Posted on: Friday, June 10, 2005

Big Island homes hold line on prices

By Rick Daysog
Advertiser Staff Writer

Solveig Lamberg believes the Big Island's Puna District is one of the last frontiers when it comes to affordable homes.

In April, the 56-year-old English teacher paid $240,000 for a three-bedroom, two-bathroom residence on a 12,000-square-foot lot in the Hawaiian Shores subdivision.

"I feel lucky that I can find something that's affordable," Lamberg said. "I don't think I could buy a home on a teacher's salary in Kona ... or Maui."

While prices on the Big Island have increased sharply in recent years, the island is still the place to go for the state's most affordable housing. Homebuyers can find an ample supply of single-family homes for less than $400,000.

According to figures compiled by Hawaii Information Service, the median price for a single-family home on the island of Hawai'i was $371,000 in May.

While that's up 21.7 percent from May 2004, it's less than half the price in Maui, where single-family homes went for a record median price of $780,000 last month.

Houses on the Big Island are even selling for less than condos on the Big Island. Last month, the median price for a condo hit $414,2400, a 47.9 percent increase from May 2004's $280,000.

Mark Richards, president of Maryl Group Inc. and Maryl Realty, said the inventory of single-family homes on the Big Island has risen steadily as new projects — both luxury and moderately priced homes — have come on stream.

"That's led to a flattening out of prices," Richards said.

It's a different story on Maui and Kaua'i, where prices continue to soar to record levels. Maui at $780,000 is the leader and was up about 22 percent from a year earlier, according to the Realtors Association of Maui. The median price for a condo on Maui rose 32 percent from a year earlier to $365,000 last month.

On Kaua'i, the median price for a single-family home leaped 43 percent in May to $665,000 from the previous May, according to Hawaii Information Service. Kaua'i condo prices slipped 1.6 percent to $375,000.

The median price is the point where half the homes sold for more and half for less.

Bill Gresham, president and owner of Gresham Co. which specializes in high-end residential sales on Maui, said that prices on Maui are a direct result of the low inventory of homes on the market and the low interest rates.

While the number of single-family homes sold on Maui was up nearly 31 percent in May to 110, the number of condos sold dropped nearly 10 percent to 155.

Gresham said he expects prices to eventually level as they have on the Big Island as new projects planned by builders such as Stanford Carr hit the market. But Gresham said that the new developments will take 18 months to two years to complete. In the meantime, the market will remain tight, he said.

"It's economics 101. You don't have a lot of stuff on the market so what out there is going to be worth more," Gresham said.