Prices Up, Inventory Dropping, and Trends Point to a Strong Market for 2014
The last few years have seen an uptick in sales price and volume in West Hawaii, which has been good news for the recovering housing market. The median price for a home on Hawaii Island, was $260.000 in 2012, and $295,000, a 13.4% increase year over year, according to the Hawaii Information Service, the local Multiple Listing Service.
In North Kona, the median price of a single family home in 2012 was $398,250 while in 2013 it reached $445,000, a 11.4% increase year over year. In South Kona, the median price was $325,000 in 2012 compared to 358,000 last year for a 10.15% increase. For condos, the price in North Kona was $189,500 in 2012 and $228,975 and in South Kona the median price in 2012 was $160,00 and dropped to $130,501 in 2013. South Kohala saw a 21% median price increase for single family homes from $340,00 to $412,000.
Prices in the North Kohala housing market dropped year over year from $455,000 in 2012 to $439,450 in 2013, a 3.4% dip. Puna was still a bargain last year, with a median price for a home at $166,000 an increase of 11.41% over 2012 when the median price was $149,000.
Vacant land in South Kona was a hit last year with prices rising 71% year over year from $72,750 t0 $125,000. In North Kohala, vacant land went up 14.42% from $250,000 to $286,000. Interesting to note, condos in Ka’u rose 71% year over year from $102,00 to $175,000.
In terms of sales volume, the island-wide sales volume rose 32.24%, showing a strong recovery across the whole island. Vacant land was also a hot commodity with sales volume at $302, 920, 834 in 2013 compared to $140,679,128 in 2012, a whopping 115% increase. In North Kona, sales volume for vacant land rose 142% year over year, a harbinger of future construction.
“Mortgage rates in 2013 have seen ups and downs closing on the rise in December. Rates hit bottom in the first half of the year in early May at 3.50%. It spiked thereafter in August up to 4.625% and has ticked down just a bit since then. It is highly unlikely that rates will hit low the low levels we have experienced in 2014. Buyers have adjusted to the rate increase, which still remains relatively low, and real estate prices will experience increases in 2014,” stated Ron Sato, owner of Point Financial in Kona
Lance Owens, Realtor, LUVA Real Estate said that the December market was weakened by the government shutdown, but felt over all 2013 was a great year for housing in Kona.
“We had a banner year in 2013, compared to the previous five years. Inventory has been steadily dropping as the market continues to improve, which will continue to impact prices in West Hawaii. While demand for housing remains as strong as ever, credit is tight, and flood insurance rates are on the rise”, Owens stated.