Our Most Current Real Estate Market Insights

10/15/2019

The Mike Griggs Report has been researched and published for years by my friend Michael B. Griggs, PB, Graduate of the Real Estate Institute with real estate appraisal experience, provides the reader with a unique comprehensive market driven up-to-date micro and macro view of our real estate market trends here in West Hawaii.

This report is different from most, as it includes; Price Direction, Rate of Price Change, Current Market Inventory Levels and Pending Sales Trends which together show the most current market activity information to give as many clues to price direction, volume of sales activity as possible. The “Pending Ratio”, is, the ratio of Pending Sales (those in escrow not yet closed) to the Active Listing in Inventory, as a measure of the current supply/demand dynamic.

From a MACRO PERSPECTIVE, the buyer or seller strength over all in the market is generally steady and positive for both buyers and sellers. There are however differences between residential, condo and land sales, which must be factored in depending on your particular interest.

An important factor in the housing market has been the steady march of rising prices for the last decade in the affordable end of the market, which is surpassing the upper limits of the average local buyers income ability to buy. This is in large part is due lack of adaptation in vision and leadership of County Government as they’ve missed and are missing the opportunity to aggressively address the need for zoning and code changes where possible to preempt the problem by increasing zoning capacity for the affordable alternatives such as creative duplexes (i.e. half a house for a young family) and apartments for the entry level buyers as well as prefabricated and tiny homes. This in conjunction with the very low issuance of building permits over the last 10 years, has created the crises of extremely low affordable inventory which naturally puts great upward pressure on those prices. That said comparing real estate prices state wide, the Big Island still offers the best values in the state and some of the most extradentary surroundings. ——-Greg Gerard, PB, CRS, CIPS, GRI, Kona-Kohala Realty LLC

___Mike’s Report for 10/15/2019 more the MICRO VIEW___

1. The latest data from Hawaii Information Service for N. Kona residential reaffirms that the market is still strong and active. We see the Kona residential inventory at a new recovery low. Pending sales are up 22% from last year. Most importantly we see the total 12 month sales for homes priced up to $4.0M remain well over 500. This is reminiscent of the numbers seen in 2002-2003 leading up to the last market peak. If Pending Sales remain in the 90+ range we should continue to see 500+ sale per 12 months (homes priced below $4.0M).

2. The price range data at the top of page 2 shows 50% of the sales fall in the $400K to $700K price range. There are only 55 homes listed under $900K.

3. The Hawaii Island Residential Pending Ratio has taken an unexpected increase involving both East and West Hawaii markets. The normal seasonal trend had been for a declining trend this time of year as inventory increases and activity slows. We could still inventory start to increase as we move closer to the winter season? The more likely scenario is that the current smaller field of sellers have found they do not need to wait for the busy winter market, there are enough buyers right now?

4. Overall the percentage of listings of REO or Short Sales on the market continues to decline. Waimea is now showing only 4% listing being distressed properties. The average for all five market areas is 7%.
The REO numbers in Chart 6 show an average decline in properties owned by Fannie Mae, Deutsche Bank, Wells Fargo and Bank of America. The numbers have fallen from last year’s 82 to the current 68. It had been 250 in 2010.

5. The Condo stats continue to be strong with a Pending Ratio in Sellers’ Market territory at a new high of 83. In 2002, before the last peak market, the Pending Ratio was similar at 93. Median Prices are showing +5%. year/year increase.

6. Like Residential and Condo the Land stats show a shrinking inventory. The continued strong sales numbers will certainly contribute to further decline in inventory and price pressure. Median Price has turned positive after many months showing decline. It now is up a strong +9%. Pending sales declined this past month.

7. Page 6 is the Pending Ratio Summary page. This page offers a quick glance of the Pending Ratio trend for N. Kona Res., Condo, Land and Hawaii Island. In this report we see a strong year over year improvement in all categories.

8. The Page 7 Kona Residential Price chart since 1972 has been updated with the new 2018 data. This maintains a data pool of similar homes many of which were new sales or have resold over the years. The total number of sales that make up the data pool now stands at 7,644 in the 23 subdivisions in the study. The year/year price change for this Mid-level housing group for 2018 is $615,100, up from 2017’s $587,100. This represents a 5% price increase for 2018.

9. The Kona vs. West Coast will continue when August San Diego data becomes available.

The Griggs Report is published semi-monthly by Michael B. Griggs, PB, GRI

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For an email copy of the full report and charts, simply request them via: GMG@Hawaii.rr.com or call me; Greg Gerard @ 808-987-7720.

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