|
Big Island looks Since the late 1990s, the story of Big Island real estate has been told by the growing number of luxury housing developments that dot the Kona-Kohala coastline.
to offset luxury focus
THE BIG ISLAND / HIGH-END HOMES DOMINATE
During the 1980s, property values on Oahu and parts of the neighbor islands shot sky high as wealthy speculators from Japan bought up real estate. As the decade closed, the Japanese bubble burst and property prices started to slide. Hawaii residents who bought homes as prices soared were trapped with real estate worth less than they had paid. But many neighborhoods are beginning to make a comeback. This is part five of a seven-day look at home prices and sales volume in the state of Hawaii.
By Lyn Danninger
ldanninger@starbulletin.comIt seemed everyone from young Silicon millionaires to retirees were looking for their own piece of Big Island paradise.
Westbound tourism, primarily from California, coupled with direct flights from the mainland to Kona, had a lot to do with the area's growing popularity.
From 1998 through 2001, the state's real estate recovery was led in large part by strong high-end sales along the Kona-Kohala coastline. This year, the pace continues. Except now, the activity is no longer confined to the high end of the market along the resort areas of the Kona coast. Housing sales on the Big Island are booming in many areas and in a variety of markets.
In Hilo, Realtors report declining inventory and a rental shortage.
"The rental market is tight right now. We see that as a result of more rentals on the market to be sold," said Ron Rigg, a real estate agent with Clark Realty in Hilo.
While prices for single-family homes have not significantly jumped, sales are moving briskly, he said.
Moreover, Rigg notes more people from the mainland are beginning to purchase homes in the Hilo area. He also sees more interest in condominiums as available single-family housing inventory dries up.The uptick in housing resales in the area has been a long time coming, Rigg said.
"We're finally catching up with what the rest of the islands have experienced," he said.
While not exactly a frenzy of resales and price jumps, the signs are there, Rigg said.
"In Hilo it never really spikes or dips," he said. "It just kinds of slowly builds up."
Year-to-date median resale prices for single-family homes in South Hilo have edged to $135,000 from $130,000 last year.
Similarly, in Waimea, a shortage of rental housing has been a problem for some time, said Penny Pagliari, a Realtor with Clark Realty's Waimea office. Moreover, few homes are for sale in the area.
But new projects are planned.
Schuler Homes started site work this month on the first phase of a new development in partnership with Parker Ranch. Its first phase will be 57 homes, said Mike Jones, president of Schuler Homes Hawaii division.
"The project targets the local buyer," he said.
Prices will range from the low- to upper-$200,000 range, he said. When the project is complete, there will be more than 300 homes.
In Kona, despite jobs and new businesses produced by the luxury boom along the Kona-Kohala coast, residents in middle and lower income brackets have found it increasingly difficult to find affordable housing, either to rent or to buy.
Developers concentrated where the demands and profits are -- on the high end of the market.
The rental housing crunch continues today, and houses coming up for sale have become increasingly scarce as bargain interest rates generate record sales, say local real estate agents.
Dave Neal, sales manager at Century 21 All Islands in Kona, said in the past few months it has become more difficult to locate available property. Moreover, more people are moving into the area, creating more competition for housing.
So far this year, the median resale price of single-family homes in North Kona grew 22 percent over last year, to $306,384.
For condominiums in the North Kona area, median year-to-date resales prices grew 8 percent to $170,000.
But the demand for some relief in low and middle price ranges should be helped with several new developments on the horizon.
Schuler Homes purchased land just above Kailua-Kona about five months ago. The company hopes to start building on 260 housing lots sometime in June or July, said Mike Jones, president of Schuler Homes Hawaii.
"We're hoping the first ones will be ready in the early part of 2003," he said.
Work was started on the subdivision, called Pualani Estates, about eight years ago by another developer but was put on hold as the state's economy worsened, Jones said.
Popular areas such as Keauhou, south of Kona, have also seen plenty of activity recently, said Clark Realty's Pagliari.
Pagliari believes many buyers are purchasing with the idea of retirement.
A number of medium-price condominium developments in various stages of construction along Kona's Alii Drive are also appealing to retirees and part-time residents.
Similarly, a condominium development at Hualalai village with units around $250,000 has been selling quickly, even though construction has yet to start.
In Waikoloa, two projects -- one underway and one planned -- will likely offer some opportunities in the lower end of the market.
A project called Kilohana Kai at Waikoloa is being developed by a partnership known as Clearly Waikoloa.
The vacant lots will be on the market later this year starting in the mid-$60,000 range. The initial phase will consist of 50 lots, but the company is considering offering single-family home and lot packages eventually, said Doug Belt, principal broker with Waikoloa's Big Island Realty.
Another development called Ilima Lani, a condominium conversion project in Waikoloa, is generating the most interest among local residents, especially first-time buyers, Belt said.
"The hottest project is Ilima Lani. It's condominium conversion from an existing building. The units have two bedrooms and averages $110,000 in price. Basically, it's for the first time buyer, has 100 percent financing and is quite a big project."
"It's been selling like hot cakes," he said.