West Hawaii Real Estate Update: April 2024

VOLUME 21, ISSUE 4

March numbers were almost identical to last year in units sold for all three categories for Kona. Cash sales for March are down to 45% for Kona as compared to 55% last year. It would seem that buyers have come to terms with the higher interest rates, at least in March.

Kona closed 76 houses, condos and land for the month, up 15 from last month and mostly in condo sales of 32.

Pending sales are holding for now as well, so April’s sales should also be strong.

Prices are so far out of reach that now if something is listed under a million, it is almost always a condo. House listings under that range were only 13 at the close of March… pretty skinny choices! In condos you would have had 70.

That is where the insurance issue runs smack dab into the pricing. The fees have gone up dramatically the last few years in most complexes, I mean hundreds a month in increases. This is now limiting how buyers think about what is in their price range… not just the sticker price but the per-month expense which continues to grow. And property taxes went up almost $100 a month on rental condos last year too! It affects how the unit cash flows, with many many rentals now not able to cover all the expenses, so some owners will decide to sell.

NORTH KONA – ALL PRICE POINTS – RESIDENTIAL SALES

west hawaii real estate market snapshot

Testimonial

We found ourselves in a situation where our condo was in complete disarray following a renovation, and we were in Canada unable to return to the island. We decided to rent and/or sell our place but how we could make that happen from 3,500 miles away was more than we could imagine. Gretchen made it all easy... you go above and beyond in every way!

Greg Hahn & Nancy Chappell

economic news

  • There is a puzzling trend in vacation rental occupancy… the Big Island is down 19% to 62% compared to 2019. Hotels in the state are running 80% occupancy. Maybe shorter stays by tourists so vacation rentals aren’t as attractive, or fewer families traveling? Not sure where the guests will go when the hotels are 80% full and they start limiting vacation rentals even further.
  • #1 in USA Today’s Best Cultural Festivals was Hilo’s Merrie Monarch this year!
  • University of Hawaii Economic Research Organization (UHERO) estimates that 58% of the $670,000 cost of a new condo goes towards regulatory costs.  The cost of labor and materials is only $387,000 for a 2 bedroom/2 bath unit. Hawaii has the most restrictive housing laws in the nation, the story reported.
  • West Hawaii Today reported that there is a bill (SB 3202) that would increase lot capacity to three dwellings throughout the counties within urban areas on parcels as small as 2,000 sf. On the Big Island only 2.7% of the land is zoned for housing now and only a fraction of that is zoned for single-family. Our county Planning Director, Zendo Kern, is in favor of this.
  • Bankruptcy filings across the US rose 14% in 2023 as COVID area assistance comes to an end.
  • Electric vehicles might be great but where on an island do you throw away the battery when you are finished? There is a new working group at the state level trying to hold manufacturers responsible for them.

notes from gretchen

Vacation rental rezoning/permitting is still the hot-button issue of the year here. The bill at the state level is still alive that would allow counties to ban all such rentals at their discretion.  However, when it comes to limiting hosted vacation rentals on the Big Island, the town is turning out in force. Another recent meeting had almost all of the attendees testifying against the changes… for hours and hours.

What came to light is that an economic impact study has not been done to see how this would affect the county… I’m betting they would collect less taxes at minimum. But probably would get less tourists overall as well.  The council seems to be willing to pass it regardless of what the citizens want.

visitor arrivals

Visitor arrivals to the state for February 2024 were up 2.5% from last year, to 772,480, or so said the headline… But WAIT, this is a leap year so that number doesn’t work. Better is the average daily count, which was 246,700, up only 1%.

All state arrivals for the first two months of the year cumulatively were 1.5 million, a drop of .06 percent.

Domestic arrivals from the US fell by 3% year-to-date.

Big Island arrivals were up 5%, to 145,200 for February. This is counterintuitive to the dropping vacation rental occupancies… hmm.

 A UHERO report says that US tourists make up 70% of all visitors to Hawaii and that we need a more diverse mix to thrive down the road. Lets hope they figure this out soon!

rentals in kona

Thought for the day

“Keep your face always toward the sunshine, and shadows will fall behind you.”

~ Walt Whitman

out on the town

A few years back, enjoying the sunset view at the Four Seasons Resort Hualalai.

Mahalo!

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to call or email me today!

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