Kona has just about hit rock bottom, buy now folks (Honolulu: short sale, foreclosure)

[marcuskona]

Originally Posted by sadie123

Marcuskona

Did your property taxes go down with the value of your property?

yes tremendously, this year was around $750.00.

[Fredesch]

I find this thread very interesting, but I don't see a reason for big island real estate to go up. Some artices from 2010 hoped Hawaiian real estate would go up with Chinese buying real estate. But China has a real estate bubble of their own. Who is out there to push up the cost of real estate on the big island?

[oregonwoodsmoke]

Originally Posted by Fredesch

................ but I don't see a reason for big island real estate to go up............

This is how it works:

Prices on Oahu have already started to rise again, and sometimes rather steeply. The higher the prices go on Oahu, the more people are priced out of the market. People who are priced out of Oahu yet still desire to live in Hawaii, turn to The Big Island where prices are much cheaper. More buyers come in, inventories finally get absorbed, and prices start back up.

A couple of years ago, there were some really super bargains on Hawaii. There were many pages of foreclosures listed for sale. Now the number of foreclosures listed is rather small. The super bargains are fewer and further between. There aren't even as many chicken coops pretending to be houses for sale in Puna anymore.

[Dreaming of Hawaii]

Prices on my part of the Big Island have NOT gone up. A three bedroom house in move-in condition can still be had for under $200,000. And a very small house can be had for well under $100,000.

[whtviper1]

Originally Posted by oregonwoodsmoke

This is how it works:

Prices on Oahu have already started to rise again, and sometimes rather steeply. The higher the prices go on Oahu, the more people are priced out of the market. People who are priced out of Oahu yet still desire to live in Hawaii, turn to The Big Island where prices are much cheaper. More buyers come in, inventories finally get absorbed, and prices start back up.

I've got to disagree with that. Oahu housing prices don't really impact the BI in my opinion except in limited circumstances.

If you are a working professional wanting to move, you still have to work, and employment opportunities are severely limited on the BI despite lower housing.

Want a hospitality position, Maui as the second most visited island in Hawaii and the hotels are a lot more full than the BI.

Retired or just want a vacation home. If an urban tropical island appealed to that person, then Maui is the next logical choice and closer to Oahu in terms of scenery, beaches, and more populated in terms of density.

The BI is more a niche market who needs a type of person where country living appeals to them. It is more a standalone market not really impacted by Oahu in terms of real estate. Oahu's impact to the BI is more tourism related. Less tourists in Oahu means less on the BI.

[hotzcatz]

I've always viewed house and land prices as a "ripple in a pond" effect. The original "prices going up ripple" is started in Honolulu on Oahu and then expands outward from there until it gets to the very outermost fringes of all the islands. Which would explain why the land prices for Dreaming of Hawaii in Naalehu haven't changed yet. That is one of the very fringe areas and one of the last areas to go up.

The "prices going down ripple" is just the opposite. It starts in the very outermost fringes and then prices start decreasing going inwards. It is a reverse of the "going up" ripple. So far, I haven't tried timing the ripple, but this particular one isn't following the usual timing as the ripples did before. It used to be about seven years from peak to peak (or trough to trough, depending on which you were interested in) but this one is way out of sync with the others.

[MarketMaker]

Real estate, like politics, is primarily a 'local' entity -- local supply & demand relative to local income levels. However, if HI real estate prices were solely a function of locally generated income, prices would be much lower. The hard part IMO is assessing the housing demand that comes from retirees & wealthy non-residents.

For example, the now declining Japanese population may lead to less demand and a slight headwind for prices. A Greece-like implosion of the Japanese economy in the next 12-36 months (?) may accelerate selling by Japanese nationals. (See recent commentary by Kyle Bass of Hayman Capital for details.)

With US 'baby boomers' starting to retire, demand may increase for retirement oriented places closer to the specialized medical care often needed by retirees, but that could be neutered by any future tax hikes & benefit cuts that come out of the cesspool that is Washington politics.

The recent tax law change regarding second homes may also adversely impact prices for a while by dampening the demand from US-based investors.

Of course, if 'helicopter Ben' prints enough money, nominal prices may go up even if demand falls considerably. And, I have no clue the extent to which the growing numbers of wealthy individuals in China are interested in HI real estate.

Predicting the path for hurricanes may be an easier task than forecasting HI real estate prices over each of the next 5 years.

[Fredesch]

China has their own real estate bubble to work through, so don't expect lots of Chinese buyers when they already own a empty condo in China.

[OpenD]

Big Island real estate patterns have been confounding people forever. Look at all the real estate developments from the 70s that are still not built out.

And Donald Trump's pronouncement several years ago that "land in Volcano is the most undervalued real estate in the United States"? There was barely a blip from that, even after Oprah bought about $4 mil worth of property in Puna, before heading over to Maui to build a big house for herself. Roseanne Barr's Macadamia Nut Farm exploits over on the north end seem to have depressed real estate values in the immediate vicinity rather than elevated them.

Here's the real deal from my vantage point... the Big Island IS different from the other islands in the state in many significant ways. The City of Honolulu and the Town of Hilo are about as unlike each other as two major population centers can get. The overwhelming ambiance of the Big Island is rural, agricultural, relaxed, casual. There are people who find that attractive, and there are people who don't.

I hope the Big Island stays sleepy. I'm fine if it doesn't get to be all that popular. Real estate brokers can retrain to do something more productive.

[daijoubu]

I think a big problem with the whole Kona side (as well as HOVE, Kau) is that since the Halemaumau eruption several years ago, the vog in these areas has gotten really bad, and has made the living conditions, property values much worse than in the old days. There's no sign it will stop polluting the air anytime soon.