West Hawaii Real Estate Update: March 2024

VOLUME 21, ISSUE 3

February gave buyers a few more choices in houses with 118 in Kona, and a tad less condos at 81. Houses sold were up 10 units in all price points in Kona or 25%. That is substantial and condos held at 18. Pendings in houses shrank to 68 and condo pendings jumped a whopping 30% to 49.

Cash sales in Kona are holding steady at their typical 50% range. Kohala, however, has changed dramatically to 64% for 2024… 33 out of 51 sales ranging from $369,000 to over $6 million, with 25 closing over a million. The high interest rates are creating this interesting phenomenon and probably less competition for the properties, since most buyers cannot afford to offer all cash. All cash makes some elements much easier in a deal… no appraisal required, faster closing times, and way less paperwork! The bummer is, buyers who need lending are being “priced out” by the interest rates and high prices.

And with insurance and property taxes increasing by big percentages, it is even more difficult to qualify. So buyers need a house that has already been repaired or renovated since there is nothing “left over” to do that once they close.

In condos, the increasing maintenance fees are pricing buyers out as well… some up 50% in the last two years… yikes!

South Kohala Cash Sales – 1992 to 2024

graph of cash sales data for South Kohala, Hawaii, from 1992 to 2024

west hawaii real estate market snapshot

Testimonial

Gretchen works hard for you, ensures your property is ready for sale, which in turn gave us the price we asked for. We refer anyone who asks for a Realtor to Gretchen. Whether it’s to purchase or sell a property, or the property management services her company offers. We are very grateful she made time for us.

Baxter & Debbie Caterson

economic news

  • Honolulu Zoo… named the best in the USA! Wow, that is hard to imagine but I have the article if you want to read it!

  • After having the Kona Airport shut down twice this year for runway pot holes, the Feds are giving Hawaii $520 million to make repairs and repave most of them… whew!

  • The unending conversation about free parking in Kona is getting a small break. Adjacent to the public lot on Kuakini, the alley/road behind it has 14 stalls abutting what used to be the old Kona Seaside hotel years ago. They evidently belong to the County, and we are getting them back! Yippie!

  • Marc & Lynne Benioff, founders of SalesForce, just gave the largest single private donation in the state of $150 million that will connect Hilo Medical Center with Straub (HPH Honolulu) and UCSF. They also separately gave $100 million to Straub to redevelop the “health care campus of the future.” See, having wealthy residents does pay off!

  • Evidently HELCO is combining all of its rooftop solar programs into one, with the exception of the original net metering group. So if that is you, reach out to them. The deadline to chose how to proceed is quickly approaching!

  • Hawaii farmland has shrunk to 1.05 million acres in 2022 from 1.14M in 2017. Most farmers are over 60, and the vast majority of farms are only 1-9 acres!

  • Construction costs are poised to rise 6% in 2024.

notes from gretchen

Vacation rental rezoning/permitting is getting worse by the day with reckless politicians using video messages that inflame tensions and send inaccurate information out to owners/residents/potential buyers. I have owners worried that their property rights will be taken away or truncated without any due process for themselves and their asset . Even though the most recent local County bill altering how we permit vacation rentals on the Big Island seemed aggressive (see next section), now by comparison to the State bills, and the Governor’s and legislators’ public comments, it seems downright great.

Only time will tell what gets passed, but this will have a chilling effect on buyers even considering Kona as an option.

URGENT: TRANSIENT ACCOMODATIONS RENTAL UPDATE

The TAR bills package was referred from the County Council Policy Committee on Planning, Land Use, and Development on 1/23/24 to both the Windward & Leeward Planning Commissions for comment. The Windward Planning Commission will hear the bills on Thursday April 4th at 9:00 AM and the Leeward Planning Commission will hear the bills Thursday April 18th at 9:30 AM.

There is still time to SIGN UP TO TESTIFY at the April 4 Windward Planning Commission hearing. Here are the deadlines:

  • Email testimony is due by April 2, 2024 at 4:29pm
  • For verbal testimony via Zoom you will need to register no later than noon of April 3, 2024.

Here are the deadlines to sign up to testify at the Leeward Planning Commission hearing which is on April 18, 2024:

  • Emailed testimony is due April 16, 2024 by 4:29 PM
  • Mailed testimony is to be provided at least one week prior to the hearing date.
  • Verbal testimony via Zoom: Register no later than noon on April 17, 2024.

AGENDA DETAILS

INFORMATION ON THE BILLS

Insurance… Again!

Allstate phoned after last month’s comment that they were getting out of the condo insurance market in Hawaii. Here is the clarification. All new policies are on hold, but they are renewing existing policies. If you have an existing policy and are buying a new condo, they will most likely cover you there.

But the pain continues, one Alii Drive complex had a 70% increase this year in the association insurance coverage, another was at 76%. I have an owner whose HO6 liability insurance (walls in) went up 150%.

Condo complexes have started to alter the lender-approved deductible rate to a higher percentage like 8%, Fannie Mae and Freddie Mac only approve 5%. Now it will require specialized lending and higher down payments.

rentals in kona

photo of condo looking from the kitchen toward the living area and the ocean view

Thought for the day

“Just don’t give up trying to do what you really want to do. Where there is love and inspiration, I don’t think you can go wrong.”

~ Ella Fitzgerald

out on the town

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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