Kona home, condo and land sales will top last year’s numbers easily, even as sales slowed in September, a West Hawaii real estate agent says.
Even with the quickly ramping up improvements, West Hawaii’s real estate market has room to double the number of sales, still, Gretchen Lambeth said.
Lambeth has compiled monthly statistics tracking the market here for years. From January through September this year, Kona sales totaled 796 houses, condos and land parcels. For the same time period last year, agents in West Hawaii sold 650 houses, condos and pieces of land. That’s an 18 percent increase from last year.
The market last peaked, for sales volume, in 2004 at 1,602 sales. The price peaked between 2005 and 2006. The last upswing started in 1998, a year that saw 834 sales for the year.
A few factors continue to drive the market.
“People that have cash aren’t necessarily thrilled with the stock market,” Lambeth said. “And their savings account isn’t making them money.”
The cash buyers may soon be moving on, though, Lambeth said, as prices continue to creep upward. She said she was able to help a client buy the last short sale at the Alii Lani complex about 18 months ago for $138,000. The cheapest unit in the complex is now listed at about $238,000.
Come January, one of the busier times for West Hawaii real estate, buyers may not even be aware of the recent price increases, she said.
“I think there is a little pause here, probably until January,” Lambeth said. “A whole new group of buyers will come in who don’t think the prices are high.”
Driving prices up is the decreasing inventory in West Hawaii. Lambeth on Thursday counted six fee simple houses for sale under $400,000, with the cheapest house for sale that can be bought listed at $319,000. Kona has 25 houses in the $400,000 to $500,000 range and just 113 houses listed for less than $1 million. As inventory goes down, real estate agents are going out in search of properties that might be for sale before they even get listed.
“Because they’re buying them off the market, they’re paying a much higher percentage of list price,” Lambeth said.
The time is coming again, as in 2003, when Kona will have no houses available under $400,000.
Declining inventory, increasing interest rates and rising prices means some local buyers have been priced out of the market for single-family homes and are back to looking at condos, she added. Adding to the pinch for locals, she said, is a tightening rental market.
“Rental rates are going through the roof and there’s nothing to rent,” she said. “Our occupancy is going up in rentals.”
Some property managers have even changed their outgoing voicemail messages to alert callers that they have no rentals available at all.
The luxury market is doing OK, Lambeth said. Forty-six houses costing $1 million or more have sold thus far in Kona this year, with the most expensive going for $21 million. That Kukio property was listed at $25 million and was not on the market for a day before it sold.
Messages left with another real estate agent who tracks West Hawaii real estate statistics and an appraiser were not immediately returned Thursday.