Home prices in North Kona have leveled off, enjoying a three-month period of the highest median price since 2008. ADVERTISING Home prices in North Kona have leveled off, enjoying a three-month period of the highest median price since 2008. The
Home prices in North Kona have leveled off, enjoying a three-month period of the highest median price since 2008.
The steady hold at $550,000 since March has encouraged sellers to put their homes on the market. Active residential listings for North Kona stood at 217 in June, up 29 percent from the year previous.
“The price level has encouraged a lot of sellers who have been trying to sell for many years,” said Michael Griggs, a Kailua-Kona real estate agent who tracks and publishes sales information for West Hawaii.
However, the strengthening market — which has seen a steady increase in sales volume for the past six years — hasn’t really caused more buyers to jump into the market lately, Griggs said. Agents for the North Kona market processed $290 million in volume from June to the same month a year prior. That sheer volume of money handled has been on the rise since it bottomed out at $119 million in 2009. But the actual number of homes sold has changed little in the past three years, hovering between 428 and 458 sales each year.
A shrinkage in the under $400,000 category and an increase in sales of homes from $500,000 to $700,000 are the two most striking recent trends, said Griggs, an agent with Clark Realty Corp. The $500,000 to $700,000 homes comprised 29 percent of the market in 2015, up from 18 percent in the year prior. At the same time, the share of under $400,000 homes shrank from 25 percent to 14 percent.
Following the real estate market tumble almost a decade ago, buyers had a wide pick of distressed properties and a backlog of homes that weren’t moving. That’s no longer the case. There were only 11 active listings in the less than $400,000 range in June for North Kona. While there is a fairly constant trickle of older homes and former rentals finding their way onto the market, they are snapped up quickly. And opportunities to buy new at those prices just don’t exist because developers have a hard time building for anything less than $500,000, agents say.
Griggs believes the market is headed for another peak and factors like the the island’s high rate of population growth will help push prices up.
“We’ll be wishing we were back here in several years as the market heats up,” he said. “I think this will last for a bit yet.”
However, buyers seem less confident of that, and those placing their homes on the market recently have been overly optimistic in how they price their properties, he said.
Some sellers appear to be trying to price their homes for a future market rather than the current one, said Ron Aronson, principal broker for Kona Coast Realty Corp.
“I’ve noticed a lot of price corrections in the past couple of months,” said Aronson.
“The land market seems to be firming up a bit,” Aronson said. “You couldn’t give it away two years ago. Now, you can’t find much for under $200,000.”
Aronson said that homes priced fairly in the $550,000 and below range have been selling well.
Frank and Patrice Heller, owners of Pacific Rim Divers, were strategic in pricing their three-bedroom home so it would sell before the market climbs any higher than it is. That’s because the couple, which built their home in 2001, will be on the hunt for a larger parcel where they can build again and have room for horses and their business.
Their Aloha Kona Drive home — with a ground-level storage area, three baths, spare bedroom and kitchenette — is in escrow for $585,000. The property went on the market at the end of January and had an offer in April.
The Hellers priced just above what multiple agents told them the property was worth.
“This house worked out great for a business like ours, but its time to move on and get land and get our horses,” Frank Heller said, unloading oxygen tanks and other dive equipment in front of his garage Thursday.
The buyer is selling a home in California and is starting a new business here, so the house is a great fit for him, he said.
On the other hand, Patrice Keller said, “we have friends sitting on a $700,000 home, down from $900,000, and they still can’t sell it.”
The Hellers’ sale illustrates how closely the West Hawaii market is linked to trends on the mainland’s West Coast.
“The West Coast market drives our market here,” Grigg said. “They sell over there and they put money in over here.”
