West Hawaii Real Estate Update: October 2023
VOLUME 20, ISSUE 9
Sales in September were as expected, closing at an even 60 properties in Kona — 25 houses, 30 condos, and 5 pieces of land. Our overall sales year-to-date are exactly 400 short of the end of last year so I’m confident we won’t reach that benchmark. We might make it halfway since available inventory is increasing, at least for houses. They jumped to 89, a 16% increase over August.
We aren’t seeing dramatic decreases or increases in condos or land in the available, pending or sold categories, just steady as they go. Although there is a slight trend down in condo pending sales, but that is to be expected after the winter high season.
Cash sales are holding at over 50% in Kona but have fallen slightly in Kohala to 47%. I think there is a general lack of enthusiasm for the existing inventory, a lot of what I’m seeing is damaged or extremely dated, and being priced as if it were in good condition. Buyers aren’t enthusiastic about repairs, not knowing how long they will take, how much they will cost or who to hire. Horror stories abound from those hiring unknowns who never finished the job and a few who never even started! We do offer renovation/repair management services for a fee to our clients and many are taking us up on this since we work directly with licensed contractors for them.
kona houses -condos -land all price points
West hawaii real estate market snapshot
The bottom line first is that we definitely recommend Gretchen to sell your home. We were sold on her from her presentation package. It was so detailed and comprehensive about how we compared with historical trends and to our current competition. We really appreciated that she has great contacts in the construction trades and was able to get any necessary work done quickly. She made herself available at any time for questions or concerns.
- The Mauna Kea Beach Hotel has announced it will start a $180 million renovation to commence in the second quarter of 2024 and complete early in 2025. The resort, built in 1965, will renovate rooms, dining and much more.
- Hawaii state vacation rental occupancy is down to 54% in August 2023, from the recent high of 74% in August of 2019. This will cause some pain for owners who are under pressure to break even with the rapidly rising maintenance fees and taxes.
- Hand-in-hand with occupancy is arrivals which were 769,200 to the state in August. Down 17% from August of 2019, but also down from last year too.
- The Big Island had 153,000 arrivals in August.
- What happens to your mortgage if your house burns down? You still have to pay it and rent somewhere else until your house is rebuilt. Please, please, please check your policy to make sure you are correctly insured to avoid being under-insured in a disaster. Many of those affected by the Maui fires did NOT carry coverage for renting until their properties are rebuilt.
- The building that was never completed on Alii Drive by Royal Kona Resort has a new plan before the County. Instead of the original 48 rooms, now they want 100, and when completed it would be a Residence Inn by Marriott… Not sure downtown can handle that many more guests with Uncle Billy’s under renovation also!
Notes from gretchen
Commission lawsuits are set to disrupt the real estate industry and the consequence might be over a million Realtors leaving our industry. Are you aware of all the work the National Association of REALTORS (NAR) does to benefit consumers?
NAR with its 1.6 million members is a powerful group that protects consumers, for example lobbying against legislation in Hawaii to… increase capital gains taxes, apply tax on empty homes, add a state property tax in addition to the county property tax we already have, require all owners to take Section 8 rental housing vouchers if the tenant applied, or if you asked the tenant to leave you would have to pay their relocation costs! We do much more than just facilitate buying and selling real estate!
Insurance Part 2
Insurance for condos is a huge struggle these days. There are only two insurers that cover high-rises, and if one raises your rates there is nowhere else to go since the other insurer is probably just as high.
I am hearing about increases ranging from 15%-20% last year and again this year. So if your maintenance fees are soaring, this combined with increased labor, water, and electricity will begin to drive some condo owners to call it quits and sell. A few have already reached out.
Some condo complexes will most likely be under new scrutiny in the coming years to make sure they haven’t delayed repairing/replacing some critical component of the complex that could lead to big damages in the future, like the building collapse in Florida a few years ago.
Rentals in kona
Thought for the day
“Don’t judge each day by the harvest you reap but by the seeds that you plant.”
~ Robert Louis Stevenson
Out on the town
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