Real estate agents and appraisers agree — West Hawaii’s real estate market is hot again.
If people considering buying a house now wait another six months, it could cost them $50,000 more than current house prices, Coast Properties Ltd. owner Stathie Prattas said Monday.
If they can’t afford that increase, “then they’ll have to wait another eight or nine years,” for the next real estate bust, Prattas said.
Things are trending up in West Hawaii, he said.
“Inventory has been reduced significantly,” Prattas said. “Prices are starting to rise.”
Interest is up and people are trying to buy, he added.
“It’s a wonderful thing,” he said. “We have entered a new real estate cycle.”
Real estate agent Gretchen Lambeth agreed the West Hawaii market has entered a new cycle. From the first quarter of 2012 to the first quarter of this year, Lambeth has tracked home prices increasing by 13 percent. That’s a little more than 1 percent a month.
“It means it’s raging hot,” Lambeth said. “The market is going really well. There’s nothing to sell buyers.”
Kona has 82 homes under $500,000 in escrow, and only 47 homes in that range on the market. Buyers tend to want either a property near the airport — Coastview, Palisades and neighborhoods through Hina-Lani Street — or want something south of Hina-Lani, closer in to town, Lambeth said, which limits even further how many properties they can view.
Inventory is down about 30 properties since January, she said in her monthly newsletter, which tracks real estate sales and statistics in Kona and Kohala.
Inventory of houses and condos costing less than $1 million in North Kona has dropped from more than 350 in January 2012 to roughly 275 this month.
“A year ago, we were honing and getting the whole list of things people wanted (in a house),” Lambeth said. “Now you get the short list.”
People are lucky if they can even find a house that fulfills all the things they want on their shortened list of requirements, she added.
The first quarter of 2013 ended with 223 sales of houses, condos and land, she said, the most of any starting quarter since 2006. The low point was the first quarter of 2009, which had only 89 sales, she said.
Lambeth said 43 home sales closed in March, and about 40 closed in February.
“It happened overnight,” she said.
Prattas said he’s starting to see the high-end market perk up, and the commercial real estate market has picked up speed as well.
“The last portion to kick in would be land and construction,” he said. “Land has been sluggish for years.”
That could be changing soon.
“With reduced inventory, buyers are starting to be dissatisfied with what’s around,” Prattas said. “Once construction is hot, we know we’re at a robust economic cycle.”
On the appraisal side of the market, Larry Baird said he agrees that the market is finally picking up speed.
He said he did wonder about the stability of the market, though, considering the majority of the buyers he’s seen are coming to Hawaii Island from somewhere else.
“How stable is the mainland economy?” Baird said. “Our market is going to be dependent on how well the mainland economy does.”
The buyers from the mainland tend to be baby boomers, either trying to retire or buy a second home, Baird said.
“If it’s retirees, it’s very positive for the economy,” he said, adding second-home buyers may contribute less to the economy because they don’t live here year-round. “I’m not sure how much it helps.”
Baird, with four decades of experience in West Hawaii, said this cycle is starting a little differently from previous ones, mostly because of the dependence on mainland buyers.
“We look good in the short term,” Baird said.