Big Island home sales continued their decline in May, with 35% fewer single family home and condominium units sold than in May of 2007. The median price of single family homes for the entire island fell from $439,500 in May 2007 to $390,000 in May of 2008, for an 11.26% decrease.
North Kona reported in with single family home and condominium sales down over 24%. The median price for a single family home fell from $680,000 to $549,072 for a decrease of over 19%. For the second consecutive month, the median price of condominiums actually rose. After April saw a 2.6% increase, May had a 4.54% increase, to $355,450. However, a close look inside the condominium numbers reveals that while May was up when compared to 2007, the median price for May was $40,000 lower than just one month before.
Buyers should pay close attention to the next few months’ numbers. In the past, we have seen condo prices rise, with buyers viewing condos as a value compared to single family homes. Eventually, the gap closes to a level where the buyers decide that the value is in single family homes. In short, buyers use the price of a single family home to justify buying a condo, and then after condo prices have gone up use the price of a condo to justify the value of a single family home. If you are in the market for a condo, you want to make sure you buy your condo before the prices stall.
South Kohala saw single family homes prices fall over 12% compared to last year for a median price of $485,000. This is up from $447,450 reported in April. What I mentioned in the previous paragraph about condo prices in North Kona rising until pushing up single family home prices, also holds true for single family homes in South Kohala pushing up single family home prices in North Kona. Simply put, buyers tend to save money by not buying a house in Kona, and instead purchasing a condo in Kona, or a house in Waikoloa.