Big Island of Hawaii Real Estate Market Update Report

The Big Island real estate market is showing an improving number of residential home sales this year, while the land market remains fairly slow.  The Hawaii real estate market has been affected by the slower West Coast real estate market, so we have seen a shift to more local Hawaii Buyers, or those coming in from Oahu and Maui.  The recent recovery in the stock market, historically low interest rates, and the expanded Home Buyers Tax Credits has helped the Hawaii housing market.  Vacant land prices have been correcting as Investors and Spec home builders stopped buying land, while at the same time too many Sellers rushed in to try to cash out their profits, creating an oversupply of inventory – but we are now seeing Buyers beginning to come in to pick up some of the bargains.  The Kona condo market has also picked up as prices fell, while Buyers are seeming to pass over Hilo condos while they search for opportunities in lower priced Puna homes.  The long term economic outlook for the Big Island of Hawaii remains positive, especially in Hilo and Puna where there are new stores are under construction and a continuing expansion of the University of Hawaii.  The Buyer’s market in Hawaii should continue in 2010 and there are opportunities to be found for those ready to take advantage of the slower market.

Buyers are always looking for a "great deal".  Sale prices on the Big Island of Hawaii average about 90% to 95% of asking prices.  "Contingent Upon Sale",  "Low-Ball Offers" or "Trade for my Mainland Property" are rarely being accepted in our market.  Many of those who are buying properties today are planning for an early Hawaii retirement, first time Buyers, or for investment knowing that real estates market is cyclical.  Income Investors are finding Hawaii rental properties with cap rates averaging 4% to 5%.  Real estate inquiries from want-to-be residents continue to keep some of us Hawaii real estate agents quite busy, so we know the demand is there.  Some Buyers are still "waiting to see what happens" to our real estate prices or until they can sell there so they can buy here.  Those still waiting for an across the board "Crash" in Hawaii real estate, similar to that which hit California, Arizona and Florida, may be missing out on some nice opportunities.  Buyers who wait too long may find themselves asking, ”Why didn't I buy when it was a Buyer's market?!"

Sellers are saying "I didn't get as much as I wanted, and it took longer than I thought, but I sold!"  The number of sales are down from the highs of 2006 and 2007, yet we are still within our 10 year average.  If you bought before 2005 and thinking to sell today, chances are there is profit to be made.  It's worth it to put the property online if it is priced right.  It's the "Lets try 20% above the market price to see what happens" that disappoints Sellers when their property does not sell.

People's attitudes are beginning to improve about the direction of the economy and real estate markets.  This should help 2010 be a better year for Big Island Hawaii real estate sales.

... Just my opinion of the Big Island of Hawaii real estate market!