Foreclosures for Sale in Hawi and Kapaʻau
The bottom of the past real estate cycle that began in 2009, when short sales and foreclosures dominated real estate sales in some Big Island resorts and neighborhoods, is far in our rear view mirror. In 2010 and 2011, 2 out of every 5 sales in North Kohala were distressed properties. By 2012 that was already down to 1 in 5, according to my 2013 year in review. There were years when not a single distressed property was for sale in North Kohalaʻs Hawi and Kapaʻau zip codes. In 2023 so far, of 24 sales, only one currently in escrow is bank-owned
In a reversal of past years, foreclosures are not selling well. Currently five of the nine North Kohala homes for sale under $800,000 in Kohala are bank-owned after foreclosures. Letʻs take a look at the opportunity.
Five Foreclosures at the Low End of Prices in North Kohala
In my dream world, every one of these opportunities would provide a home for a local first-time buyer. However, in most cases the condition of the homes will require them to be purchased by a cash buyer with the ability to make repairs necessary for them to be financed by a bank. In all cases, there are improvements or structures that may have been built without permits and the associated square footage cannot be counted by an appraiser. In a renovation, these spaces could potentially be permitted to add value.
Asking prices range from $421,200 for a 3 bed/1.5 bath home with sweet screened in lanai near the middle school (MLS 703502) to $728,000 for a home on almost 1.5 acres in the Kaauhuhu Homesteads neighborhood at a higher elevation above Hawi (MLS 704917)– I remember when the past owner of that one had Icelandic horses on property, and her office in the separate structure (again, check on permits).
What Will be the Effect of Foreclosure Listings in a Low-Inventory Sellers Market?
Real estate inventory (the number of homes for sale) remains at historic lows – here on the Big Island and specifically in North Kohala. Which makes it a really interesting situation for REOs (properties that are bank-owned following foreclosure). Contrary to many buyer predictions, the homes are selling at market value based upon recent sales, and so far are not dragging down real estate prices overall. The bigger question in my mind is whether interest rates will eventually be a drag on this sector of the market.
Still the “best buys” compared with standard residential listings, these properties do offer opportunities for the right buyer. At least one of them could even be financed, so if this is your price point, I am happy to walk you through the process of buying a bank-owned (foreclosure) property.