Condos are still hot, hot, hot in North Kona and South Kohala with condo prices increasing 13.85% year over year and 5.70% since the beginning of 2019 to $370,000 up from $325,000 last year according to the Hawaii Information Service.
The number of sales of condos in North Kona increased 15.69% year over year with 51 closed sales in 2018 and 59 in 2019. South Kohala saw a 3.82% increase in the median price from January to April, 2019, although down 1.5% year over year. The median price for condos was $549,500 in April 2018 and $541,160 in April 2019. The number of condos sold rose from 35 closed sales in April 2018 to 40 closed sales in April 2019.
Lance Owens, LUVA Real Estate and past President of the West Hawaii Association of Realtors, explained that once the median price for single family homes went over $600,000, people started looking to buy a condo instead. His past experience shows that once the price of a mortgage to include HOA fees becomes comparable to owning a single family home, either people will head back into the single family home market or move further north and south of West Hawaii to find less expensive homes.
The number of sales for the single family home market only rose 2.17% year to year with 46 homes changing hands last year and 47 this year. 168 total homes sold from January to April in 2018, compared to 174 this year, a slight 3.57% increase year to date in North Kona. Prices decreased to $649,000 year to date in North Kona. In South Kohala, the median price of single-family homes rose to $650,000 compared to $600,000 in April 2018. However, the sales price has dropped 2.56% year to date compared to last year.
“There is more inventory coming onto the market right now, which causes prices to drop as buyers negotiate with sellers on listing price”, Owens stated. Owens mentioned that the economic pundits have pushed out their forecast for a slowdown in the economy or a coming recession to put a damper on housing prices. However, with unemployment at the lowest level in 50 years, inflation is coming and with it higher interest rates.
So, trying to wait until prices come down while the cost of money rises may not be a good long-term strategy. Pricing strategy is key in this market right now, so if you are considering selling your home, please contact LUVA Real Estate to provide expert advice on a winning sales strategy. If you are considering buying a home, we can provide you information about what is available on the market and help you negotiate with local sellers.