The Big Island real estate market has slowed to a more "normal pace" in 2009. The Hawaii real estate market has been affected by recent declines in the stock markets and the slower West Coast real estate market. There are plenty of properties to choose from and interest rates remain historically low. Big Island home prices are down less than many of the other real estate markets around the country. Vacant land prices however have been correcting as too many Sellers rushed to cash in recent profits, creating plenty of inventory. The condo market is fairly quiet as buyers search for better opportunity in lower priced homes. The Hawaii economy has slowed, but the long term economic outlook for Hawaii's Big Island remains positive. We continue to see 2009 to be a Buyer's market and there are opportunities to be found for those ready to take advantage of a slower market.
Buyers are always looking for a "great deal" and many are starting to take advantage of the today's good values. Sale prices on the Big Island of Hawaii average about 94% of asking prices on homes, and about 90% of asking prices on land. "Contingent Upon Sale", "Low-Ball Offers" or "Trade for my Mainland Property" are rarely being accepted in our market. Many of those who are buying properties today are planning for a Hawaii retirement, or for investment knowing that real estates market is cyclical and a Seller's market will return. Income Investors are finding rental properties with cap rates averaging 4% to 5%. Real estate inquiries from want-to-be residents continue to keep some of us Hawaii real estate agents quite busy, so we know the demand is there. It's a question of "When" buyers will jump back into the Hawaii real estate market, creating a new "Sellers Market." Some Buyers are still "waiting to see what happens" to our real estate prices, wait until the stock market hits new highs, or until they can sell there so they can buy here. Buyers who wait too long may find themselves asking, "Why didn't I buy when it was a Buyer's market?!"
Sellers are saying "I didn't get as much as I wanted, and it took longer than I thought, but I sold!" The number of sales are down from the high three years ago, yet still within our 10 year average. If you bought before 2005 and thinking to sell today, chances are there is profit to be made. It's worth it to put the property online and price it right. It's the "Lets try 20% above the market price to see what happens" that disappoints Sellers when their property does not sell. Priced-to-sell as the best bang for the buck compared to other listings are more likely to sell in today's bargain driven market. Land is more of a commodity and prices vary widely based on supply and demand. We have a little too much inventory on the market, so you also need to be priced well in order to sell.
The 2008 national election has passed, we have an expanded First Time Home Buyers Tax Credit, and people's attitudes are beginning to improve about the direction of the economy, country and real estate markets. This should help 2009 be a better year for Big Island Hawaii real estate sales.
An updated version of this blog with sales statistic graphs may be found on www.HiloAgent.com/bigislandrealestate.htm .