Kona Kohala Blog

Lots of activity in the West Hawaii marketplace in early April.  If my listings are an indicator of what's going on out there, we have a near record number of people out looking for property in both North Kona and South Kohala.  One thing they're all finding is that many of the good deals of even a month ago are gone, sitting in escrow waiting to close.

Our market is rapidly approaching the infamous "balanced market", an inventory with a 6 month life.  We determine this by counting the number of sales over a 12 month period then divide that number by 12.  This gives a monthly average for the number of sales.  We then divide the number of active listings by the average number of monthly sales to get the inventory in months.  Six months is considered a balanced inventory or supply, it's a market that doesn't favor buyers of sellers.  Today in North Kona we are very close in the Single Family Residence (SFR) market and we are there in the condo market.

If the inventory is higher, say a 10 month one, it's considered a buyer's market with lots of property for sale and sellers willing to negotiate to beat the competition.  If there is less than 6 months supply it's considered a seller's market meaning the sellers get to call the shots.  There aren't enough properties to satisfy all the buyers so as with any shortage, prices tend to go up.

The other news and I'll have more details tomorrow is the foreclosure market is drying up.  While it's far from a desert in that market for North Kona and South Kohala, we've seen the number of foreclosures decline for the past few months and February only had 92 on the Big Island.  Without the steady stream of foreclosures our inventory will shrink faster moving more towards that sellers market, supply and demand and the supply is shrinking.