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Housing market brisk in third quarter

Big Island real estate sales this year have outstripped last year’s sales figures as the final quarter of 2017 begins.

According to Multiple Listing Service, or MLS, sales statistics, 4,114 property sales have been made on the Big Island in 2017 to date, a 6.5 percent increase from last year’s numbers. Of these sales, 1,865 of them were residential sales, 633 of which were made in the third quarter of the year.

“It’s been very positive,” said Nancy Cabral, president of Coldwell Banker Day-Lum Properties in Hilo.

Cabral credited the robust housing market to a combination of factors: namely, banks being willing to offer reasonable loans and a surplus of inventory in East Hawaii.

The Puna District accounts for nearly 40 percent of all residential sales on the island from July-September, continuing the development of what Cabral said is a booming housing market.

“I think sales in the Puna District will continue to go upward,” she said. “It has nice land, nice prices and nice houses.”

Century 21 agent Lance Miyasato said the popularity of Puna is the lingering result of the lava flow from Kilauea in 2014 threatening Puna properties, prompting owners to sell them cheaply.

South Kona, meanwhile, saw the greatest growth in home sales, outpacing last year’s numbers by 42 percent. However, Miyasato said inventory on the west side of the island is low, limiting growth potential there.

“The west side and other parts of the state are prone to high prices and limited inventory,” Cabral said. “The cost over there is prohibitive for average buyers.”

While median home sale prices in Puna increased from $200,000 to $233,000 in the third quarter, they are still far less than the $660,000 and $544,500 medians in North and South Kona, respectively.

North Kohala remains the most expensive district, despite the median home sale price decreasing from $785,000 to $700,000. Home sales in that district remain steady, however.

The limits of inventory are being felt in Hilo, too. The average third-quarter cost of vacant land in South Hilo nearly quadrupled, with the median sale price at $170,000 compared with last year’s $45,000.

Miyasato said a lack of new houses being built in Hilo contributed to a sharp increase in the value of vacant land.

Residential sales in South Hilo are relatively stable compared to last year, however. From July-September, 101 home sales were made in the district, an increase of only seven from the third quarter of 2016. To date, 270 residential sales have been made in South Hilo this year.

Likewise, the median price for a South Hilo residence has only decreased slightly: from a $325,000 third-quarter price in 2016 to $320,000 in 2017, a difference of less than 2 percent.

“I’ve had a lot more cases of multiple offers for a single property this year than I have for years,” Miyasato said.

Cabral attributes the increase in demand in East Hawaii to retiring baby boomers. Whereas retirees could “stay on Oahu and live on a freeway,” they can get more space and a larger home for the same price on the Big Island, she said.

While Hawaii real estate is booming for the time being, Miyasato acknowledged that, like all things, it won’t last. As land becomes less available, it will become less affordable and fewer houses will be built.

“I think the boom is going to last for the next two years on this side,” Miyasato said. “Kona trends are usually a year behind, so three years for them.”

Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.

 

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