If you have been shopping for a home here in Kailua-Kona the past few months you might notice that something strange is going on. After months of falling prices the average listing price of homes in Kailua-Kona shot up 3.1% month over month.
Could the bottom of the market be behind us? Maybe, maybe not. While the listing price of homes has risen the actual sales price of homes here in Kailua-Kona continues to fall. The median sales price has fallen 10% compared to the same period last year. Price per square foot has fallen even farther; down over 17% from last year.
So why the rise in listing prices? Simple, supply and demand. These low prices have attracted buyers. The number of sales is up. In fact home sales have increased a whopping 45.7% compared to the same period last year. At the same time the number of listings on the market is falling.Â We are finally making some headway in clearing out the inventory of unsold homes.
Are prices really going to rise?Â Probably not yet.Â One reason for the listing price inflation is that agents are competing with each other to get listings and seller’s are eager to go with the agent who suggests the higher price. What these agents aren’t telling their sellers is that to get a loan buyers need an appraisal. Appraisal’s are based upon what has sold. And as I pointed out the prices homes are selling for continues to drop. With all the short sales and foreclosures in the pipeline that won’t be ending any time soon.
So what does this mean for a prospective buyer or seller? Now more than ever you need an agent who is on your side. If you are looking to sell your home you need an agent who will price it to sell. If you are looking to buy you need a dedicated buyer’s agent to steer you towards well priced homes.