“This rising price trend should run for at least another year, as 2005-2006 will see the first deliveries of the wave of high-end developments that were started two years ago,” Cassiday said.
BY BOBBY COMMAND
WEST HAWAII TODAY
bcommand@westhawaiitoday.com
The market for resort homes on the Big Island as well as the rest of the state took off last year, hitting record levels in both average prices and closings.
Interestingly enough, Hawaii and Maui, each with higher average prices than Oahu and Kauai, saw significant increases in sales of both condominiums and single-family residences despite average tabs hovering around the $1.5 million mark.
“For 2005, the market sailed into record territory, both for closings and average prices,” said Ricky Cassiday of Real Estate Market Research Co., who reported that closings were up 10 percent after less than a single-percent increase in 2004.
According to statistics provided by Cassiday, statewide average prices also rose 29 percent last year after a 24-percent increase in 2004, rising to $1.25 million in 2005 after going up to $961,881 two years ago.
The average price of a Big Island home in a resort area last year was $1.65 million, the highest in the state for at least the fifth year in a row. It represented a 36.6-percent increase over the previous year and a 15.3-percent increase during the last five years.
Maui followed at $1.46 million, an increase of 38.8 percent.
“The very high prices on Maui and the Big Island alone might tempt buyers to migrate out of these markets and to venture into other ones,” said Cassiday, who added Kauai was the place to seek a bargain at $731,960.
Oahu’s average price of $903,523 represented a nearly 80-percent increase from 2004, when its resort homes were the least expensive in the state. Honolulu’s resort prices have also increased by three times in the last five years beyond the average price of $309,982 in 2001.
Cassiday said the Big Island closed more resort residential units than any other island since he began keeping statistics with 713, ahead of Maui’s 653.
“Up until 2004, Maui had the deepest market,” said Cassiday. “This year, for the first time — but probably not the last — the Big Island will wrest that distinction, thanks to ample available land, an active building industry and innovative new resort properties catering to the very high end.”
Hawaii County closings in the resort residential sector have also steadily increased by an average of 20 percent over the last five years, outpacing a relatively static Maui market which has increased an average 3.5 percent.
Oahu experienced a huge increase in its overall market last year at 153.6 percent, but volume remained relatively low, with the capital island closing only 279 total resort residential homes in 2005.
Despite the strong market, Cassiday said developers have lagged in offering product, since resales outnumbered closings on new homes by almost three to one.
“The new home production shortfall historically was due to supply constraints, at many levels,” he said. “There isn’t enough construction capacity on the outer islands. As a result the resale market had to shoulder the burden of demand.”
Sales of condo units outnumbered single-family homes by more than two thirds. Last year, 1,568 condos were moved, as opposed to 395 single-family homes and 326 vacant house sites.
Average prices for each product also increased last year, with vacant lots jumping by almost 35 percent from $1.3 million to $1.9 million, single family homes going up 13 percent from $1.4 million to $1.9 million, and condos rising from $754,095 to $947,776.
Cassiday said the spike in condo prices was the result of new projects that were offered for sale last year.
“This rising price trend should run for at least another year, as 2005-2006 will see the first deliveries of the wave of high-end developments that were started two years ago,” Cassiday said.