North Kona
There were 31 residential sales in North Kona last month. August of 2010 saw 28 and July saw 33, so we continue to look stable. We saw 27 condos sold, same as last year and just below the 30 from July. The median price for residential sales was $329,000 a nearly 20% decrease form $408,500 last year. And down from $353,000 in July. August had a median condo price of $235,000 recovering very strongly from $137,000 in July, and up 46% from $160,000 last year. NOTES FROM THE LOW JULY SALES IN LAST MONTHS REPORT “Looking at the individual sales (I felt that number needed some serious investigation) we had a lot of sales of very small, old condo units. These are units in complexes that had very few sales in recent months, and all of the sudden had many sales. The effect was to drive up the units sold for the month, while driving down the median. So, I think we should not get worried about the low median price of condos, but we should also not get overly excited on the units sold.” As I expected, they July number was an anomaly.
South Kohala
South Kohala continues its stability. There were 18 sales up from 17 in July and 17 last year.. Year to date, the South Kohala market has seen a 33% increase in units sold compared to last year. The condo market in Kohala grew with 245 sales compared to 18 in July and 15 last year. Year to date, condos sold in South Kohala are up over 45%. The median price of residential units sold was $329,000 down from $370,000 in July and down 3% from last year. The median condo price was $324,750 down form $372,250 in July and down from $355,000 last year.
What’s Ahead
Interest rates have plunged. National averages have been under 4% for the last few weeks. I don’t think any of us ever thought we would see this in our lifetimes, 30 year fixed rate loan with a number in the 3’s! There is a good amount of foreclosure inventory on the way as many banks have decided to do only judicial foreclosures. These take more time and as a result, there are more foreclosures in the “pipeline” which should start hitting the market in 6-9 months (that’s the rumor at least). Hopefully that pause will alleviate a severe market decrease. For many buyers sitting on the sidelines, the low rates and the increase inventory in a few months will be the best opportunity to make a purchase. When we see all these properties hit the market, it will be time to buy.