Prices are leveling . . . they say.
January 20, 2006
Funny thing, some of our local realtors insist things are slowing down while others insist they're not. We just go by what the ads and the sales are telling us: Prices are not coming down even though in some price ranges there is more inventory now than there has been recently.
Our personal take on this situation is that more homes in the low-to-mid price range are on the market because sellers feel they can still "cash in on the last of the bubble." The price range in which we see more inventory is $200,000-to-high $300,000. Of course as we go look at some of these offerings, we see that many are over-priced fixers. There are also some really nice homes for these prices, depending on where you're looking.
It's easy if you watch what's going on. The houses that come up for sale and stay on the market for weeks on end are overpriced. They are either in tough shape, in a bad location, have no street presence, or there is some other reason why nobody is interested. But again, nobody is interested at the listed price. The properties are overpriced for what they have to offer.
Here are some year-end 2005 stats from our local paper, The Hawaii Tribune-Herald:
"Real estate prices continue to soar on the Big Island in 2005, although there were signs that the market was cooling late in the year.
"But you wouldn't know it from the construction boom. As of the middle of November, 2005, the county had issued $935 million worth of building permits, eclipsing 2004's record of $913 million for the entire year."
This same article also stated that prices all over the state continued to rise. The median price of the single-family home is now $379,000, up from $318,000 a year ago.
When going into shock over these "median" prices, one needs to keep in mind that Hawaii is unique in the number of WAY expensive homes there are in proportion to total number of homes. It only takes a few multi-million-dollar homes to push that median price into orbit. The bottom line is that although there are still homes for sale on the Big Island for less than $200,000, there aren't a lot of them. The ones you will find for that amount are either serious "fixers," or they are in outlying areas.
Pahala still remains one of the areas of affordability. It is a beautiful place. It is peaceful, quiet, close to a wonderful black sand beach and close to Volcanoes Park. The downside for most folks -- and this is what keeps the prices down -- is the long drive to Hilo. If you are in a position where you won't need to make frequent trips to town, this might be your spot.
Just upslope from Pahala is Wood Valley, a real gem of a location. Not many sales up there, but when there are, it's fabulous! Again, the distance from town keeps it affordable.
The Puna District, the most affordable area of the Big Island, is still the fastest growing District. According to census estimates, the Puna District is growing by about 2000 residents a year, twice the growth rate of the 1990's.
The Big Island is gettting crowded. Traffic is becoming a problem. Long lines everywhere are starting to be the way of life here. For those of us who remember the simpler times here, it is sad. But we can all make it work if we will always remember to
Live Aloha!

Mahalo for "listening."
Skip Thomsen & Ohana
Updated 1/20/2006