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Neighbor isle home prices drop


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POSTED: Tuesday, July 07, 2009

The quest for short sales and foreclosure properties dominated real estate activity on the Big Island and Kauai last month and continued to drive property prices down in most categories.

Falling prices, which dropped 13.5 percent for single-family homes on the Big Island and 36 percent for single-family homes on Kauai, created more interest in the market.

“;Somebody who didn't jump in the pool just because everyone else was jumping now has a golden opportunity,”; said Howard Dinits, a Realtor with RE/MAX Maui, who also sells property on the Big Island. “;Never have we seen a market where you can buy a house so cheaply and get an interest rate for less than 6 percent.”;

The median price paid for a single-family home on the Big Island dropped $44,285 to $285,000, according to statistics released yesterday by Hawaii Information Service. However, the median price paid for a Big Island condominium rose 2.9 percent to $310,500.

In Puna, where Dinits sells the bulk of his properties, the median price paid for a single-family home had dropped to $163,000. While foreign activity has slowed with the Big Island's real estate market, Dinits said mainland investors from California, Alaska, the Pacific Northwest, New York and New Hampshire have re-entered the market.

“;Consumers are looking for deals,”; Dinits said. “;There is a lot of demand and a lot of competition in the $100,000 to $175,000 range. And, yes, these days, that will get you a house.”;

Dinits just sold a bank-owed property in Hawaiian Paradise Park, which has been plagued by distressed sales, for slightly more than $109,900, he said. That same property traded for $260,000 in 2006, Dinits said.

Prices also have dropped steeply on Kauai, said Phil Fudge, principal broker of Kauai Landmark Realtor.

The median price paid for a single-family home on Kauai dropped to $440,000, a $247,500 decline from the prior year, according to Hawaii Information Service. Similarly, the median price paid for a condominium on Kauai fell 46 percent to $375,000 from the year-prior $695,000.

“;We are seeing activity, and it seems like the short sales and the foreclosures are driving the market,”; Fudge said. “;Prices for properties that are not in short sale or foreclosure are being driven by the distressed market.”;

Fudge said Kauai's market has dropped so much that sellers are sometimes considering offers that fall more than $100,000 below the list price.

The market has fallen so much it's not unusual to see properties that sold for $750,000 a few years ago now listed for $559,000, he said.

“;Our market is down to 2004 levels for residential and 2003 levels for condos,”; Fudge said.

As a result, Fudge said the number of offshore investors coming to Kauai from the West Coast to view and purchase properties has begun to rise.

“;They've been looking for a while, but prices have finally fallen to a point that many are just now thinking that it's the time to act.”;

But even with bargain-hunters out in full force, single-family home and condominium sales on the Big Island and Kauai continued falling last month.

Single-family home sales on the Big Island fell 8.3 percent and condominium sales fell 12.5 percent, according to data from Hawaii Information Service. Likewise, single-family home sales fell 25 percent on Kauai, and condominium sales fell 37.5 percent.

 

Home sales

The median price and percentage change from the same month last year for homes sold on the Big Island and Kauai:

               

       

     

 

BIG ISLAND

        HOMES
       

                                                                                                                                                                                                               
June 2009$285,000
June 2008$329,285
Change-13.5%

       

       

CONDOS

       

                                                                                                                                                                                                               
June 2009$310,500
June 2008$301,702
Change+2.9%

       

       

       

KAUAI

        HOMES
       

                                                                                                                                                                                                               
June 2009$440,000
June 2008$687,500
Change-36.0%

       

       

CONDOS

       

                                                                                                                                                                                                               
June 2009$375,000
June 2008$695,000
Change-46.0%

       

       

Source: Hawaii Information Service