West Hawaii Real Estate Market Update-3rd Quarter 2014

Of course, one of the 365 Things to do in Kona is to buy a home! If you are thinking about moving to Kona, here is the 2014 3rd quarter update brought to you by my client, Realtor, Bill Babbitt, Century 21 All Islands. The market overview basically is this: All the lower priced homes have been snapped up and there is not much inventory coming onto the market, which is driving up the cost of what IS available. The long term forecast for Kona real estate is price and demand will continue to rise until 2016. Bill gives an in-depth report below and for you real estate junkies, he includes the sales volume, as well.

Median Sales Price for Homes and Vacant Land

North Kona including Kailua Kona

Although we saw some slowing in the number of sales and dollar volume in the 3^rd quarter for West Hawaii, the median price continued to climb as a result of increased demand on a limited supply of properties available. The market here on the Big Island remains strong, as buyers see value here compared to the other Islands. The bright spot for the third quarter is in vacant land sales. Dollar volume is up nearly $20 million, reflecting a 31% increase over the 3^rd quarter 2013. This huge increase is largely attributable to four significant ocean-front multi-million dollar land sales in Mauna Lani and Mauna Kea, in addition to several multi-million dollar sales of building sites in Kohanaiki and Hualalai Resorts.

Median Price

The median price of a single family home in North Kona jumped nearly 18% in the 3^rd quarter, from $467,900 to $550,000. It is likely that the median price will continue to rise as the inventory of lower price homes continues to shrink and the number of homes sold in the higher price ranges continues to grow.  Year to date, the median price stands at $525,000, and has been unchanged for the past 2 months.

Altos Research Days on Market Graph For Kona

The median price of a condominium in North Kona for the 3^rd quarter is $250,000, up nearly 9% from the same quarter last year. Year to date, the median price stands at $267,000, up 16% over 2013.

Number of Sales Transactions

For residential sales in North Kona, single family home sales were relatively the same for the quarter compared to 2013, as there were 122 homes sold in the third quarter of 2014, compared to 124 in 2013. Year to date sales for homes are down 12%, with 338 homes sold in 2014, compared to 384 sold in 2013. Additionally, there were 8 fewer condominium sales in the third quarter in North Kona, which reflect a 9% decrease. However, the number of condominium sales is up nearly 2% for the year.

Dollar Volume in Sales

It’s a mixed bag in dollar volume for the 3^rd quarter in North Kona. Single family home sales volume was down nearly 15% for the quarter, and is down 7% year to date compared to 2013. Likewise, condominium sales volume is down 11% for the quarter, and down 9% year to date. I attribute this decline to fewer higher end homes selling, and more homes in the lower end of the spectrum selling during this period.

Vacant land dollar volume sales are the bright spot in North Kona for the 3^rd quarter, as they are up a whopping 49%! The main reason for this huge increase was the sale of several parcels that included the Makalei Golf Course, valued at $7 million. Backing out this one transaction, North Kona vacant land sales are still up 24% for the quarter. This increase is mainly attributable to 11 multi-million dollar sales of single family building sites in Hualalai and Shores at Kohanaiki Resorts.

Due to the sale of the Makalei Golf Course, and the 11 multi-million dollar home site sales, the median price for vacant land in North Kona increased 69%, to $337,000. Backing out those sales, and two other large acreage tracts, the median price is $247,500, which is still up 24% over the 3^rd quarter 2013. Demand for single family home sites has increased dramatically in the past year, and is reflected in the higher median price.

South Kohala Median Price trends

All Big Island

Median Price

The median price for a home on the Big Island is $318,000, up 10% from the 3^rd quarter last year. Year to date, the median price for a single family home on the Big Island is $312,500, up 6% over 2013. The median price for a condominium is now $316,500, with a double digit increase of 15% for the 3^rd quarter. Year to date, the median price for a condominium on the Big Island stands at $295,000, which is up 12% over 2013. The median price for a piece of vacant land on the Big Island jumped 14% in the 3^rd quarter, to $32,000. There are still some very affordable vacant land parcels in the Puna and Kau districts of the Big Island.

Number of Sales Transactions

The 3^rd quarter of 2014 saw a cooling off in the number of residential sales that occurred on the Big Island. The number of single family homes sales dropped from 517 to 489, a 12% decrease for the quarter. The number of sales is about the same compared to 2013 year to date. The number of condominium sales is down 11% for the quarter, but is up 4.5% year to date. Vacant land sales for Q3 were also down, by 11%, but remain up 7% year to date compared to 2013.

Dollar Volume in Sales

Dollar volume in residential sales for the 3^rd quarter 2014 reflects a 12% reduction, in line with the slowdown in number of transactions stated above. However, year to date compared to 2013, dollar volume for single family homes is down just 1%. Sales volume for condominiums for the third quarter is down 14%, while down only 2% year to date.

The bright spot for the third quarter is in vacant land sales. Dollar volume is up nearly $20 million, reflecting a 31% increase over the 3^rd quarter 2013. This huge increase is largely attributable to four significant ocean-front multi-million dollar land sales in Mauna Lani and Mauna Kea, in addition to several multi-million dollar sales of building sites in Kohanaiki and Hualalai Resorts.

I attribute the increase in median sales prices across the board largely to the reduction in available inventory in homes and condominiums, and a resurged interest in vacant land.

Bill Babbit is a local Realtor specializing in West Hawaii real estate. You can reach him directly at 808-430-9411 or email at [email protected].