April North Kona Residential Market Activity (to $4M)

Peak Market: Signals the end of real estate cycle. Neutral Market: *Pending ratio from 30 to 50

From Michael B. Griggs, R:

Over the past 12 months in North Kona, 33 fee simple homes sold priced at $200,000 or less. This week, one of the last two remaining fee simple listings in that price range received an accepted offer (there are also 2 leasehold listings on the market). This is just another indicator of the active and ever-tightening affordable end of our West Hawaii real estate market.

View North Kona homes priced at $200,000 or less

Other signs in the April data include a modest increase in the median price of residential homes (priced under $4M) for the second report in a row. With 245 active listings, North Kona residential inventory is at new low on report day (today 243). Overall, Big Island residential inventory is at new low and sales are up nicely from a year ago.

View all North Kona residential listings priced to $4M

Most of the recent Kona residential inventory reduction is due to expired or withdrawn listings following the winter season, but it still leaves us with a dramatic change in inventory levels from a year ago.

In terms of availability of affordable inventory, it appears that the Big Island real estate market could greet the often-discussed possible wave of new distressed properties with open arms. This will be something that the Griggs Report statistics will track closely as we move into the summer months. Currently, however, data indicates a declining trend in distressed properties on the MLS and a sharp decline in REO inventory around the island.

View North Kona foreclosure listings | View North Kona short sale listings

DQNews.com comments on page 5 of the report indicate very positive activity in the California market, a significant indicator for future trends on the Big Island.

The Griggs Report is published monthly by Michael B Griggs, R of Clark Realty’s Kailua-Kona office. To view the full report, download the Griggs Report – April 30, 2012.

*Pending Ratio is the ratio of listings in escrow (pending sales) compared to the number active listings for sale multiplied by 100. The Pending Ratio can be used as measure of the demand versus supply dynamic in the market place. The higher the ratio the stronger the demand versus supply balance.

Big Island RE snapshot – March 2012 – Residential sales: 157. Low price: $40K (Tiki Gardens). High: $6,950,000 (Kukio). Median: $215,000

— Clark Realty Corp. (@ClarkRealty) April 5, 2012

Don’t tweet? Here’s the March sales data we shared, with a few added details:

March 2012 Big Island Residential Sales: 157
(March 2011:  167, March 2010:  132)

Low:  $40,000  -  Tiki Gardens, Puna
High:  $6,950,000  -  Kukio, North Kona
Median:  $215,000

March 2012 Big Island Fee-simple Condo Sales: 50
(March 2011:  74, March 2010:  45)

Low:  $65,100  -  Kona Coffee Villas, North Kona
High:  $4,700,000  -  Estate Villas at Hualalai, North Kona
Median:  $320,000

March 2012 Big Island Land Sales: 88
(March 2011:  118, March 2010:  88)

Low:  $4,500  -  Nanawale Estates, Puna
High:  $3,750,000  -  North Kona
Median:  $26,750

We’ll be posting more about Big Island market activity for the first three months of 2012 soon. In the meantime, if you have questions about a specific district or community, please contact an agent in one of our five Big Island offices.

Click image to view the full Hawai'i Association of REALTORS® Statewide Housing Data 2011 report

At the end of December, Linda West of our Waimea office provided us with a recap of North Hilo real estate sales for 2011. A few of our agents from around the island are working on similar updates for the Big Island markets where they live and work. As we wait for their reports to come in, those interested in a statewide perspective on Hawaii’s real estate market may find this report (published recently by the Hawai’i Association of REALTORS®) useful. The report includes statistics for Hawaii as well as a breakdown of single-family home and condo sales for Hawaii Island, Kauai, Maui and Oahu. You can also view monthly data on the Title Guaranty website — click here to view December 2011 data.

Residential Sales in North Kona

Search North Kona homes for sale | Search North Kona land for sale

Single-family home sales in North Kona have increased by 12% over the past 12 months. The total number of closed escrows for North Kona homes priced under $4M from November 2010 to November 2011 was 431, a great improvement from the low of 204 homes sold in 12 month period from May 2008 to May 2009. The improved demand and decline in inventory appears to have caused median home prices to level off in the $369,000 – $370,000 range since August.

Condo Sales in North Kona

Search North Kona condos for sale

Condo sales in North Kona have increased by 6% over the past 12 months. The total number of closed escrows for North Kona condos priced under $1.5M from November 2010 to November 2011 was 320. This is a great improvement from the low of 143 condos sold in 12 month period September 2008 to September 2009. The improved demand and decline in inventory appears to have caused median condo prices to level off in the $167,000 – $168,000 range since August.

Trend to Watch: Pending Ratio – North Kona Condos

One of the indicators used in the Griggs Report to track the strength of the North Kona real estate market is the Pending Ratio (see below). The North Kona condo Pending Ratio has been steadily improving since August, a clear trend based on a decrease in inventory and increase in escrow activity. The Pending Ratio for North Kona condos has risen 38% from a year ago.

Pending Ratio is the ratio of listings in escrow (pending sales) compared to the number active listing/lots for sale multiplied by 100. The Pending Ratio can be used as measure of the demand versus supply dynamic in the market place. The higher the ratio the stronger the demand versus supply balance. Eventually, this will reach the point where prices rise again.

For more information about Big Island real estate trends or available listings in West Hawaii, please contact me via email or by phone at 808.936.8134.

-- Hawaii house prices and U.S. and Japanese net worth -- Click to view full article and additional charts from FRBSF

In the December 19, 2011 edition of the Federal Reserve Bank of San Francisco’s Economic Letters, FRBSF senior economist John Krainer and professor of economics and finance James A. Wilcox use the Hawaii real estate market to examine whether “demand from specific identifiable groups of buyers better explains house prices in a large, but circumscribed market.”

Their research explores the relationship between economic conditions in Japan and the United States and the number of homes purchased by Japanese and U.S. mainland residents. The report includes an interesting look at housing price movement compared to visitors to Hawaii during the time periods under consideration. Click here to read the full report.

Note: months’ supply is determined by dividing the number of homes or condos sold in a month by the total current number of active listings.

Residential Inventory — North Kona

The chart above shows North Kona’s residential median price leveling off as the number of months’ supply of homes continues to decline in this West Hawaii district. The residential median price has been fairly stable for the past 3 months. For homes priced up to $4M, supply is 8 months. For the price range up to $500,000, supply is less than 4 1/2 months. According to the NAR, the national average in October was 8.5 months. In North Kona, the current inventory level is down 46% from peak levels of early 2009.

Price decline has clearly driven the shrinkage in supply in the North Kona residential market. For reference, a 6-month supply level is widely considered the point of stable prices and an under-3 month supply is the level that causes price increase. There are currently only 262 North Kona homes listed for sale under $4M.

Condo Inventory — North Kona

The North Kona condo inventory is really the story in this report. The condo inventory is down 59% from peak levels of early 2007. The inventory in the price range to $1.5M is down to 180 units (a 7-month supply). In the price range up to $500,000 the supply is at 6 months. There are currently 214 condos for sale in North Kona (including “detached condominiums” in the resort areas). The number of pending sales is the same as last year but inventory is down 16%. The North Kona condo median price continues to show very slight decline.

For more information about trends in other areas of the Big Island, download the full report by clicking the link at the top of this post. Or, please email me to be added to the Griggs Report monthly mailing list.

Big Island Real Estate Market Trends Summary – September 2011

Year-over-year improvement in market demand versus supply is apparent in all categories — homes, condos and land — with the exception of a slight fallback in Kona’s under-$400K residential market (see summary below Table 6 at the top of page 3 in the full report).

Single-family residential, condo and land sales are up year-over-year while inventory continues to decline. Land is now showing the biggest increase in sales. It is nice to see land back on the radar screen. The following chart outlines land sales trends in North Kona.

North Kona Land Sales Trends:  September 2002 – 2011

North Kona September land sales 2002-2011. Adapted from The Griggs Report, September 2011.

The Kona land sales numbers above are the number of lots priced at $1.50M and below that sold in a 12 month period as of the report date. Sales hit a low in September 2009. Last year, that number moved into the 50s and currently we have 73 sales for 2011. From a buyer’s perspective, land prices coupled with decreased construction costs are now becoming competitive with what is available in newer residential construction.

Seasonal Shifts in Pending Ratio

Michael B. Griggs R

On the bottom of page 2 of the full report there is a chart showing the Pending Ratio trend for the Big Island.

The Pending Ratio is the ratio of listings in escrow (pending sales) compared to the number active listing/lots for sale multiplied by 100. The Pending Ratio can be used as measure of the demand versus supply dynamic in the market place. The higher the ratio the stronger the demand versus supply balance. Eventually, this will reach the point where prices rise again.

An example using the Kona land market data:

In 2009, there were 12 escrows and 285 lots for sale (Pending Ratio= 4.21). Currently, we have 12 lots in escrow and the inventory is down to 172 active land listings (Pending Ratio= 6.98). This is still a market with quite an oversupply, but it is changing. So far, the data has consistently shown this gradual improving market trend.

In July, a very distinct change began between the indicated market strength on the West side of the Big Island (increasing ratio) compared to a mirror image showing decline on the East side. This is due, in part, to a normal seasonal slowdown on the East side. The effects of tighter financing and appraisal rules as well as continued stresses on the East Hawaii job market are likely also contributing factors.

Please email me to be added to the Griggs Report monthly mailing list.

Near Ninole on the Big Island of Hawaii's Hamakua Coast

Wes Davidson, R(S)

The Hamakua Coast of Hawaii’s Big Island offers some of the most fertile land and beautiful views on the entire island. Hamakua is the “Green Coast,” where plant life thrives and waterfalls abound. Parcels of over five acres are readily available for home construction, agricultural use (planting or pastureland), or simply for investment in what may be the next “hot area” in the islands as a cadre of baby boomers begin to retire and look for more favorable climates in which to live.

If your Big Island real estate search brings you to Hawaii’s Hamakua Coast, I can help you find the parcel of land that meets your criteria and assist you through the entire purchase process. Please contact me if you would like a complete listing of all available sites along the Hamakua Coast or let me know how I can be of help with your property search.

New Hamakua Coast Listings (from 6/1/2011)

New listings of undeveloped land for sale above five acres in size:

Hamakua Coast Price Changes (from 6/1/2011)

Price reductions for undeveloped land above five acres:

Hamakua Coast Sold Properties (from 6/1/2011)

Sold listings of undeveloped land above five acres: 

Frank Goodale, R, CRB

On July 20, 2011, the following was posted on Realtor.org:

June Existing-Home Sales Slip on Contract Cancellations, but Prices Stabilize

Existing-home sales eased in June as contract cancellations spiked unexpectedly, although prices were up slightly, according to the National Association of Realtors®. 

Sales gains in the Midwest and South were offset by declines in the Northeast and West. Single-family home sales were stable while the condo sector weakened.

On July 28, this article was posted on the Wall Street Journal’s Developments blog :

Behind the Numbers: Pending Home Sales Rise

This week’s reports on the housing market have been decidedly mixed.

On Tuesday, the government said new home sales were down 1% on a monthly basis in June. Also that day, the S&P/Case-Shiller index of home prices in 20 major U.S. cities was down 4.5% in May from a year earlier.

But today’s news was positive and unexpected: The National Association of Realtors’ seasonally adjusted index for pending sales of existing homes rose 2.4% on a monthly basis to a reading of 90.9 in June. Economists had forecast a 2% drop.

A Closer Look at A Complex Data Set

On July 22, 2010 the National Association of Realtors reported that existing home sales for the month of June (on a same month comparison with 2009) rose 9.8%.  In that report, it was noted that the First Time Home Buyer Tax Credit had produced “uncharacteristic but understandable swings as buyers responded to the tax credit.” NAR’s Lawrence Yun went on to note that he expected the impact from the tax credit to continue for an additional two months.

One year later, we are measuring our current environment against these “uncharacteristic but understandable swings.” However, it is common for an artificially induced distortion in the marketplace to set off a wave of activity that first rises above the average and then receeds below the average. Statistical waves — just like ocean waves — do not just disappear. They nearly always reappear (and quite often one year later). A nearly identical scenario was repeated with the car rebates. Most economists understand this but occasionally it gets overlooked in the news. Reporters who do their job well understand that it is instructive to factor into their commentary this predictable behavior of markets.

That being said, the numbers published in the recent reports mentioned in the articles above do raise legitimate questions about any predictions based on an artificially induced stimulus and may explain the more recent pessimism in the marketplace. Yet, on the optimistic side, we are once again likely close to the bottom of the current real estate wave which, as those of us who live in Hawaii know, is a great place to set yourself up for the next one coming in.

Kulalani #406 – MLS 244145 – Tuesday (6/28), Wednesday (6/29), Thursday (6/30) from 1 pm to 5 pm
Ka Milo #125 – MLS 246268 – Thursday (6/30), Friday (7/1), Saturday (7/2) from 10 am to 5 pm

Three new residences are currently under construction in Ka Milo at Mauna Lani Resort

If you drive around the Mauna Lani Resort on the Big Island’s Kohala Coast these days you can see evidence of an increase in the pace of recent and current new construction, especially in newest subdivisions including Ka Milo and Kulalani.

Kulalani

Kulalani seems quiet now that they have successfully finished their first phase of construction. Nevertheless, plans are brewing to break ground on the new phase of multi-plex condo toward the end of this year. For those interested in resort-style living on Mauna Lani’s North Course, one townhome is currently on the market in Kulalani. Recently listed, MLS 244145 is turnkey furnished and has an excellent golf course view.

Ka Milo at Mauna Lani

Rachel T Mohammadi, R(S)

In Ka Milo, three homes are under construction on the golf course. The first to be complete will be ready by September and the others by next Spring (the developer currently has two of these units listed for sale in the MLS – see MLS 244318 and MLS 241420 for photos and details).

There are currently two completed homes for sale in Ka Milo. One is a “paired” home located on Mauna Lani’s North Course: MLS 246268 is a well-appointed new listing that offers a sense of privacy. The other available listing is MLS 242401, an elegant single standing home with ocean views. Both homes offer all the benefits of resort ownership, including Mauna Lani’s Advantage Program.

If I can answer questions about any of these or other Kohala Coast resort listings for you, please contact me for more information.