Why are Real Estate Prices in Puna Relatively Low?

[EightFingers]

Could be. That house was part of an estate (owner died before the building was finished). Even for HPP that price was a deal. I looked at that house in March and almost put an offer on it - then found out there were four offers already. People in the area called that house "Dead man's house".

[Kelena]

That house is absolute oceanfront with a superior view and architectural design. Unlike a Cape Code house dropped on lava, this house has features appropriate to the area: a deep, wrap-around lanai, plenty of airflow, and high quality interior design touches. It is effortlessly, and not ostentatiously, spectacular. Congratulatins to the new owner and my condolences to the family of the former owner.

Nonetheless, I am surprised at the price. It seems to be an outlier. It illustrates a certain power of seduction at work in local real estate prices and that oceanfront can make a difference of a hundred thousand dollars or more.

[Cagary]

quote:

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Originally posted by HulaPieGuy

New to forum; really appreciate all the genuine comments & expertise.
Anyway, my wife & I have visited several times and love the area. Looked seriously at a retirement home back in February, that had been on the market more than a year. Unfortunately, by the time we returned home, the house had been sold; at $40,000 over listing price.
Now, for my question: would not a similarly situated (and quality) house be priced at least 4X higher in Kailua-Kona or on just about any of the neighbor Islands (with the exception of Molokai)?
http://bigisland.gurure.com/details.php?M0=228791&SearchType=MLSNUM&MyPropertyType=1

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I don't get it. Listing price was $799,000 and it sold at $680.000. $119,00 below listing price. Why are you saying it sold at $40,000 over listing price?

[Kelena]

I think it dipped, and then it went back up in a kind of "whoopsy" moment.

[HulaPieGuy]

Correct on the "whoopsy" Kelena. Cagary:if you scroll down to the bottom of the BigIslandGuru link, you'll see what I semi-recall as the accurate price history (on 11/23/10 the price dropped from 650k to 640. We viewed on 2/2/11 and then it bounced to 680 on the 9th; apparently in response to the bidding war mentioned by EightFingers).
Following up on the owners death mentioned by EightFingers, after wandering around for about 10 minutes, I mentioned to the realtor that I believed myself old enough to meet my maker in peace, but if we managed to buy the house, I'd probably want to live forever. It was then that she mentioned the untimely (understatement!) death of the owner.
Thanks for all the feedback; anymore thoughts on the original GUESS that anywhere else & the price would have been 4X higher. Don't know that it matters that much because my wife & I agree that, if we woke up tomorrow to find our net worth had increased by a multiple of 10, the Paradise Park/Hawaiian Shores areas would still be our first choice (returning next year to give it another try and this time I'll have secured a realistic market appraisal of our current home and gone through the pre-qualification process...still kicking myself for not having done so earlier this year).

[Kelena]

Hard to compare. If it were elsewhere, there might be a beach. If it were on the Kona side and still on a cliff, I think it would be 1/3 more. If in California, twice to three times as much. But you would need a heater. I wouldn't say 3 or 4 times as much anywhere. Not now. Talkin' completely through my hat.

[csgray]

Sometimes the final sales price on a house is higher than the listing price because cash goes back to the buyer at closing for repairs, redecorating, or landscaping costs. I don't know if banks still cooperate on this, but before the whole bubble burst it was pretty common. The couple who bought our house in Oregon got $10,000 back but paid us $10,000 over our asking price.

edited to add: According to our friends living on the Kona side prices for the kinds of homes middle class people live in have dropped drastically, their pretty nice 3/2 house is worth over 1/3 less than when they bought it 6 years ago, but the top end waterfront estate type places are still holding their value and are still selling. Her husband is a professional gardener for those types of homeowners and those customers aren't hurting at all.

Carol

[Kapohocat]

MLS # Tp Sub Own St DOM Taxkey Tnr Price Location Land area Details
244377 LND VC FL S 75 1-5-39-122 FS 29,000 22nd Ave 1.00 ac
SOLD 6/28/2011 for $32,000 (CASH) DOM 75

What do you make of this? +3K over asking?

[DTisme]

quote:

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Originally posted by Kapohocat

MLS # Tp Sub Own St DOM Taxkey Tnr Price Location Land area Details
244377 LND VC FL S 75 1-5-39-122 FS 29,000 22nd Ave 1.00 ac
SOLD 6/28/2011 for $32,000 (CASH) DOM 75

What do you make of this? +3K over asking?

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I can't imagine more than one party was interested in a lot. That would be the only explanation- unless seller decided to counter with more than asking, which would be weird. Hmmm... who knows, maybe the seller said "I'll clear the lot for you, but I want $3K to do it."

[csgray]

Or maybe the buyer is covering back taxes and other debts on the property, and that is now showing as an increase in the selling price?

Carol