Newsletter

West Hawaii Real Estate Update: June 2023

VOLUME 20, ISSUE 6

The graph this month shows that once again our market has “inverted” for lack of a better term. The availables are less than the pending contracts like they were during COVID.  But unlike during COVID, interest rates are so high the buyers are shying away and the sellers rates on their mortgages are so low they don’t want to sell… unless they have to. Death, divorce, marriage, aging, and new family members many times require a change in housing and that is what our market is running on this year.

Good news is the sales for May came in at 78 total which is slightly higher than the last two months. And pendings for houses and condos are running high, we should still see sales in the 70’s or higher next month also.

In Kona, there are 17 fee simple houses and 22 condos available under a million. Of the 22 condos only five of them are NOT eligible for doing vacation rentals.  Most of the vacation rentals (VR) were built 40-50 years ago and the non-VR inventory is more recently built. The older the building, typically the maintenance costs of the complex and unit are higher over time.

The companion story to this in Economic News shows a big drop in VR occupancy, meaning more owners will sell or go to long term. To discuss your options, call today!

Testimonial

I am so pleased with my new place and the excellent service that you provided throughout the transaction. You always had my best interest in mind and paid very careful attention to all the details required during the negotiations and the escrow process. I will definitely recommend you to anyone I know seeking a Realtor. Thank you very much, I am so glad you were on my team.

B. Darling

Kona Houses & Condos 2021 -2023 – Available – Pending – Sold

Economic News

  • The big story is that Kilauea is erupting again! We had a 3-month reprieve from the vog but that has ended… to the day!  It ended March 7th and started again June 7th, now that is weird! The lava is all in the caldera as of this writing.
  • Redfin says that a third (33.4%) of all houses in the US are purchased with cash, up from 30.7% a year earlier. Almost 60% of Kona houses were purchased with cash this year.
  • The state’s chief economist says that the neighboring islands’ visitors are 85% domestic and 15% international. They see a weakening in US West Coast arrivals this year.
  • Interesting fresh 2023 Hawaii state economic forecast care of Howard Dicus at Hawaii News Now:
    • Population 1,439,000
    • Visitors 9.9 million +7%
    • Visitor Spend $21.1B +9%
    • Income up 3.4%
  • The state says that Big Island vacation rental occupancy for April has dropped to 49%. Our company is in the high 50% range still so most likely it depends on the style and rate of the rental.  Statewide average daily rates were $205 a night in 2019 and now they are $307.
  • Hawaii hotels were 73.9% occupied in April with average daily room rate of $376… not much difference!
  • Airline seats to Hawaii state are dropping across the board from all major West Coast cities. The exception is Denver where United is creating a new hub.

Notes From Gretchen

This is a very strange market.  No inventory, with sluggish sales and lots of price reductions. Yet some properties still sell for full price or even occasionally over-asking. This market calls for seasoned agents who know how to navigate pricing, negotiating, and most importantly, closing!

The last time I asked I think the membership in our local association, WHAR, had right around 823 Realtors. As of the end of May, only 217 of them had closed even one transaction in Kona.  Now there are a lot of locations, styles of property, semi-retired agents etc in that 823 I’m sure, but wow… only 26% had a sale. The national statistic is that 75% of agents fail in their first year and 87% in the first five years.

TAR Legislation

The next iteration of the new proposed vacation rental legislation is set to debut as early as July 5th to the County Council.

If you want more information or are interested in testifying, please email me for the link.

The new legislation wants to regulate and require permits for what has previously been referred to as hosted vacation rentals where the owner or their representative lives on site. The feeling is if there is someone there to regulate the guests’ activities, they will behave better.

The County has openly stated they want ALL of these to turn into long term rentals. Neglecting to consider that the owners might want to also use them for family and friends and that doesn’t work. The penalties start at $10,000 currently. Who wants to take that chance? Crazy!

Rentals in Kona

Available Soon

Kona Sea Ridge Furnished, Ocean View 2/3 with Office and Den
Kona Sea Ridge Furnished, Ocean View 2/3 with Office and Den

Thought for the Day

“The secret of getting ahead is getting started.”

~ Mark Twain

Out on the Town

Randy and Gretchen, just before going on a helicopter adventure!

West Hawaii Real Estate Market Snapshot

Quicklinks

Mahalo!

As always, thank you for subscribing and reading my monthly newsletter! If
you have any real estate questions about West Hawaii please feel free
to call or email me today!

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