 2019. Cumulatively a whopping 24% increase over 5 years.
You may think because you own a condo you won’t be affected, but you will. Almost all association dues will need to be increased to cover this, or landscaping watering reduced, either way there are big changes a foot … darn!
The University of Hawaii released an economic report showing that tourism will continue to drive the economy for the next few years… yeah! It also says that tourism should see some healthy gains in the neighboring islands, but that rising occupancy and rates have begun to flatten out the Oahu market already. That is a word of caution for us… the well can run dry when rates get high and town gets crowded… save up for the lean years to come.
Kona Residential / Land Sales Through May 2015
2015’s first quarter topped 2014’s by a dozen sales and we are on track to have another solid year, but the rapid price increases are deterring some buyers.
Featured Vacation Rental
Ocean front beauty!
This remodeled top floor Sea Village condo has expansive ocean views
Want to discuss the benefits of turning your Kona home or condo into a vacation rental?
Lenders require seven years of credit repair after a foreclosure and four years after a short sale before getting a new mortgage. That means that 1.3 million people who have had one of these are now eligible to take out a mortgage again. So far about half of them have.
With rents rising rapidly in Kona and with no end in sight, the argument for stabilizing your housing expense each month makes a lot of sense. In some cases it is already cheaper to buy than rent.
Lending rates are holding under 4% which makes a $500,000 house roughly $2,400 a month until rates go up later this year.
Out on the Town
My semi-annual trip to Atlanta was loads of fun with family. The photo is my 80 year-old mom and dad, and my sister and two of her boys are in the background. We hiked down to a waterfall area after watching the boys kayak down the river.
My folks didn’t expect as big of a hike as it turned out to be, but they were troopers and did the whole thing without any assistance, but we sure were all tired at the end. I sure hope I’m going strong like them when I’m 80… way to go mom and dad!
Hawaiian Isle Real Estate, LLC
Principal Broker/ Owner
Direct (808) 329-5667
#1 in Kona Transactions – 2013
#16 in State of Hawaii – 2013
Creative Advertising Award – 2012
Broker of the Year – 2010