Neighbor islands
post highest and
lowest home prices

A national study compares
the price of similar homes

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By Lyn Danninger
ldanninger@starbulletin.com

An average home has increased 8 percent in value across the nation since 2001, according to a new study by Coldwell Banker Real Estate Corp.

In Hawaii, both the most expensive and most affordable homes are on the neighbor islands.

The study averaged the sales prices of single-family homes with about 2,200 square feet, four bedrooms, 2.5 baths and a two-car garage.

The Big Island's Kailua-Kona posted the highest average price statewide at $725,000 -- a 36.2 percent jump in price from $532,500, the average price found in the same study conducted by Coldwell Banker in 2001.

Kihei, Maui, was deemed to be the most affordable area in the state, with homebuyers paying an average price of $379,250 for a home with the study's features. But unlike Kailua-Kona, 2002 values dropped 23 percent in Kihei from the previous year's $495,000, according the study.

In Honolulu, the average cost of a home was $449,250 a slight increase over last year's $442,250.

According to Ricky Cassiday, Prudential Locations researcher, the slight jump shown in Honolulu prices illustrates the local demand for owner-occupant homes. As such, it's a sharp contrast to the huge jump in price seen in Kailua-Kona, which has a strong second or retirement home demand coming from the mainland.

"Prices in the Kona area show just how much a little demand can go a long way in boosting average prices, especially when the buyers are affluent," Cassiday said.

Of the 317 markets across the country addressed by the study, 206, or about 65 percent, showed increases from 2001, and 114 of those were up more than 10 percent in value. The study differs from many real estate reports in using the average price rather than the median -- the mid-point between the highest and lowest price.

The study also found there was a wide variation of prices depending on location.

For example, the most expensive market in the nation is Palo Alto, Calif., where average sales price for a single family home was $1.26 million. By contrast, in the most affordable market in the U.S. -- Yankton, S.D. -- a buyer would pay an average price of $101,062.

The study showed that despite a slow U.S. economy, activity and figures on existing homes sales remained strong through the first half of the year with 5.75 million homes projected to be sold during the year.

Seven out of 10 of the country's most expensive markets were found in California. By contrast seven of the nation's 10 most affordable markets were found in the Midwest.

The average price of all homes surveyed nationally was $291,097, up from the previous year's $269,241.

Of all the markets surveyed, Idaho had the least price variance, with only a $3,200 difference between the most expensive and most affordable locations.

Local Coldwell Banker Managing Director, Scott McCormack noted that this year, Hawaii ranked number 51 in the study in terms of affordability -- a big change from years passed.

"In 1995, when we started to get this data, Hawaii was the seventh most expensive community in the country, in the early 1990s we probably ranked even higher," McCormack said. "So relative to the rest of the country, we are more affordable than we have been in years and it would explain why we have such strong demand in the market."

McCormack said the value of the study is its ability to compare what it would cost to buy a home with the same type of features in different markets.

"It's powerful from the standpoint in that it allows you to compare apples from market to market," he said.