The national real estate market is softening, a trend that started in the summer, due to factors including rising interest rates and salaries not keeping up with the pace of a hot housing market. Now, as we enter the fall, markets around the country are seeing sellers dropping prices and West Hawaii is experiencing a slow down in the single home market with a 45% decrease year or year for homes in North Kona, according to data from the Hawaii Information Service.
Home sales dipped from 53 last October to 29 this year. In South Kohala, home sales dropped 24% from October 2017 from 25 last year to 19 this year. Home prices dropped 10% in North Kona year over year from $645,000 to $580,000, and dropped 4.61% in South Kohala from $608,000 last October to $580,000 this year. However, condo sales in North Kona have risen 5.13% year over year with 41 sales this year vs 39 last October. The median price of a condo in October 2017 was $265,000 and the median price jumped 18.87% to $315,000 this year. The reason for the jump in sales could be tied to the fact that once the single family housing market is deemed out of reach by home buyers, they tend to head towards condos.
In South Kohala, the interest in condos was even higher with a 33% jump in the median price year over year from $381,000 last year to $508,500 this year. However, with fewer sales, higher priced condos being sold could skew the numbers higher. The slow down in home sales is island wide with an overall decrease of 12% for the median home price and 33% in sales volume and 22% in number of sales year over year for October. Year to date, overall residential sales price is up 1.79% and in Kona, year to date prices are up .91%.
As homes sold in September closed in October, some may believe that the eruption is still having an effect on the housing market. With the Fed poised to raise interest rates again in December, now is a great time to get in and negotiate with sellers. And sellers, having a strategic game plan for pricing your home is very important right now. If you would like expert advice on how to navigate a softening market, please contact LUVA Real Estate today.