Houses go cheap where lava is hot

HILO » While lava flows on Hawaii island have certainly put a dent into home sales, the market hasn’t completely collapsed in the lower Puna district.

Since the beginning of September, when the first warnings about the June 27 lava flow from Kilauea Volcano were issued, home sales have dropped about 60 percent from the same time last year, the Hawaii Tribune-Herald reported. The comparable rate islandwide is 15 percent.

Real estate officials said that doesn’t come as a surprise because nothing hurts a market like uncertainty.

Despite the lava threat, which has included one house being destroyed, not everyone is willing to sell their home at a rock-bottom price, said Susan E. Lee Loy, president of Hawaii Island Realtors.

"It’s not as dramatic as you might think," she said. "Rather than giving stuff away, people are going to sit tight and see what happens."

The lava remains stalled along the leading front, nearly 500 feet from a main road, but breakouts are active higher up near an abandoned geothermal well site.

Some homes have sold quickly at a fraction of their value.

"I have had clients phone me up and say, ‘We want to sell before it hits the highway,’ and they have sharply discounted their property," said agent Bill Parecki, who is based in Pahoa. "I’ve seen one person I would say discounted almost in half. He sold his house in the first week."

One couple said reducing the worry of what the lava might do was worth a lower asking price on their home.

Merry and Thomas Schell take care of an elderly parent and said they couldn’t risk being isolated from health care services.

They have put their Hawaiian Shores home on the market for about half of what they paid for it in 2005, and bought a different home. Offers are pending on the first property, and they expect to sell soon.

"We were fortunate in that we had that option," she said. "Not a lot of people have options."

Parecki said people looking to purchase cover the entire spectrum.

"You have the vultures, the people who just want to come in and beat somebody to death on the price," he said. "And then you have the other people who don’t care" about the lava.

Those could include retirees, who don’t have to commute, even if lava reaches the ocean and vehicle access remains limited to Chain of Craters Road.

If that happens, he doesn’t expect working-class families will be the buyers until roads are restored.

"No one is going to do six hours to and from (Hilo) to work eight hours," Parecki said. "So you kind of eliminate that population."

For those who can’t purchase, the rental market remains very tight in Hilo, said Nancy Cabral, owner of Day-Lum Properties.

There is some turnover in Pahoa, but rental units continue to be occupied. Part of that might be because of the limited number of rentals in Hilo.

Cabral said she is concerned about the lack of available units in lower Puna if lava does isolate the district.

"There’s not enough (housing), period," Cabral said. "That’s just the fact. There’s not enough."

She and other real estate professionals and housing advocates are offering solutions to the county and state. One of those is to change regulations that prevent the use of modular homes. She said they could be set up quickly in an emergency.

"We’re just trying to get the ball rolling and start the thinking process," she said. "If we start now, maybe we’ll have something in six months."

COURTESY HAWAII VOLCANO OBSERVATORY

The bright red areas illustrate high temperatures and active lava; the white areas are clouds. The image uses false coloring to mimic what the human eye would expect. This satellite image was captured by the Advanced Land Imager instrument onboard NASA’s Earth Observing 1 satellite.