West Hawaii Real Estate Update: March 2023
VOLUME 20, ISSUE 3
I love the graph this month, it is a very good visual as to what happened to our condo market. It started with us running out of houses to sell to mainlanders who were fleeing COVID in 2020 when no one wanted a neighbor. Then Hawaii opened up with shots and testing and the available inventory fell off that proverbial cliff and has never recovered.
Prices have risen dramatically in that same timeline, making them less attractive to buyers. Also, those low-interest loans are literally irreplaceable these days. No one seems to want to “move up” to a better property and trade what they have for a 6% interest rate or higher.
In February 2019, the average under a million condo price was $373,000. Today that is $544,000, a 46% increase in price! Now as we all suspect there is some “froth” in that number… not enough condos to go around, and buyers know it. They are willing to wait the sellers out till they get to a price that works for them.
Year-to-date Kona has seen 50 houses and 44 condos sell in two months. Sounds bad till I tell you out in Kohala, they only sold 19 houses and 27 condos in the same time frame… and not one parcel of land closed escrow last month out there… holy cow! It was 11 years to the last time that happened.
Call me with your questions!
Gretchen recently sold our rental home in Kona. Since we live in California, we had to rely on her to coordinate a number of vendors to make repairs and improvements prior to putting it on the market. She did a terrific job coordinating the vendors, and getting the work done in a timely manner. All of her efforts resulted in a successful sale!
Kona Available Condos under a Million 2019 to 2023
- This goes in the hard-to-believe column: after almost a decade of raising prices every year, the water department is proposing to decrease the power cost charge. If approved, each household should see an improvement of around four dollars a month.
- The volcano has stopped again! After 61 days of erupting we are once again VOG free… let’s hope it stays that way! Hip-hip hooray!
- The Manago Hotel in Captain Cook was one of six restaurants awarded the James Beard Foundation’s America’s Classics Award across the nation. Built in 1917, it is the oldest continually operating restaurant in Hawaii.
- Kona has a new hotel! PACIFIC 19 Kona is slated to open in the previous Kona Seaside Hotel this spring and will start taking reservations in April. It has some local ownership, which is nice to see, and is billing itself as an “adventure travelers” hotel.
- A recent study from ATTOM, the industry’s leading real estate data company, showed that 61% of Hawaii Island homeowners have 50% or more equity in their homes.
- Four Seasons Hualalai was ranked 5th nationwide by U.S. News & World Report last month. The Mauna Lani Auberge hotel came in 15th.
- Even though Hualalai beat out the Mauna Lani in the hotel rankings, the Mauna Lani’s South Course was named #1 golf course by NBC GolfPass Golfers’ Choice for 2023.
Notes from Gretchen
Sometimes when I analyze data I get zeroed in on what is happening now, and on occasion it is better to step back a bit and take a broader view like we did this month with historical trends.
What goes up, comes down and what is down, goes up… eventually. These rhythms of the market might have you rethinking how you are going to use your property. We are here to help!
Here at Hawaiian Isle Real Estate we offer a broad range of services, so we can assist you with your ownership plans and strategies. Whether it is vacation or long-term renting your property, or checking your property every few weeks, or even selling, let us help you today!
There are two main pieces to our tourism industry: visitor arrivals, and how much they spend. The state taxes visitors up to three times, with GET (4.71%), State TAT (10.25%) and now County TAT (3%). In 2009, there were 6.4 million arrivals to the state, a low for us. In 2022, we had 9.2 million arrivals, spending a combined $19.3 billion or $2,100 each. In 2019 when we had 10.2 million arrivals they spent $1,722 each.
So the state’s revenue went up with a million fewer visitors. Good for the wear and tear on the state and good for our tax coffers. This illustrates the fight between hotels and vacation rentals for guests in what is a shrinking market since 2019. The state prefers the guest who spends the most… and that is typically a hotel guest at roughly $100 more per day in room rates, and they eat out most of the time since they have no kitchen.
Rentals in Kona
Thought for the Day
“The years teach much which the days never know. ”
~ Ralph Waldo Emerson
Out on the Town
For Randy’s birthday he wanted another cruise to an old haunt where he and his buddies fished years ago… Cabo San Lucas! So off we went… Cabo San Lucas is not at all what it use to be — it’s now a huge tourist town with giant yachts in its harbor… what a difference 30 years makes!
We took the Norwegian Bliss out of Los Angeles to Cabo, Puerto Vallarta, Matzatlan and Ensenada. The ship was huge, holding almost 5,000 passengers. Another great week out on the water for the birthday boy!
West Hawaii Real Estate Market Snapshot
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