November 29, 2010
The Kona real estate market, one of the two major portions of the Hawaii Island housing market, has been suffering from a recent controversy regarding affordable housing. A planned affordable housing community with thousands of units has hit a roadblock, according to a November 5, 2010 article from the Honolulu Star Advertiser. The piece by Andrew Gomes noted that “A planned community with 2,330 homes initiated by the state to produce work-force housing on the Big Island is generating concerns and opposition that threaten to derail the project.The estimated $734 million master-planned community called Kamakana Villages at Keahuolu has been in the works for several years, and faces a key hearing today in Kona where the state Land Use Commission is expected to either stop or advance the project. Developer Forest City Hawaii LLC petitioned the LUC in September to reclassify the 272-acre site near Kailua-Kona from agricultural to urban use. But the former owner of the land has raised objections over the use of the site and whether impacts from increased traffic will sufficiently be mitigated. The Queen Liliuokalani Trust, which sold the project site and adjacent land to the state in 1992 under threat of condemnation, has raised its objections with Hawaii County officials, in arguments before the LUC and in a lawsuit filed recently to halt LUC proceedings.”
Statistics released by RealtyTrac seem to indicate that the negative influence of foreclosures on Kona homes for sale will not stop anytime soon. Across the state, and on Hawaii Island in particular, there were a considerable number of foreclosures in the third quarter of the year. According to an October 14, 2010 report from Pacific Business News, “The number of REOs more than doubled on the Big Island, which had 397 bank repossessions last quarter, compared to 160 a year ago. Kailua-Kona continues to lead in that county with the greatest number of foreclosure filings, and the greatest number of bank repossessions with 153, almost triple the amount it had in the third quarter of 2009.” The effect of the recent Bank of America automated foreclosure controversy is unclear, although in the end it will likely not stem the tide of distressed properties.