West Hawaii Real Estate Update: December 2023
VOLUME 20, ISSUE 12
November turned out to be a surprise! Higher available inventory up 10% for houses and sales were down 7%, for a very low total of 23 in all price points, the lowest in recent memory.
Condo inventory is up 4 units and down 8 in sales to a new sales low of 17 overall.
And what was our very consistent land sales market only gave us 3 closings in November instead of what had regularly become at least 5.
Sales in all three categories only totaled 43, again not a number seen in recent memory.
You are probably thinking the same thing I was… must be interest rates so I checked on cash closings… year-to-date for Kona in residential is 44% and in Kohala, it is 41%… so not too far off “normal” for us… most likely the “missing” sales are for ones that would have used a loan. But as you may have heard, interest rates are down now in the mid 6% range which should move a few buyers back into the market… fingers crossed!
Pending condos in Kona have a worrying trend. As of the end of November, they have been dropping each of the last five months, down to just 11 in escrow… hmm.
But it is the holidays and they have a way of distracting buyers (and sellers). So we shall see what our upcoming season starting in January holds for us!
kona houses – condos – land all price points
west hawaii real estate market snapshot
My wife and I recently purchased a condo through Gretchen and couldn’t have been more pleased!!! Her knowledge of the Kona real estate market is “second to none”. As promised, I spoke directly to her every time I called or emailed, and she was very thorough in answering all our questions. She also has excellent local knowledge from housing/vacation rental trends, property development (or not) and best property management practices. We can’t recommend her enough!!!
- The really big news this month is Alaska Airlines buying Hawaiian Airlines. Does anyone else see some irony in airlines named after states buying each other? Anyway… some say that’s a good thing, but it doesn’t seem so to me. I guess time will tell.
- Just days before the news hit the Internet, Hawaiian announced a new daily non-stop red-eye for Salt Lake City to Honolulu beginning May 15, 2024.
- In some news that you will really notice if completed, there is a proposed solar array farm across from OTEC. Sits on 40-acres right off the Queen K highway and is zoned industrial… hmm.
- Hawaii is ranked in the top five states affected by shoplifting… that’s so sad! We all know it takes money to live here. We are expensive! The IRS says Hawaii is in the top 1% of the wealthiest states.
- A 24-plus acre parcel in Keauhou was recently sold for just over $4 million, zoned multi-family. It is on the corner of Alii Drive and Kam III on the mauka side.
- Some surprising news… the County wants to buy the Manago Hotel in South Kona for a 72-unit mental health facility. Of course mental health is important, but is that really the best use for this historic property?
- The County has proposed funds to add 1,000 affordable housing units to Waikoloa… to the tune of just over $10 million… wow!
- A 2019 study found that Hawaii island needed to add 10,000 affordable housing units by 2025.
notes from gretchen
I’m meeting with owners weekly now having conversations about whether they should rent and if so, long or short-term, or should they just sell. For each owner’s circumstance, there is a unique solution; but the rule of thumb is that long-term gives you more consistent income, short-term renting lets you use the property as well. Our other service is a hybrid of the two — we rent them for 6-10 months a year on average and when vacant, the owners come.
The other option, to sell, has been wishy-washy this year… some things sell quickly and others do not. The rhyme or reason to it is often not very apparent so you take your chances. But, most likely, it is the highest price you will get for the next few years. Call or email if you would like to discuss!
There was a national news story about house prices dropping because of slowing sales. So I tested that theory for Kona houses and condos, capping sales at $3 million for November 2022 and November 2023.
For houses, the average sale last year was $1,184,535. Shockingly, as of this year, that is $1,228,617. But the median sales price (the middle) went from $1.030 million to $965,000, or just over a 6% drop.
For condos, the average sale last year was $520,435 and this year it is $438,583. The median went from $481,500 to $412,000 a whopping 14% drop.
My guess is the less expensive sales are weighing heavily in the median number since the high interest rates cap how much home a buyer’s dollars will buy these days.
rentals in kona
Thought for the day
“Continuous improvement is better than delayed perfection.”
out on the town
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