Continuing from last week we will go over some other interesting bits and pieces from the Hawaii Housing Factbook from the current year. This week’s summary goes out to the buyers, some good news in the factbook for buyers who are currently looking for their dream property or even the next step in diversifying their portfolio. The Factbook says:
“Hawai‘i County is an outlier in terms of home prices. Median single-family home prices on Maui and Honolulu have hovered near the $1 million mark for the past year. Prices on Kaua‘i are comparable, with a median price near $900,000. Contrastingly, the median single-family home in Hawai‘i County sells for $400,000. Median condominium prices in Hawai‘i County ($550,000) actually exceed that of single-family homes.”
While the numbers here need to be considered using a deeper analyzation. It is important to remember that these numbers are averages of the home prices here on the Big Island, but the spectrum of homes and the prices of those homes vary greatly, accompanied by outliers on both the high and low priced ends. If you are not familiar with the Hawaii housing market I will provide a little MLS comparison of two similar homes in two different areas here on the Big Island that have sold within the past month (sold in the month of June 2023). I think this comparison summarizes the difference in pricing based on location, view, and other amenities well. I ran a comparison of a couple of 3 bed/ 2 bath homes, with about 1,200 square feet of living area. The two areas that I chose to compare were in the Hove subdivision within Ocean View Estates and Honokohau 1st & 2nd subdivision within Kailua-Kona.
Property 1 Hove Subdivision
Year Built- 2022
Square Footage- 1,200 sq. ft.
Lot Size- 4 Acres
Property 2 Honokohau 1st & 2nd Subdivision
Year Build- 2001
Square Footage- 1,256 sq. ft. living area
Lot Size- 1.03 acres
While there is a drastic difference in price, it is true that both of these homes exist not all too far away from one another. These two properties are 49 miles apart (just under an hour drive) from one another yet their price tags were separated by $945,000. Something that is underlying within these two properties that creates a bit of a premium when it comes to the price of a home here on the Big Island is the view that the home/property has. Property 2 has a beautiful ocean view that makes the Hawaiian evenings and sunsets something to behold. When you accompany this view with the proximity to Kailua-Kona that provides for a much higher priced home, no matter the date in which the property was built. This is what we mean when we say that the spectrum of home prices vary greatly here on the Big Island.
“A single-family home bought in 2000 is now priced nearly four times higher”
Wow, another statistic that is truly mind boggling. Also another statistic that can be taken as a positive or negative. If you are in the “home poor” mindset, you would think that this is why you cannot afford to get into a house today in 2023. However, if you are an opportunistic buyer you see this as an excellent opportunity to get in on a trend that has occurred over the past 23 years! Think of looking at stock prices that over the past 23 years have quadrupled, you would be blown away and invest as soon as possible, right? This principle goes beyond real estate into many other aspects of life we do believe as well. This principle is that we are not victims of the circumstances, rather we are subject to our own perception of the circumstances that we are put in. As was written by Seneca in the days of the roman empire: “We are often more frightened than hurt; and we suffer more from imagination than from reality.”
To wrap up I will summarize by saying that at Island Land Company Inc. it is much like Seneca that our belief that fear and opportunity often look very similar from afar, so fear not and progress forward.
Statistics/Information Taken From:
The Economic Research Organization at the University of Hawaii. “The Hawai‘i Housing Factbook.” The Hawai’i Housing Factbook, 28 June 2023.