Neighbor island home prices continue climbing
While the pace of home sales went down substantially last month in many neighbor island markets, for the most part prices continued to rise as the formerly tumultuous housing market stabilizes.
The start of the New Year saw a continued lag in Kauai's housing market. The pace of house sales declined 34 percent, with as few as 35 homes changing hands, according to Hawaii Information Service data released yesterday. However, sales of condominiums grew 32.5 percent: Buyers purchased 53 condominiums compared to the year-ago 40 as more people were priced out of houses.
Home prices on Kauai, like on other islands, shot up last month. More than half of the buyers on the Garden Isle paid more than $650,000 to purchase a house last month. That's a 30 percent increase from the previous year's $500,000.
"It's more of a realistic market, which ties in with the national vibe of people buying hybrids not hummers," said Jimmy Johnson, broker in charge at Re/Max's Kauai Princeville Resort Office. "The euphoria is gone."
Almost every category of Kauai's residential real estate has changed into a buyer's market, Johnson said.
"If a property is priced correctly or perceived as a good value, the phone will ring off the hook," he said. "But if a property is overpriced no one will look at it: There are too many other available properties."
While seller's cannot command the "dream on" prices of the past, Kauai's home values are still strong, with most properties selling near the asking price, Johnson said.
Despite the market swing, Kauai real estate is expected to stay strong and healthy, he said. In response to continued demand, Re/Max will open its third office in Kapaa this summer, Johnson said.
On the Big Island, the number of single-family home and condominium sales dropped last month. Single-family home sales fell 25.3 percent to 142 in January, while condominium sales fell 31.5 percent to 61.
Median sales prices on the Big Island showed strong overall increases last month as second-home buyers continued to flood the island, where prices in most districts are still lower than on the other major islands.
Although prices are still rising on the Big Island, they have begun to level off, forming a more stable market, said Paula Beamer, a Realtor with Parker Ranch Realty.
The median price paid for a single-family home on the Big Island in January was $392,450, an increase of 11 percent from the year-earlier $353,250. More than half of Big Island condominium buyers paid $425,000 for their purchase, a 30.8 percent jump from year-ago median.
"We saw home prices rise 30 percent last year, but we're probably going to see some leveling off in the market this year," Beamer said.
Buyers looking for Big Island properties aren't showing the frenzy of the previous year's market, she said.
"A lot of our buyers come from the mainland and live in markets that are slowing down," Beamer said. "Buyers aren't showing nearly the hysteria they did last year. They aren't in such a great hurry to put an offer on the table."
Home values haven't dropped as a result of the change in the market, but returns on investment aren't strong enough to support the speculation that was going on in 2005, she said.
"We've lost the flippers," Beamer said. "These days, it's difficult to buy a property and see the value double in a matter of months."