Lower Puna real estate sales fall sharply amid lava threat

Home sales have not ceased in lower Puna since residents began bracing for the June 27 lava flow.

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Home sales have not ceased in lower Puna since residents began bracing for the June 27 lava flow.

But they have taken a significant dive.

Since Sept. 1, shortly after geologists issued their first warning about the flow, the area from Pahoa and Hawaiian Beaches/Shores down to Kalapana and Kapoho has seen 47 sales of residential land and houses, according to data provided by Hawaii Information Service.

During the same period last year, there were 119 land and home sales. That represents a decline of 60 percent, compared with a 15 percent drop islandwide.

That doesn’t come as much as a surprise to East Hawaii Realtors. After all, nothing hurts a market like uncertainty, and the region’s future remains mostly in the hands of Pele.

But despite the molten threat, not everyone trying to move is selling their home for rock-bottom prices, said Susan E. Lee Loy, president of Hawaii Island REALTORS.

“It’s not as dramatic as you might think,” she said, referring to changes in asking prices.

“Rather than giving stuff away, people are going to sit tight and see what happens.”

Still, there are homes selling quickly and for a fraction of their value.

“I have had clients phone me up and say, ‘We want to sell before it hits the highway,’ and they have sharply discounted their property,” said Pahoa-based Realtor Bill Parecki.

“I’ve seen one person I would say discounted almost in half. He sold his house in the first week.”

Not having to worry about the lava might be worth taking a loss on a home.

For Merry and Thomas Schell, there wasn’t much of a choice.

Merry said they take care of an elderly parent and couldn’t risk being isolated from health care services.

After officials began warning about the flow, they left Hawaiian Shores for Hawaiian Paradise Park and have put their home for sale for nearly half of what they paid for it in 2005.

“We were fortunate in that we had that option,” she said. “Not a lot of people have options.”

She said they have offers pending and expect to sell soon.

But the move will mean delaying their full retirement and giving up on the last home they thought they would buy.

“We actually planned on dying there,” Merry said. “… Of course then they started telling us, ‘If you have health issues then you should start making other arrangements.’”

While sellers want to get out of the way of lava, who are the buyers?

Parecki said they cover the “whole spectrum.”

“You have the vultures, the people who just want to come in and beat somebody to death on the price,” he said. “And then you have the other people who don’t care” about the lava.

If lava reaches the ocean, and vehicle access remains limited to Chain of Craters Road, Parecki said he thinks the area could still be attractive to investors or retirees, basically those who don’t need to commute.

What he doesn’t expect to see is a lot of working class residents until routes under the lava flow are restored.

“No one is going to do six hours to and from (Hilo) to work eight hours,” Parecki said. “So you kind of eliminate that population.”

For those without the means to buy a home, or one outside of lower Puna, the options remain limited.

In Hilo, the rental market remains “very, very tight,” said Nancy Cabral, owner of Day-Lum Properties.

Even in Pahoa, closest to the flow, rentals continue to be occupied, though there is turnover, she said.

Part of it might be the limited number of rentals in Hilo, she said. But there are those who might be willing to wait it out.

“We didn’t expect that,” said Cabral, whose company manages hundreds of residential and commercial leases.

“We were anticipating people moving out and having long-standing vacant units. We were talking about boarding. That’s not necessary.”

Still, if lava does isolate lower Puna, Cabral said she is concerned about the lack of available units.

“There’s not enough (housing) period,” Cabral said. “That’s just the fact, there’s not enough.”

To try to address the shortage, she said a hui of real estate professionals and housing advocates has gotten together to try and offer solutions to the county and state.

One option, Cabral said, is to change regulations that prevent the use of modular homes, which could be set up quickly during an emergency.

“We’re just trying to get the ball rolling and start the thinking process,” she said.

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“If we start now, maybe we’ll have something in six months.”

Email Tom Callis at tcallis@hawaiitribune- herald.com.

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