Our Most Current Real Estate Market Insights

1/1/2020

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 toward the seller. There are however differences between residential, condo and land sales, which must be factored in depending on your particular interest.

My Golden Tip For Today, from my observations (Greg Gerard that is) of general trends nationally, globally and here in Hawaii, 2020 will be a tumultuous year and probably a tumultuous decade, full of hard decision and a character building period. It’s a good time to double down on aloha (that means love) and hope, with particular emphasis on living in a safe place with people around you who share similar values. Keeping in mind no place is perfect, we’re always left to deal with the ragged edges of life, which does require tolerance.

After 32 years living here in West Hawaii, my golden tip today for a good place to live with great up side potential is the area between Palani Road and Honaunau, generally near Mamalahoa Hwy, it’s unique even for Hawaii and Hawaii Island because of the abundant pleasant sunshine, pleasing temperatures, standard insurable lava zone risk, modest but very adequate rainfall, historic protection from the big storms,  a safe elevation from ocean turbulence and projected changes. This is also a particularly good area for growing almost everything year around with very good sources of water, it’s lush and beautiful. The simple but important things for a good living.

Regarding the housing market, Mike describes it as rising prices particularly in the affordable end of the market, which has surpassed the upper limits of the average local buyers income ability to buy, a disturbing fact. In large part this is due lack of prior vision of County and State Government, over regulation, imprudent spending and narrow thinking. A one party system doesn’t lend its self to the best timely solutions. They’ve missed an opportunity to aggressively address the critical need for re-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, creating the crises in lack of affordable inventory, which naturally puts upward pressure on prices at the lower end of inventory. That said, this years state legislative priorities are seriously focused on how to address not only these issues but the over all cost of living for local people here in Hawaii.

All in all 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 1/1/2020 more the MICRO VIEW___

1. The latest data from Hawaii Information Service for N. Kona residential market shows the inventory is down substantially from a year ago. On the demand side we see Pending sales are up from last year’s number. This limited supply and strong demand is now moving price higher. Median Price had remained stable in the $635,000 range for almost two years, now is at $645,600.

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 has been an increase of 50 homes sales in the $500K to $700k price range since last year. The $900K to $1.5M range is also showing a nice increase with 23 more sales than 2018. The most significant change is in the over $4.0M price range which shows a gain of 7. Median price of last year (18 sales) was $6.0m and it is $7.0M for the current 25 sales.

3. The Hawaii Island Residential Pending Ratio is even on both East and West HI. The historical pattern suggests that this should increase in mid or late January as the winter buying season kicks off.

4. The percentage of listings of REO or Short Sales on the market has increased slightly since October. The increase was primarily due to increases in Hilo and Puna.
The REO numbers in Chart 6 show the number of properties owned by Fannie Mae, Deutsche Bank, Wells Fargo and Bank of America. The trend here is continuing of the declining trend. It is now only 65, haven fallen from 250 in 2010.

5. The Condo stats continue to be strong with a Pending Ratio in Sellers’ Market territory at 61. Median Price is showing +6%. year/year increase. The inventory of active condos under $1.5M is down 26% from last year. This low inventory is likely contributing increasing prices.

6. Like Residential and Condo, the Land stats show a shrinking inventory also. There are only 98 land listing priced under $1.5M. Median Price has turned positive after many months of showing decline, up +7%.

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 except the under $400,000 residential market. That market is no longer a reliable indicator because of its limited inventory.

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 is now updated through October 2019. San Diego year/year price appreciation is still positive at +2.66%, whereas Kona is only showing + 1.51%. San Diego is leading CA metros in year/year appreciation. San Francisco, which saw steep price increases early on is show a modest decline in the October data.

The Griggs Report is published 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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