Isle home values rebound

By PETER SUR

Tribune-Herald staff writer

After years of declining home values, real estate agents are seeing something they haven’t encountered in years — solid ground.

Data provided by the Realtors’ Hawaii Information Service shows that the median sale price of a Big Island home so far this year is an even $250,000. That’s an increase of $550, or two-tenths of a percent, from the same time in 2011.

It’s not a solid indicator of economic growth. The number of homes sold so far this year is still down 4.3 percent from 2011, and the sales volume is down by 1.8 percent. But the signs that the real estate market have been firming are welcome to Realtors, who have had to deal with a deflating housing bubble for the last four or five years.

“I would agree that the market seems to be improving in many areas,” said Mealoha Kraus, president of the Hawaii Island Realtors (formerly the Hawaii Island Board of Realtors) in an email. “The higher-end markets still tend to take longer to sell, but I’ve seen several of those go into escrow lately, so that’s a good sign.

“With interest rates being at historic lows, the more affordable markets are attracting a lot of buyers,” Kraus said. “In my experience, I am having a harder and harder time finding properties to suit their needs. Properties that languish on the market often don’t qualify for the type of loan programs that today’s buyers are trying to get due to condition or other factors.”

She has also heard Kona real estate agents are “really suffering from a lack of inventory,” she said.

Kraus was in Honolulu on Thursday, attending a workshop where she heard that the market on Oahu is beginning to firm up, with sales figures coming in above the asking price. In a subsequent phone conversation, Kraus agreed with her mother and fellow Realtor Denise Nakanishi that the real estate market appears to be following a typical seven- to 10-year cycle that began in 2007.

The median sales price has beeen on an upswing for several months. This past January, the median price was $222,500. In March, it dipped to $217,500. In May, the median price jumped to $300,000, and by July it had settled at $270,000. The August median sales price was up to $277,500, a 9.9 percent increase over the price in August 2011.

On a district-by-district level, the picture is still mixed, with four districts showing increases on the median sales price for the year and five districts showing declines.

Median prices for the year to date in North Hilo lead the way ($300,000, up 50 percent), followed by North Kohala ($599,500, up 17.6 percent), North Kona ($370,000, up 6.0 percent) and Puna ($145,000, up 0.1 percent).

Districts with median home sales that are still showing declines for the year are Hamakua ($235,000, down 20.3 percent), Ka‘u ($105,000, down 17.2 percent), South Hilo ($235,000, down 8.4 percent), South Kohala ($322,500, down 3.0 percent) and South Kona ($285,750, down 1.1 percent).

“For me, of course, it’s come way down in the sense of numbers as well as price,” said Hilo-based Realtor Hank Correa, who specializes in East Hawaii properties. “I have a sense that it’s finally stabilizing, but sales are still far and few between.”

“Financing is still a real challenge,” he added, because banks are scrutinizing prospective buyers closely. He’s still worried about the impact that foreclosed homes will have on the market.

For Correa, his business has been stable.

“Last year, I think in general was probably not as good as this year,” but it was marked by the sale of a few marquee properties. This time, those big transactions have been lacking.

The numbers back up Correa’s hunches. While 1,096 homes were sold to date in 2011, this year the number of home sales is down to 1,049, a drop of 4.3 percent.

The number of sales is up 30.4 percent in Hamakua, down 22.7 percent in Ka‘u, and about the same everywhere else.

Email Peter Sur at psur@hawaiitribune-herald.com.