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West Hawaii Real Estate Update: March, 2015

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West Hawaii Real Estate Update

March, 2015: Volume 12, Issue 3

Kona sales had another good month, the highest for February in ten years in overall house, condo and land sales at 85. This followed a January with the same recent high making for a strong winter market so far in 2015.

House sales weakened to 28 when they should have been around 40 and the thinking is still that the rising prices have dissuaded buyers from moving forward. Land sales appear to tell that story with 22 closings in February, meaning buyers are reverting to building when they can’t find what they want already built and at the price they want to pay.

Condo sales were strong at 35 which is a common for this time of year since they are a favorite of our snowbirds.

hula-girlThe market is going to go through two big changes this summer with predicted rising interest rates and a completely new top to bottom lending process mandated by the Feds… should be interesting!

Notes From Gretchen

Every day I speak to or email someone who is moving to Kona. I can’t believe what a huge uptick of new arrivals we have these days! Some are coming just to live but most are accepting job offers, typically in construction or the medical field.

The face of Kona is changing and like all change it is subtle at first but eventually it has a big impact. When the recession hit in 2009 a lot of the newer people left, leaving an abundance of rentals and homes for sale.

So although this influx appears to be good for Kona, bringing people with new skills and fresh ideas, in the end it may be short-lived.

Economic News

  • Kualalani at Mauna Lani issued one of the first owner occupant notices I have seen in years. The condo market up there seems to be recovering sufficiently that the developers need new inventory to offer, great news!
  • Hotel revenue grew to $5.4 billion for 2014 for the state as a whole, with a daily rate increase of roughly 5.5% for the year.
  • Outer island occupancy rates were 72% for Maui, 70% for Kauai and 61.5% for the Big Island… all great news!
  • Delta has announced they will start daily service from Seattle to Kona on December 19th, just in time for the holidays and our busy winter season, we need more seats to make pricing more competitive… yay!
  • The Hawaii Tourism Authority reported a 0.7% increase in visitor arrivals in January of 2015 but hotel occupancy dropped some indicating that the guests were staying in other non-hotel options.

Kona All Cash Sales 1991 through 2015

Land sales play a big part in this very strong cash market, out of 37 sales in 2015, 30 of them were all cash, or 81%.

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State Economic Report

University of Hawaii researchers say 2015 will look a lot like 2014, and that was a good year for us. Marginal gains in tourism are expected, steady improvement in the labor market and moderate income growth are predicted.

Tourism in 2014 had a record year posting a 1% gain in visitor days in the islands. New flights to Honolulu and Oahu will help this number. Because of the 50% increase in hotel room rates from the depth of the recession on Oahu, they believe most of the tourism growth will come from the neighboring islands where room rates are substantially less. Great news for vacation rentals!

Market Snapshot

Closed in
February 2015

For Sale in
March, 2015

Kailua-Kona:
28 Homes
35 Condos
22 Land

Sold

Kohala:
24 Homes
17 Condos
2 Land

Kailua-Kona:
230 Homes
176 Condos
169 Land

For Sale

Kohala:
128 Homes
206 Condos
76 Land

Gretchen Osgood

Hawaiian Isle Real Estate, LLC
Realtor(B)
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

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