Isle resort home prices hit record
The average sales prices of new and existing homes in isle master-planned resorts reached a new high of $1.65 million during the first six months of this year, but sales are still lagging slightly behind, according to a resort residential market report released yesterday by real estate market researcher Ricky Cassiday.
Through the second quarter of this year, there were 1,780 home sales in resort areas, a decrease of 8.8 percent over the 1,951 sales that occurred during the same period last year. The average sales price during that period was up 23.5 percent from last year's average price of $1.33 million.
"Despite lower closer counts in 2006 for some markets, higher average prices are pushing gross revenues higher on all islands," Cassiday said, adding that this year's total market revenue should approach $3 billion.
While prices are up in Hawaii's resorts, Cassiday anticipates that market could see some degree of price deflation into the future, albeit at a much lesser degree than what many mainland markets such as Las Vegas and Miami already have experienced.
In Hawaii, resort residential prices have risen thanks to strong demand for individual properties; however, the rise in prices this year "is probably unsustainable, over the longer run, unless the financial markets settle down and buyer confidence returns," he said.
While demand for the lower end of Hawaii's resort market has dropped -- and moving forward sellers are likely to cut prices or increase incentives -- the market is "nowhere near as soft as some of the major developer areas on the mainland," Cassiday said.
Demand from baby boomers and foreign buyers is still hot, he said. While a weak dollar has kept some domestic travelers home, it has caused an uptick in foreign buyers from Canada, Russia, Japan and China, Cassiday said.