Archive for February 2013

Waikoloa Village 4th Quarter Report   Leave a comment

Waikoloa Aloha.  It’s more than a month into what is starting off to be a very promising year for Hawaii Real Estate.  We are seeing through all sectors; land, homes and condos throughout the islands, multiple offers on prime listings that are of good quality and priced well.  Yet we still some properties languishing on the market as a result of functional deficiencies or improper pricing.   Farmers like to think of the spring and summer as growing season, but  Big island Real Estate Inventory has grown these winter months, although still lower than historic averages.   There are fewer distressed properties coming to the market due to improving economic conditions in Hawaii and our Act 48 that slows the foreclosure process.  Statistics also show a huge decrease in bankruptcy filings, another indication of improving conditions.

Winter inventory growth results from increased demand fueled by the higher number of visitors.  Snowbirds decide, often after many Island vacations, that  a tropical winter on the Big Island in a sunny home  beats -7 warming up to a high of 20 back home.   No longer can they resist making the dream of a winter home in the sun by the sea a reality.   It is also a time to find better quality inventory even if at higher prices.   Sellers with the luxury of time prefer to enter the market when higher demand will support their price.  It also becomes the sale season for many properties that have lingered on the market a while.  The benefit of higher inventory often conflicts with higher occupancy rates of the vacation rental properties offered for sale this time of year.  The income potential is a plus but most buyers want to inspect the property before buying.    In Waikoloa we have gone from a 4th quarter average of approximately 32 homes on the market to the New Year’s inventory of 42 homes on the market.  It looks like 1 in 4 sellers truly believe timing is everything.kpp_ViewBack2_WR

It is amazing to see that from the 3rd to the 4th quarter home prices in Waikoloa actually increased almost 12%.  We went from an average price of approximately $310,000 to approximately $347,000.   But we seem to have a problem with appraisers not taking the time to analyze these trends and giving low appraisals.  I was shocked by a low appraisal that stated “prices have remained stable with no increase” in the remarks.  The restrictions on appraisals as a result of laws passed a few years ago interjecting  3rd party appraisal ordering by non-affiliated entities  have the appraiser doing twice as much work for half the fee.  Many of the experienced appraisers left the industry resulting in inexperienced often part-time appraisers who save time by reusing their appraisal remarks.  They seem to be adjusting the comparable properties but making no analysis of market trends.  Further hampering the reality of this appreciation is a recent Bank practice of asking for second and thirds appraisals after receiving appraisals validating the sale price until a lower appraisal is received.  Once they have the low appraisal, the will not lend any more than that value.  Banks seem reluctant to loan the low interest money filling their vaults (forgetting their rescue subsidized by taxpayers), particularly the large mainland banks.  It lowers their profit margin. This is a national trend.  Locally we have returned to recommending buyers use only local lenders familiar with Hawaii market trends.  But as they say, “one day this too will pass!”  Still the low inventory will continue to push prices higher.  Click Here for Waikoloa Village Homes Report

Land prices have remained stable between quarters mostly due to a lack of quality inventory.  Don’t let that $140,000 sale fool you…it was actually for two lots.  Most of the better lots in Waikoloa have already been developed or continue to be held by owners waiting to build later.  Without expansion of Waikoloa, we will not see a lot of change to our Land market.  Click here for Waikoloa Village Land Report

The Waikoloa Village condo market continues this appreciation trend.   We ended the third quarter with an average condo price of $172,929 with 14 sales ranging in price from $70,000 to $512,000.  The last quarter saw only 5 sales ranging in price from $130,000 to $411,500 giving us an average of $226,500, a whopping 26.9% increase.  Does this illustrate the beauty of statistics or have higher prices slowed sales?  It does appear that fall is the condo season in Waikoloa Village.  At least it was in 2012.

Click here for Waikoloa Village Condo ReportOLYMPUS DIGITAL CAMERA

All in all, we are looking at an improving Real estate market in Waikoloa Village.  Let’s hope everything keeps getting rosier and the economy keeps moving in the right direction.   As always, call or email if you have any questions or need any information about Big Island Real estate.