Kona-Kohala Coast Market Conditions
We are getting solid signals that the market is finding a foundation and starting to rebound.
Our Clark Realty in-house escrows have picked up noticeably in the last two months. Condo sales have turned around and are now showing increased sales activity. Further, interest rates, at least for now, remain near their lows of the last 40 years.
In my opinion, this is modest confirmation that we’ve hit bottom and are stabilizing. There are still some very good buying opportunities–with very favorable financing terms–for the astute, savvy buyer.
West Hawaii Listings
The available listings are still very stratified: about half are over-priced from the informed buyers perspective. 30% are priced reasonably in light of the current market but are average in their features. That leaves the remaining 10 to 20%–exceptional properties that are very well priced, either by motivated sellers or due to foreclosure situations.
Appraisal Warning
A current concern that some may not be aware of is that appraisals have become very tough. Value wise, they are based, in part, on very recent sales and foreclosures–aggressively priced properties that have been selling well, even in this difficult economy. To obtain an appraisal acceptable to a lender, serious sellers should be priced correctly based on the comparable homes that have sold in the last 3-6 months.
Granted, there are cash buyers in the market place; however, most purchases are not paid for in this way (see below). Sellers must be aware of the real risk of a deal falling apart at the eleventh hour because of the appraisal if the property is priced too high from the outset and the comps don’t support the Purchase Contract price.
First Quarter 2010 Residential Sales
North Kona: Total Residential Sales: 79 Cash Sales: 25
South Kona: Total Residential Sales: 9 Cash Sales: 3
This is a only brief snapshot of what is happening in the West Hawaii market. I’ll do a more detailed post in the next few weeks with a statistical view, so if you’re interested in this information about Big Island real estate and want to see that update, check back here soon or view my newsletter at LivinAloha.com.
