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Strong month can’t revive neighbor island home sales

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While single-family home and condominium sales soared on the Big Island and Kauai last month, the residential real estate market still has not recovered from a significant drop in neighbor island transactions during the past few years.

There were 124 homes sold on the Big Island in August, up 25.3 percent from the 99 homes sold a year earlier, according to data released this week by Hawaii Information Service.

However, the median sales price for a single-family home was down 5.2 percent to $275,000 from $290,000 in August 2009.

And while Big Island condominium sales climbed 16.2 percent to 43 from 37, the average median price plunged 13.5 percent to $220,500 from $255,000 the previous year.

HOME SALES

The number of homes sold on the Big Island and Kauai in August with the median price and percentage change from the same month last year:

HOMES
  Big Island Kauai
SALES
Aug. 2010 124 31
Aug. 2009 99 23
Change 25.3% 34.8%
MEDIAN PRICE
Aug. 2010 $275,000 $607,500
Aug. 2009 $290,000 $471,000
Change -5.2% 29.0%

 

CONDOS
SALES
Aug. 2010 43 23
Aug. 2009 37 15
Change 16.2% 53.3%
MEDIAN PRICE
Aug. 2010 $220,500 $334,000
Aug. 2009 $255,000 $313,000
Change -13.5% 6.7%

Source: Hawaii Information Service

While lower prices and favorable interest rates make for good bargains, "there’s just more supply than there is demand," according to Howard Dinits, a Big Island and Maui Realtor at RE/Max Resort Realty.

"Sales are up because it’s cheap," he said. "It’s affordable like it hasn’t been in 10 years on the Big Island."

However, the island’s economy is far from a recovery, Dinits said.

"We do not have high-paying jobs on that island," he said. "Though tourism was up, it’s been a good two years since the Big Island has seen any good tourism. It’s going to take more than people buying houses, they’re going to need jobs."

On Kauai, home sales jumped 34.8 percent to 31 last month from 23 in the year-earlier period, while the median home price rose 29 percent to $607,500 from $471,000.

Condo sales on the Garden Isle soared 53.3 percent to 23 from 15, and the median price increased 6.7 percent to $334,000 from $313,000.

"The short sales and foreclosures, of course, are driving the market," said Phil Fudge, principal broker at Kauai Landmark Realty. "Last year was a terrible year from the year before so any improvement would be just slightly above a disaster."

Even though inventory is growing as more households face foreclosure or other financial troubles, consumers are "scared to buy," Fudge said. "The only people buying are people who are insulated from the economy."

 

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