Kona Kohala Blog

While it is rumored that a huge "shadow inventory" still exists in Hawaii, our remaining supply of property is diminishing.  In North Kona the Single Family Residence (SFR) supply is down to 9.5 months, not far above the 6 month supply that is considered a balanced market.  The North Kona condo market has a 12 month supply available, way down from the 24 months we saw just over a year ago.

In South Kohala it's not quite as good but much improved over 2009.  There is an 11.8 month inventory of SFR's and a 14.1 month supply of condos.  That's really not bad for South Kohala since the condo market there is made up of mainly mainland investors.  Most of the South Kohala SFR buyers are probably going to be owner occupants since most SFR's are in the village, not in the Waikoloa Beach Resort area or the Mauna Lani area.

This combined with the increasing number of properties in escrow bodes well for the coming year.  Add to the activity the news that the consumer confidence board has just beaten expectations by a bunch, meaning consumers are feeling better about the economy, and we may see people opening their pocket books a little wider this year.

As we see more of the 78 million baby boomers hitting the 55 mark, more are thinking of second homes if not retirement.  Since people may not be able to retire as planned, having a second home or condo in Hawaii is not a bad second choice.  We expect to see more boomer buying beginning now.  These are the ones who haven't refinanced their homes, most have their home paid off.  They show up with money in the bank and a rosy future.  We're seeing more cash offers than in the past which is a good thing since the banks still seem to have their panties in a bunch and refuse to loan except to those who don't need a loan.

2011 could be a very good year for real estate.  Since fewer people can afford to buy and so many people have lost homes, rental property may be more in demand in the near future.  Owning a long term rental may prove to be a good bet if the unbalanced stock market is your only other option.

To keep tabs on what's going on in West Hawaii, North Kona and South Kohala specifically, email me and sign up for my no obligation, no cost newsletter, Aloha Friday.  Just click here and type in SUBSCRIBE in the subject line.  You'll start receiving your newsletter this week and continue to until you Unsubscribe.