West Hawaii Real Estate Update: June 2024

VOLUME 21, ISSUE 6

May was a great month for closings and the highest of the year so far. We had 40 houses, 42 condos, and 10 pieces of land go to closing in Kona. We now have 200 plus residential properties available in all price points to purchase, a new high since January of 2021. We have 90 condos and 14 houses available under a million.

Pending sales are slowing and that is typical for Kona at this time of year. Buyers are focused on graduations, vacations and weddings now, and soon it will be back to school in August. Cash closings are still very strong at 57% since the price of lending is still high.

image of a hula dancerThe U.S. Census estimates there are 15 million vacant homes in the nation, mostly inherited or abandoned. Another 25 million were built 20-40 years ago and will soon be in need of renovations. According to a recent Inman article, this market segment will represent 20% of listings in the near future and real estate agents will need to be ready to assist with these major repairs.

We started a renovation division a few years ago with a licensed contractor and we regularly work on just this type of property for owners looking to get top dollar when they are ready to sell.

I don’t see any new houses being built in Kona soon so this is the only way to increase our inventory.

KONA – ALL PRICE POINTS – RESIDENTIAL MARKET

west hawaii real estate market snapshot

Testimonial

I was impressed with her experience and meticulous approach. Throughout the process, Gretchen offered constant communication updates to ensure everything was addressed accordingly. She also provided continued guidance to explain questions I had along the way. She will go to bat for you to make sure you are well-represented as her client. I’d highly recommend her to anyone! She’s set the bar exceedingly high.

L. Choy

economic news

  • Correction! Hawaii’s minimum wage is currently $14 an hour, set to go to $16 in 2026 and $18 in 2028. An eagle-eyed reader caught this… mahalo!
  • The Waimea hospital just got a grant from the US Department of Health for $750,000 to help train doctors.
  • The much debated project between Pualani Estates and Kona Vistas above “Queen K” is now officially dead in the water. The County Council has rejected the request to extend their 10-year requirement to start building. Yes, more traffic, but it would have been 450 new places to call home.
  • Hawaii Island hotels had an occupancy of 64% in May which is lower than last year.
  • Someone thought we needed a study to tell us we need a new hospital where the people live… pretty sure anyone who lives here could have told them that instead of spending money on the report. The good news is it would cost about $554 million to $653 million to build it. That really isn’t as bad as I thought!
  • The Benioffs are at it again, buying and donating 148 acres for affordable housing. It is contiguous to the other 282 acres they donated previously, making it 440 acres on Kawaihae Road in Waimea. They also gave $7 million to help get it started!
  • The state of Hawaii had 753,551 visitor arrivals in April 2024. This is down 9% from April 2023.
  • Duke’s is coming to the Outrigger hotel in Keauhou!    

notes from gretchen

Vacation rentals are under fire in every Hawaii county and a recent report on their economic impact is just mind-blowing. The report estimates vacation rentals provide housing for one third of our visitors, and jobs for 66,000 people statewide. These vacation rental guests are responsible for almost $1 billion in State and County taxes and $11 billion in economic output.

This is not something to casually discuss with the County Council who has none of this data available. Eradicating vacation rentals might provide more long-term housing, but without jobs people will still have to move away. Here is a description by a local lender in his weekly newsletter: hawaiimortgage.net/mortgage-market-news-and-insight-june-22

INTEREST RATE IMPACT

For historical purposes, I bought my first condo in 2001 with a 7% interest rate. The difference is it was a $100,000 condo with a monthly fee around $150. Let’s call it $900 a month with property taxes. If I factor in inflation for 23 years, that is roughly $1,600. I was making big money at $50,000 a year and 40% of my income went to “shelter” costs.

Now, condos are in the mid-500’s or higher and the fees are now $756, because the insurance costs have skyrocketed. So as an illustration, a $550,000 loan on a 2/2 condo is $3,600 a month, fee of $756, that is $4,300 before property taxes. You can rent the same condo for around $3,000 a month probably. Lots of pros and cons to owning and I’m usually in the “buy” column but I don’t see how it makes sense for most now.

rentals in kona

Thought for the day

“Almost everything will work again if you unplug it for a few minutes, including you.” ”

~ Anne Lamott

out on the town

Saturday breakfast with a view at Island Lava Java.
The 2024 King Kamehameha Day Celebration Floral Parade.
Enjoying the view of the outriggers.

Mahalo!

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

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