Kona Market Update: Inventory Down, Sales Up!

Kona’s real estate market continues to gain momentum, as reduced inventory levels and aggressive buyers continue to take advantage of fantastic market pricing.

Our most recent market update via The Griggs Report, shows us that in North Kona’s residential market priced to 4 million,  inventory levels have been reduced 19%  when compared to the same time in 2011.

In the same market, during the same time frame that inventory has decreased, pending sales have increased by 16%.

Decrease in inventory, increase in sales…..you know quite well what is coming next. Increased pricing.

Many Realtors can attest to the fact that we don’t have the inventory we used to. It simply isn’t available. Well priced properties fly off the shelf, and my Alii Lani #F101 unit, currently in escrow, was a great example of this.

I listed the below Alii Lani #F101 condominium Friday August 3, 2012 at 8:11 a.m. Before the end of hour, I had a request for showing. Then a second showing to that same buyer by mid afternoon. The next morning, we had an offer. All parties came to terms Sunday, and we opened escrow Monday morning.

If you are a Buyer in Kona’s current real estate market, DON’T WAIT. Recovery is happening this very moment, and concrete numbers are supporting that.

Don’t be left behind!

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Buying Now: How Interest Rate Increases Affect YOU

“Interest rates are at historic lows right now!”  I’m sure you’ve heard it, but how do interest rates affect you and your purchase?

Interest rates affect your monthly payment, and the amount you will have paid by the time your loan is paid off.

Minute increases in interest rates directly affect the amount a buyer ends up paying in the short and long-term.

Let’s run some numbers to better illustrate.

We have found your dream property, at your price point of $500,000.

The interest rate on your $500,000 dream home is 3.875%. For a 30 year, conventional mortgage you can expect your monthly principal and interest (P&I) payment to be  $2351  By the time the loan has been paid off, you will have paid $1,595,967.

But, you just aren’t certain. Prices have been going down, and you want to wait a week or two, see if the sellers reduce their price. What does waiting a week or two hurt, right? 

Unfortunately, when you next look at this purchase, interest rates have gone up. Now, the best rate you can get is 4.25%, and increase of .375%.

Your same property, now at 4.25%, is costing you  $2460 per month. Principal and interest payment has increased by $109.

Along with that the total amount paid on the loan which previously was $1,595,967 has now increased to $1,785,325, a difference of $189,357 over the life of the loan. Wow. 

The chart below illustrates how changes in rates will continue to affect you, at different percentages. 

Value     Int Rate         Term             P&I Payment        Total Paid                Difference

500K        3.875%         30 year           $2351.19             $1,595,967            From 3.875%

500K        4.00%           30 year           $2387.08             $1,656,749           $72.62/60,781

500K        4.25%           30 year           $2459.70             $1,785,325           $108.51/189,357

500K        4.50%           30 year           $2533.43             $1,923,849           $182.24/327,882

The question you should be asking yourself is, do you forecast the market dropping far enough to cancel out an increase in interest rates? Or are you ok paying an additional $70-$180, or more a month, to continue waiting on your purchase?

Interest rates are at historic lows right now make sure you take advantage of them!

Kona Makai #6301: Exquisite Oceanfront Living!

I previewed Kona Makai #6301 recently on our West Hawaii Realtor caravan and was so impressed I had to share it!

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A top floor, oceanfront end unit with vaulted ceilings, Unit #6301 is the pride of the Kona Makai condominium project.

This spacious 2bed/2bath offering has been completely remodeled with cherry cabinets, slab granite counter tops, new tile flooring, redone bathrooms and all new appliances!

The master bedroom provides stunning ocean views and the unit is graced with an enormous 531 sq ft wrap around lanai that is ideal for enjoying Kona’s year round sunsets! To give you a better idea, that square footage is comparable to some of Kona’s smaller condos!  

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                                                                                                                                                                Up for a swim, kayak or some great snorkeling? Immediately below your unit, you have direct ocean access! Walk downstairs and climb on in!

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Can you imagine the vacation rental potential here?! WOW!

This is a lease hold property, with the lease due for renegotiation in 2019 and lease “expiration” in 2039. If you have questions about the lease and lease hold property, please contact me directly.

Offered for purchase at $449,000,  Kona Makai #6301 needs to be experienced in person to fully capture what a fantastic property this is, please contact me directly if I can arrange a private viewing for you!

Buyer Property Tips – Asking The Right Questions

When previewing property in West Hawaii remember you aren’t just looking at the home, condo or land, you are gathering valuable information. The quality of the information you gather will prove itself to be very helpful, when you are ready to make an offer. Simple questions you ask can save you thousands of dollars when it comes to the negotiating process!

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Often times listing agents of the subject property host the viewings. You will arrive with your buyer’s agent, and the listing agent will give you a tour of the property. On this tour you will have the opportunity to:

Ask pointed questions

Why are the current owners selling?

Moving off island? Job loss?  Illness in the family? Just testing the market? You will get valuable information into the sellers motivation, and how quickly the property needs to be sold. This simple question can speak volumes. Let the listing agent talk, as you listen and take notes.

How did you arrive at the current list price?

Each property is unique, with each seller having different motivations. You will at times run into a seller that is holding out hope for that one buyer that is willing to pay much higher than market value, believe me, I’ve run into them myself!

Realtors provide their clients with facts and figures, market statistics that illustrate where the market is and at what price the sellers are most likely to sell their property. Once presented, sellers embrace this information, or take into consideration and position their property differently. The listing agent will have provided this information, and if the property is $50,000-$75,000 overpriced, will have a hard time keeping a straight face.    What he or she will be able to do is provide neighborhood information, and give you the reasoning/facts as to their current price.

At the conclusion of the showing make sure you and your buyer’s agent discuss what the listing agent has relayed. Compare notes and fact check with your agent on what was presented in the showing.

Remember, you aren’t just looking or previewing, you are gathering valuable information on that property, and on that specific seller. Information that you can put in your buyer’s tool kit, that will help YOU when it is time to write-up an offer!

I’m off to show property in beautiful West Hawaii, stay tuned for more buyer property tips!

West Hawaii’s Newest Real Estate Blog!

As a West Hawaii resident whose profession is real estate, launching a blog devoted to property, lifestyle and island happenings I felt had the potential to be informative and helpful to persons interested in our own wonderful part of the Big Island, West Hawaii.

I have been an active, licensed Hawaii Realtor with Clark Realty Corporation since 2007 and with that has brought market experience, knowledge, along with a few absolutely hysterical stories!

Real estate isn’t just a “job” for me, it is something I personally enjoy. Being able to preview, show and sell amazing property in one of the most beautiful locations on the planet, truly is a gift.

 

Mahalo for stopping by, and be sure to check back frequently for updates!