The Changing Real Estate Picture Shifts into High Gear

The picture is changing fast, and now it's no longer just oceanfront and ocean-view properties that are going up in price. About the only East Hawai'i properties that haven't joined the race are the really rural ones, and in the small communities like Mountain View and Kurtistown (farming areas on the way up to Volcano). Volcano area prices are staying fairly stable, too, and this is mostly due to the distance from Hilo and the cold weather. For sure, there are lots of folks who love the Volcano area-and the cold weather-and for them this price stability is a blessing.

Other stable areas are most of the rest of the tracts of lots all over lower Puna. Hawai'ian Paradise Park (HPP) prices are staying reasonable for the most part, unless you get really close to the ocean. Leilani Estates is an exception, as it is farther from Hilo than HPP, yet the prices are going up. This is probably due to the lush, well-kept appearance of the community. It is one of the most attractive developments of its kind on the Island, and in spite of the reputation for lots of rain, the nicer properties in Leilani are selling well.
The most dramatic price increases are seen in Hilo homes and in properties north of Hilo on the Hamakua Coast. On the Hamakua Coast, the closer you are to Hilo, the higher the price. Other factors that influence Hamakua prices are accessibility, paved roads, nearby utilities, and of course the lay of the land and the view. Vacant land parcels with killer ocean views are bringing huge prices now, and if such a property has a paved road right to it and utilities available, it really is a seller's market. A typical eight- to ten-acre parcel of bare land with a good ocean view will bring a minimum of $150,000. If there's an exceptional view, good access and perhaps utilities at the lot, we've seen prices of $240,000. And they're selling like hotcakes at those prices.
Right now, more often than not, if you find a place listed on the Multiple Listing Service (MLS) on your computer, it is already sold. The reason is that as soon as a realtor gets a desirable listing, all s/he need to is make a few calls and that property is gone. So by the time most properties get up onto the MLS, they are history.
At this point, it is safe to say that any property that appears to be a terrific deal but has been on the market for more than a few days is a dud. We've looked at a lot of them, always hoping for that "sleeper" that somehow slipped through the cracks. There's always a reason why it is still available. Maybe it's because there's not even enough level land on ten acres to build one house. Or you finally find the property only to discover its downwind from a smelly hog farm. We found one beautiful parcel that we felt was priced well but there was a really exciting ten-minute four-wheel-drive adventure getting up to it. That one is still a possibility, although we figure it would cost about $25,000 to put in a road to the property. And that would be a basic, rough gravel road. A steep, rough, basic gravel road.
Our search for a small house in Hilo to use as a rental is bringing the same results. Any house that is still available two or three days after it is listed has serious problems or it would be sold already. The problem might just be that the property is seriously overpriced. On these, if we like the property, we will put in an offer of what we feel the place is worth. You never know, maybe the owner is getting anxious because there have been no offers in this hot market and will now get real about the price. But we've also had our offers rejected with a certain amount of gusto, too. You never know until you try.
We're also looking for a place on the Hamakua coast for ourselves. We have been diligently searching for some time now, and every time we see what appears to be an attractive parcel, we call immediately on the new listing and are told that there is already a full-price offer and a backup or two.
Bottom line: The days of super bargains on Big Island desirable properties are over. We have been discovered. Big time. Big Island prices are beginning to compare to prices on the other Islands now, where prices have always been thought to be out of reach for all but the wealthy.
If you happen to seek something other than what the majority feels is "desirable," you're in luck. There are still lots of inexpensive homes and lots out there in the rural areas and in areas that do not offer the great views so important to most buyers these days. Our original promise of homes for less than $100,000 still stands, at least for now. And yes, you can even still find livable homes for half that amount.
I would like to close this update with my usual recommendation to all folks seeking property in Hawai'i: Please don't even think about it if all you are trying to do is cash in on escalating real estate values. In Hawai'i, we practice a lifestyle called "aloha," and a huge part of this way of life is based in giving back to the community. Coming to Hawai'i for the purpose of extracting profit from others at the expense of the entire Island community is the antithesis of aloha. We have personally observed a number of people who have ventured into the Islands for no other reason than to make a fast buck, and they never survive for long.
Hawai'i has her way of expelling people who are here for the wrong reasons, and those are the folks with all the horror stories to tell their mainland friends about how inhospitable it is here, and how they couldn't make it here because of how the locals all hate haoles.
If you feel called here, if in your heart you know you must live here, if you already live a life of aloha where you are now and are prepared to bring that with you, welcome to Hawai'i!
A hui hou!
Skip Thomsen
Updated 9/24/03