Hawaii Real Estate Blog

Waimea real estate market update big island hawaii

The Waimea housing market, a portion of the Big Island real estate market, remains soft in the most recent tracking periods, despite some signs of strength in the commercial sector. According to a July 16, 2010 report from Pacific Business News, “A lot of construction activity is going on at the Waiakea Village. A group that includes Michael Silva of Pahoa Village Café has taken over the commercial complex of the Waiakea Village property, which involves 16-plus buildings. The plan calls for converting part of the area to a restaurant row atmosphere with multiple restaurants, a grocery store, art gallery and other retail businesses. One of the first changes will be converting the Old Uncle Mickey’s into an upscale restaurant with a banquet room. Also, Paulo’s Italian restaurant in Pahoa will soon be opening in the old Topo Gigio location. The real estate development subsidiary of Safeway plans to build a shopping center on the 25.4 acres of state land by the old Hilo Airport. The property abuts Kanoelehua Avenue, Hualani Street and the main runway area of the Hilo International Airport. Plans call for 279,446 square feet of retail space anchored by a home-improvement center. The property was used by the military during World War II and has been vacant since 1947.”

However, Waimea homes for sale and condos for sale continue to be adversely affected by the amount of foreclosures in the market. An August 1, 2010 article from the Honolulu Star Advertiser stated that “The Hawaii foreclosure mess spreading through Hawaii’s housing market is hitting condo projects especially hard, contributing to depressed property values and forcing many associations to raise monthly maintenance fees…Although residential foreclosures represent only a fraction of Hawaii’s overall condo inventory, their numbers are growing and the fallout is causing major budget problems for many projects already facing steep increases in maintenance, utility, insurance and other bills, according to real estate professionals and condo owners. “I’ve never seen it this bad,” said Hawaii First Inc. President Richard Emery, who has been managing isle condo properties for more than 20 years. His company oversees nearly 200 projects statewide. The foreclosure crisis is especially worrisome, real estate officials say, because Hawaii has the highest concentration of homes in condo and community associations of any state in the country.”

Hawaii Housing real estate market update

The island state of Hawaii, with its beautiful beaches and tropical climate, is always near the top of the list for high real estate prices and large numbers of buyers interested in obtaining homes here. But the state was hit hard by the downturn in the U.S. housing market as investors began to doubt the value of owning real estate or property in a falling market. The Hawaii real estate market suffered universally as many mortgage-holders found themselves upside down on their mortgages, owing more money than their homes were even worth, and those who bought at high prices during the market’s boom suddenly saw the values of their investment crashing.

Though the Hawaii market has seen some overall improvements since late 2008 when the housing market downfall began, it remains highly volatile. As recently as the month of April, the Associated Press reported that there were more than 1,470 foreclosure notices, more than double the figure from a year earlier and enough to put foreclosures in Hawaii at a figure of one for every 387 households.

But every real estate market is local, and the lingering effects of the recession vary by region. The Maui market recently saw encouraging signs, with its median home sales price in June higher than figures from a year ago, a positive sign that the market may be turning. ABC reported that both Kauai and the Big Island were also showing signs of markets re-emerging over the summer.

The median price for homes sold in Hawaii County, or the Big Island, rose slightly in the second quarter of 2010 from the first quarter, though both of those figures stood below the figure for 2009′s Q4. Kona saw a healthy increase in its median price from the first to the second quarter of this year, rising by nearly $50,000.  The Pacific Business Journal reported that between January and June of this year, sales of existing single-family homes were up 32.5% on Oahu, 43% on Maui, 71.8% on Kauai and 45.8% on the Big Island. In addition, condo sales were up 46% on Oahu, 64% on Maui, 65.% on Kauai and 101.5% on the Big Island. Despite the uptick in sales activity, the median prices of Hawaii homes for sale still struggles. Only Oahu saw its median sales price increase over the six-month period, up a mere 2%. The other areas saw prices fall between 2% and 7%.

Kohala Coast real estate market update

The Kohala Coast real estate market, part of the larger Big Island real estate housing market, continues to face challenges heading into the second half of the fiscal year. Despite an increase in condo sales and an uptick in tourism activity, fewer Kohala Coast homes for sale were purchased and the median price for both categories declined. According to an August 10, 2010 report from Pacific Business News, “The Big Island of Hawaii saw eight more condominium sales this past July than in the same month last year, but saw drops in the volume of single-family home sales and median prices for both homes and condos during that time, according to the Hawaii Information Service. Last month’s 41 condo sales were 24 percent better than the same month last year, when 33 condos were sold. Single-family home sales dropped nearly 11 percent in July, going from 120 to 107. Both single-family homes and condos saw a slip in median prices this July. Homes sold at a median price of $244,500 — compared to last year’s $258,000 – while the median price for condos came in at $235,000 — $30,000 less than last July.”

The Kohala Coast real estate market should begin to improve along with the rest of the local economy, which has started to turn around along with the tourism sector. A July 28, 2010 piece also from the Pacific Business News found that “Visitors to Hawaii continue to arrive in greater numbers and spend more, the Hawaii Tourism Authority said Wednesday. In June the number of tourists hitting Hawaii shores rose 13.6 percent to 625,522 visitors compared to the same month last year. Total tourist spending in June rose 16.1 percent, or $131.7 million, to $948.9 million when compared to June 2009. Daily spending averaged $161 per person, up from $151 per person a year ago…The HTA statistics released Wednesday measure spending by visitors who arrive by air and do not factor in spending from cruise ship passengers. All islands saw heavier visitor traffic this June, with arrivals to Oahu increasing the most, 18.3 percentage points, or 390,206 total visitors. Oahu was followed by the Big Island, which saw an 8.9 percentage point increase, then Maui with a 5.9 percentage point jump and Kauai rounding out the major islands with a 5.8 percentage point gain over the previous June.”

Princeville real estate market update

The Princeville real estate market, a substantial portion of the Kauai real estate housing market, has been trending upwards in recent months following the bursting of the local bubble. Home sales on the Garden Isle increased substantially over the same time period last year, although it’s unclear how much of the market was artificially boosted by the expiring federal tax credit. According to a July 17, 2010 report from the Garden Island, “The housing bubble on Kaua‘i has popped, but not quite like it did in places such as Las Vegas or Phoenix where “they just ate it,” TZ Economics Principal Dr. Paul Brewbaker said at Thursday’s Kaua‘i Board of Realtors general membership meeting and educational forum…Kaua‘i experienced a burst more comparable to California than O‘ahu, according to Brewbaker. The island “does not seem to have an inventory overhang like most distressed Mainland markets,” he said. Home sales increased around 76 percent last month on Kaua‘i compared to June 2009, according to Multiple Listing Service. Meanwhile, median home values fell more than 1 percent, the statistics say…In June, there were 37 residential sales as opposed to 21 last year, according to MLS statistics. And the median value of homes last month was $405,000 compared to $410,000 in June 2009. Similar statistics were reported for the number of sales during the second quarter, according to MLS. A more than 71 percent increase in sales was recorded in 2010 compared to last year and median home values slipped some 10 percent.”

Princeville homes for sale should see improvement upon the recovery of the Hawaii real estate housing market. Although the state is seeing growth overall, the neighbor islands including Kauai are lagging behind somewhat. According to a July 21, 2010 article from the Honolulu Star Advertiser, “June marked the third consecutive decline in the state’s unemployment rate, which peaked at 7 percent last summer. In Hawaii, the statewide average was pulled down by the relative strength of the Oahu job market, where the unemployment rate was 5.8 percent. Hawaii County led the state with a 10.4 percent unemployment rate, followed by Kauai County at 9.1 percent and Maui County at 8.5 percent. The county jobless rates are not seasonally adjusted.”

Mililani real estate market update

The positive news for Mililani homes for sale was somewhat dampened by simultaneous news of sharply increased rates of foreclosure. Higher rates of foreclosures on the island of Oahu, which stand in stark contrast to the trends seen in the rest of the nation, are a testament to the continued effect of the economic recession on the islands. According to a July 29, 2010 article from the Honolulu Star Advertiser, “Home foreclosures in Honolulu shot up more than 70 percent during the first half of this year even as foreclosure rates began abating in the hardest-hit cities on the mainland, according to report released today. A total of 2,784 Honolulu homeowners received a foreclosure filing between January and the end of June, up 72.3 percent from the first half of 2009, according to the report from real estate research firm RealtyTrac. There was one foreclosure filing for every 121 homes in Honolulu, the 112th highest ratio out of 204 cities surveyed by RealtyTrac…Nationally, foreclosure rates rose in 75 percent of the 204 cities surveyed. However, in nine of the 10 metro areas with the highest foreclosure rates — including Las Vegas and several cities in Southern California — the foreclosure rate dropped. Las Vegas, which led the nation with one foreclosure for every 15 homes, saw its overall foreclosure rate drop by 9 percent during the first half of the year from the same period in 2009. In Riverside, Calif., where one out of 23 homes is in foreclosure, the rate dropped by 23 percent.”

This negative news for the Mililani real estate market was echoed by a July 30, 2010 report from Credit.com. The piece noted that “In Honolulu, the official unemployment rate was 5.8 percent in June, a relatively low figure compared to other cities around the country. However, the number doesn’t include those who are forced into part-time jobs or have become so discouraged that they’ve stopped looking for work. When they are added in, the rate rises to 15.8 percent. Economists estimate Hawaii has lost about 40,000 jobs, or about 6 percent of the total, since the recession started in late 2007. And a complete recovery in the job market is not even on the radar screen yet. The state Department of Business, Economic Development and Tourism, which makes projections only three years out, expects wage and salary jobs to total 609,400 in 2013, still well below the 2007 peak.”

Kahala real estate market update

The Kahala real estate market, part of the larger Oahu and Honolulu housing markets, faced mixed signals in the most recent tracking periods, with some experts emphasizing problematic indicators and others pointing towards more consistent performance. According to an August 9, 2010 article from Pacific Business News, “July home sales on Oahu were down slightly compared to the same month last year, according to the Honolulu Board of Realtors. A total of 268 single-family homes were sold last month, essentially flat when compared to the 266 homes sold during the same month last year. Waikiki condos, by contrast, saw a sizable drop, going from 320 units sold in July after a total of 343 units were sold during the same month last year, according to Realtor data. July’s decline was even greater when compared to June results. July’s totals for single-family home sales were off 8.5 percent, and condo sales were down 21 percent, Realtor data revealed. Sales prices for July were basically flat when compared to last year. The median price for single-family home sales was $605,000, up 1.7 percent from the selling price of $595,000 in July 2009. The median price for condos was $299,000, down 2.7 percent from the median price of $307,250 in July 2009, the board of Realtors reported. Single-family home prices were down 4.3 percent from June’s median price, while condo prices were down less than 1 percent during the same period.”

The number of Kahala homes for sale that were actually purchased increased somewhat in the month of July, but the figures were somewhat disappointing compared to expectations spurred by the federal tax credit. An August 9, 2010 report from Hawaii News Now stated that “Realtors across Hawaii reported generally strong home sales and prices on deals that closed in July, if not the much-improved market they hoped would be spurred by low mortgage rates. Oahu saw 268 July home sales (up from 266 a year ago) for a median price of $605,000 (up from $595,000) while buyers closed on 320 condo sales (down from 343 a year ago) for a median $299,000 (down from $307,250), the Honolulu Board of Realtors reported Monday.”

Hilo housing real estate market

The Hilo real estate market, a subsidiary of the Big island housing market, saw mixed signs in the month of June. Although the number of home sales increased dramatically in the most recent tracking period, the median sales price crashed over the same time. According to a July 10, 2010 report from the Honolulu Star Advertiser, “Sales of homes on the Big Island and Kauai were strong in June, but prices were weak. The number of sales climbed more than 50 percent on both islands, but median prices were flat or down, according to sales data compiled by Hawaii Information Service and released yesterday. The biggest sales gain occurred in the Big Island’s condominium market, where transactions soared 89 percent to 53 last month from 28 in the same month last year. The median price was down 30 percent to $210,000 from $299,450. The median is a point at which half the sales are for more and half for less, which means the figure can be swayed by the mix of homes sold, especially when the number of sales involved is relatively small. Single-family home sales on the Big Island rose 56 percent to 161 last month from 103 a year earlier. The median price was up 2 percent to $285,000 from $280,000.”

The Hawaii real estate market also includes a commercial sector, which has seen some drastic changes recently. For example, a number of Hawaii mall properties have switched hands lately, including one on the Big Island. According to a July 12, 2010 report from KITV News, “General Growth Properties Inc. on Monday announced it has turned the management and leasing of 18 of its malls to Jones Lang LaSalle in a deal that includes three Hawaii properties. The change affects the Hawaii malls Kings’ Shops in Waikoloa on the Big Island, Queen Kaahumanu Center in Kahului on Maui and Windward Mall in Kaneohe on Oahu. GGP still retains control of Honolulu’s Ala Moana Center and Ward Centers, Prince Kuhio Plaza in Hilo and Whalers Village in Lahaina. General Growth owns more than 200 malls in 43 states. It has been under Chapter 11 bankruptcy reorganization. Jones Lang LaSalle is a financial firm that specializes in real estate from retail space to residential. About 200 employees who work in management teams at the 18 properties plus 30 corporate employees who provide services to the properties will become Jones Lang LaSalle employees, GGP said.”

Kona housing real estate market

The Kona real estate market, part of the larger Hawaii real estate housing market, showed strong signs of improvement in the most recent tracking period. Both condos and homes sold more units in the month of June, while the median price for single-family houses increased slightly over the same period. This might have been a reflection of overall improvement in the economy, or partially as a result of the recently expired federal tax credit. According to a July 9, 2010 report from Pacific Business News, “Single-family home and condominium sales increased sharply in June on the Big Island of Hawaii compared to the same month last year, but median prices for condos were down. The 161 single-family homes sold last month were 56.3 percent higher than the 103 sold last year, according to Hawaii Information Service. The median price in June was $285,000, 1.8 percent higher than a year ago. Condominium sales almost doubled to 53 last month from 28 a year ago. But the median price of $210,000 was 29.9 percent lower than last year, when it was $299,450.” The local economy also benefited from an uptick in tourism, as discretionary spending gradually recovered in recent months.

The increased number of Kona homes for sale that were purchased in the month of June may have been boosted by a decrease in bankruptcies. According to a July 12, 2010 article from Pacific Business News, “Hawaii’s initial unemployment claims decreased by 6.3 percent in the past week. The Department of Business, Economic Development and Tourism released a report Thursday showing that a total of 2,699 claims were filed statewide in the past week, compared to 2,879 during the same week in 2009. Oahu topped the state with 69 new claims filed, bringing its total to 1,562 so far this week, an increase of 4.6 percent compared to last year…Maui and the Big Island of Hawaii both saw decreases in filings for the week. Maui was down to 370 claims last week compared to 547 claims filed during the same week last year, a decrease of 32.4 percent. The Big Island had 103 fewer claims this week than it had a year ago, bringing its total for the week to 500, a decrease of 17.1 percent from the same week last year.”

Makena real estate housing market

The Makena housing market, along with the rest of the Maui real estate market, began to show signs of improvement after several consecutive months of severe losses and declines. According to a July 8, 2010 report from the Lahaina News, “While median prices may have slipped slightly, the report indicated that average prices for both homes and condominiums are following upward trends, with condo sales in particular steadily increasing, although median prices have declined. And while the total number of sales in Maui County may fall into the less-than-desirable range for sellers and their agents, it is still up nearly 72 percent compared to sales in May of 2009—certainly an encouraging sign. Residential sales in the first five months of the year “held strong,” with 81 homes sold and 104 condo units sold. May’s median sale prices were $442,000 for homes, $412,500 for condos and $547,500 for vacant lots of land, according to the report. Best of all, and perhaps most appealing to potential homebuyers, the report said, “Interest rates are remaining near historic record lows, which may help motivate would-be buyers to go ahead and buy.” The RAM report also noted that, as of May 2010, land sales had risen to 16 lots. This is not only welcome news to sellers and buyers, but also to land developers, architects, contractors and construction workers, who have also felt the pinch of the vulnerable housing market.”

The report by Sarah Ruppenthal went on to note that brokers are pursuing creative avenues to sell Makena homes for sale. It stated that “Despite the odds stacked against them, many developers have found creative ways to jumpstart Maui’s weakened housing and construction industries. For instance, Pe‘ahi Farms, which sits atop 130-foot cliffs along the picturesque North Shore coastline, has 15 vacant farm estate lots for sale. Last week, Pe‘ahi Farms’ project owners announced a sales incentive plan extended to potential homebuilders throughout 2010. The plan, which is designed “to get the real estate market ball rolling,” offers a significant price reduction that will allow up to six homeowners a substantial lot discount if they are prepared to start the building process. The SMA process is complete for the entire project; therefore, project owners said, the lots are ready-to-build.”

Lahaina housing real estate market

The Lahaina real estate market, a major component of the larger Maui housing market, is showing signs of a possible recovery despite a slower than expected rate of recovery nationwide. A July 13, 2010 report from Hawaii News Now noted that “Buyers closed on 77 home sales and 105 condo sales in June, amid some indications of a modest pricing rebound. The median home price, $499,000, was $57,000 more than May and $4,000 higher even than year-ago prices. There were 25 home sales on the central plain, 10 in Kihei, seven in Pukalani, seven in Lahaina, and the rest scattered around Maui. (Neither Molokai nor Lanai saw any home sales go to closing in June.) The condo median was $430,000, up $20,000 from May but still $39,000 below year-ago levels. There was a wide variety of condo prices, with 25 condos selling on the Kaanapali Coast, most for more than $800,000, while 34 sold in Kihei, most for less than $300,000. “The market is starting to turn,” said Terry Tolman, chief staff executive for the Realtors Association of Maui, in a report to members. “Interest rates are remaining near historic lows.” Tolman sees the market as strong considering that short sales and bank sales are still moving through the pipeline – these can bring prices down – but warns that unrealistic sellers who price their properties too high are being ignored by prospective buyers. This wraps up the June round of home sales reports. Earlier reports from the Honolulu Board of Realtors and Hawaii Information Service (Kauai and the Big Island) also showed a resurgent housing market with more resilient home price values than on the mainland.”

The relative strength of Maui homes for sale is indicative of a larger trend in the Hawaii housing market. Along with the rest of the Valley Island and the Aloha State, the Lahaina real estate market remained stronger than the rest of the country, despite relatively high rates of foreclosure. It is unclear, however, exactly how much of the strength of the recovery is a result of the recently expired federal homebuyers tax credit.