 to Inside Hawaii Real Estate, a community real estate show dedicated to providing up-to-date information news to Hawaii home buyers, sellers, and investors. I'm Will Tanaka with my co-host, business partner, and wife, Leonie Lam, a realtor with over 20 years of experience in various leadership roles in the Hawaii real estate industry. Thanks, Will. Will is a full-time realtor, a lawyer, a law school professor, and the former head of a Hawaii title and escrow company. Together, as full-time realtors, Will and I are immersed in the Hawaii real estate market, and we work as a team to bring you the latest in Hawaii real estate. On today's show, we are ready to take a virtual visit over to the Hawaii Island, affectionately known as the Big Island, because it's the largest island in our Hawaiian island chain. It is smaller in population, but larger in size, and the most well-known cities over on the Big Island are going to be Hilo or Kona. And we are so honored to have a very special guest today, Laila Nbento. She is the principal broker and the owner of the Hawaii Development Group. She's also an affordable housing advocate, born and raised on the Big Island, so we're really looking forward to going inside Big Island or Hawaii Island real estate together. Welcome, Laila. Aloha, Will and Leonie. Thank you so much to both of you for having me on this show again. I'm excited to see what, you know, share with you folks what's happening here on the Big Island of Hawaii and also what's happening on your island as well in real estate. It's always, you know, nice to just catch up with you too. All right. Well, yeah. No, thank you. And of course, the Hawaiian island is the neighbor island to Oahu, but an island that we are personally very fond of, of course, you know, seeing you visiting the awesome places. And, you know, when it comes to real estate, how is the market on the Big Island? The market here, it's holding strong. I think it's similar to what's going on throughout the rest of the state. Inventory is still low. We're seeing a little bit more housing coming on to the market, but our median home price has gone up year over year. And so, you know, different districts it's gone up, it's still up, you know, 10 to 11 percent just with the median. So, we do still have, you know, low inventory, but still our median home prices are still, you know, going up there. And we still have about 40 percent of all of our transactions are still cash buyers. And so, we still have that strong market of, you know, cash buyers coming into the market, 1031 exchanges and then, you know, just the local community also trying to find housing as well. And then you know, in terms of the active listings right now on the Big Island, is that on the Kona side, the Hilo side? Of course, you know, the Hilo side is the east side of the island. Kona side is the west side. I mean, I'm being very generic, but where are all the listings right now? Where's the inventory? Inventory, I would say, is mostly on the east side of the island. You have a lot of spec homes going up over there, a little bit more custom homes where you're finding builders, it's more affordable for them to build on the east side of the island compared to the west side of the island. Just with the difference of, you know, our acreage and our land is much more expensive, maybe three, four times what it would cost to just for land alone on the east side of the island compared to, you know, buying on the west side. So the west side is much more expensive for land. And so you're finding more builders are heading more towards the east side of the island. We do have some, you know, developments popping up here on this side of the island, which is nice to see. I felt like it was a little bit stagnant, you know, for a while there are just new developments coming through the pipeline. So it's nice to see, you know, just any type of more housing just coming onto the market for more people to be able to purchase and stay and live here on the island as well. So it seems like, you know, there was the COVID years and over the last year and a half or so as we kind of just adjust back to normalcy. Has there been a shift? I thought it would be, you know, it slowed down just a little bit with inventory. I would say last year, right, maybe around June 2022, you know, when they started increasing mortgage rates, then you saw, you know, more of a slowdown. And then, you know, people still having, you know, they were luckily, you know, the only ones bidding, you know, or putting in offers. And now I'm slowly starting to see where it depends on what's out of the island or what, you know, the price point of the house is you're still seeing, you know, I think this month I did four different offers where you're in a bidding war again. So you now have to throw back in the escalation clause and just the different contingencies. So I kind of felt like we were back in COVID. It's not with every home, but you see it with, you know, a certain price point where you have more buyers, you know, because I've been waiting and, you know, the interest rates have come down a little bit. So now they're all jumping back in. So it's, it reminded me of being in COVID again on some of these properties lately. Yeah. So for home pricing, you know, on the island of Oahu, on our island, we're seeing like single families are like around a million dollars. It was a little bit less last month, but still just basically around a million. That's for single family for the median home price. And then for condos, it's like at five, 10, you know, here in Oahu, so what, what is the pricing or the median sales price looking like over on the big island? Then right now, what they do when they do, you know, take in all the data with the big island and, you know, that happens on a lot of the areas of the, you know, outer islands, because you do have many rural districts and then you have, you know, resort districts. So with our island, the big island, they kind of combine, of course, the entire island. So you will have land on one side of the island, that's 20,000, and then on this side of the island, you can go up to a couple million for a lot, depending on where it's at. And so for our median, comparing all of the districts, it's about 550,000 is the median. But if you're looking at the west side of the island, our median is about 1.2 million. And then if you're looking on maybe the Puna district on the east side, it's about 392 for their median. So it does vary drastically, depending on what area somebody is looking to purchase. That's a pretty big spread. And so the district, the neighborhood, et cetera. But no, thanks for explaining that. That's a really big spread. It is because sometimes, you know, you will have people and, you know, I wouldn't know if I didn't live here, just looking at those numbers and thinking, okay, I'm going to live in a resort area or, you know, a nicer area in a gated community. And I don't, I only have to pay, you know, a couple hundred thousand, right? And then you have to just explain, okay, what area of the island that is, they may not have electricity or water. So you just kind of have to break it down on what their budget is. And then, you know, where they can afford it on the island and then should be looking. That makes sense. And then when you were sharing about the median, the median prices for homes on the big island and for condos, like the condos are actually higher than in family homes. That's, that's interesting. Right. It is. And that's because on the big island, there's only certain districts where you have condos. Like Kilo doesn't have too many condos, like North Kohala. A lot of the districts don't even have condos. And if they do, maybe one or two buildings, it's mostly along the west side of the island. So all of the resort areas, you're going to look, you know, Waikoloa, the Kohala Coast, North and South Kona, they've kind of just built in those areas, condos. So of course, those areas are, you know, higher priced housing. So that means the condos are going to be higher priced too. That makes sense. And, you know, regarding condos, like in our Oahu market, we're having major issues that we're facing with condos because a lot of our condos are really aging, right? Like 90% of them are something we're built before 1980. So we're having a lot of issues with that. And also with building insurance, is that something that's impacting big island as well? It absolutely is. I in fact have an escrow right now where it's an oceanfront, older condo, concrete building. So that's nice that it's built more solid. But it is by the ocean. And we had to have actually the lender going to prove it, which ended up being with those certain types of situations on our island, at least we have to go to the local banks like First Hawaiian, Bank of Hawaii, American Savings to lend on those buildings because the insurance has doubled or tripled in the last, you know, maybe a year, year and a half. And so now the HOA is struggling to pay those deductibles per diem or that premiums that the insurance companies are now charging them, especially with the oceanfront condos. And like you said, the older condos. So it's interesting to see and a lot of a little bit more due diligence, right? With when anyone is selling a condo to, you know, send it over to the lender first, right? To see if they see even something that they can package and create a loan on or if the, in this particular case, the buyer actually has to come up with a little bit more for the insurance just for the loan because the HOA didn't is not having enough coverage for that condo complex. So it's interesting to see, you know. Yeah, that's exactly what we're facing in our market to with regard to condos. So interesting to hear the same situation over on the big island. Yes. And are you folks seeing with older condos because I'm coming across this where in COVID or because they're aging, they have a couple of capital projects, right? And because of inflation, what they had these construction bids at is, you know, tripled. And so now the HOA, the different HOAs I'm seeing with the older condos are looking at, okay, is it the sewer system that we should redo or painting, right? And just because now that they're ready to have that and what they've set aside is now three times what they originally budgeted for. And so you're starting to see some of the older condos here looking at what's more important and then kind of pushing off some projects, you know. Yeah, sort of a triage of like what's most important to kind of because everything has gone up so much. Yes, definitely. Right. And it's interesting to see, you know, reading all through the condo documents on that, for sure. Oh, yeah. Yeah, over here, you know, spalling issues. Elevator, re-piping is a big one. And then, yeah, and ever since the Marco Polo, yeah, the plumbing issues, ever since we had the fire on Oahu with the Marco Polo fire, the life and safety inspection. Yeah, so it's been a lot of increasing maintenance fees to build up the reserves or special assessments. Right, right. Exactly. It's interesting though. Yeah, it's always changing for sure. Oh, yeah. And then, you know, in terms of listings, we're kind of talking about multiple bids already. So are they fairly going quickly? Some properties are if they're in a desirable area and they're priced well, they definitely are, you know, they're going very quickly. It depends on, you know, what area it is and if it's priced, you know, a little bit right below everybody else, it'll definitely be sold quickly. So I'm definitely seeing that if it's overpriced and not in so much of a desirable area, then it'll sit for a little bit also. Right. So in terms of just investment in real estate, you know, an investor looking at Hawaii as a state, like I want to invest in Hawaii real estate, their dollars, it sounds like we'll possibly go farther if they were to purchase on the big island versus like Oahu maybe. Yes. And we are the most affordable island still in Hawaii, right? Just because you have the different districts and you can find a little bit of everything, right, depending on what type of weather, you know, you enjoy, where your job is, if you work remotely, you know, if you want to be by a black sand beach or white sand beach, you can choose the different areas. And our island is definitely more affordable. Especially right now, I'm seeing on the east side of the island, you can get a custom brand new home. You may be on a water catchment system, but you know, you are also going to be on maybe an acre or two acres. And so we are starting to see an influx of facts on little buyers, right? Because we're getting a brand new home, it's customized for maybe 500,000. And you know, they have land, you know, have a garden or whatever they do choose, you know, especially a lot of retirees we're seeing from Honolulu or people that work remotely, just moving on the east side of the island. And that's a good point. So regarding jobs, you know, so if you, if you didn't work remotely, you were not retired, like how is the job market on the big island? So if someone was thinking like, well, I want to go move there with my Hawaii life and work, I mean, are there opportunities still? How is the job market looking? I would say the hotel industry, hotel industry, government and then the medical industry, those are probably the top three for this island. If they're looking to do any of the, if they're in any of those fields, there's definitely jobs here on the big island. A couple of years ago, Queens took over the Waimea hospital. So you are starting to see or we're starting to see more, you know, surgeons and specialists move on this side of the island or onto this island from Honolulu because Queens has now brought over, you know, their specialized teams and built out the hospital, which is nice instead of, we was just a very small little community hospital growing up here. So it's nice to see Queens taken over and expanding. They're expanding our Hilo hospital. So the hospitals are being expanded, which is nice because then that brings more medical doctors and specialists and of course nurses to the island. We do have quite a bit of traveling doctors and nurses that come from across the United States to, you know, fill our hospitals also if there is a shortage. Well, that's good to hear. You can't get enough doctors and medical staff, that's for sure. So you know, or especially for local residents, just to paint a picture for our viewers, what is the cost of living like on the big island? The cost of living, well, for the big island, a lot of people, the west side of the island is very expensive, but that's where most of the jobs are, right? So you have a lot of local families either living on the outskirts, you know, they're still in like Kona town or Waikaloa, but because pricing, housing has gone up in those areas, you see a lot of people living south of maybe an ocean view or they're living in Puna or on the other side of the island and they drive, you'll find a lot of people that drive from the other side of the island or south of the island to, you know, these districts just to work, some of them work, you know, two or three jobs, so unfortunately they sleep in their car, you know, in between shifts, but that's where they're driving from just in, you know, one day stopped with my mom and we were talking to the people on the bus and they were older people that, you know, get up at three and they're on the bus at four coming from Hilo and then they get back home, they said around seven or eight, so not much family time, right? Or time to even really sleep. It's interesting just stopping on the side of the road just to chat with people and see, you know, what they're doing, where do they work, where are they traveling from, but that's pretty much what it is. You do still see a lot of local families in the Kona area, but Waikaloa too, because there is, you know, jobs on this side too, so they're kind of scattered throughout the island, but a lot of them once, you know, real estate really started increasing, they moved to the outskirts where they could afford their housing, right, and then they just commute back and forth. Yeah, I mean, like for cost of living here in Oahu, it's hard to find a plate lunch for under $15, you know, like we just picked up lunch yesterday with 20 bucks for one plate, so I told Will that we're going to share, but how much would you say plate lunch is on the big island? Can you still get something for less than $15, or is it like? Not really. It depends. Some areas, maybe a poke bowl you could get for less than $15, maybe one or two sides, but not a big, you know, poke bowl. It has definitely to cost a living or groceries, of course, where food has gone up. And so I grew up in a family of four. I only have one daughter, but when I used to sign her up for sports or even going to the grocery store, I used to think of my mom going to Costco and times it by four, right? So I always think of families that have a lot of kids, you know, and what I'm paying times it by four or five, right? And I think, well, this is a lot of family has to, you know, just for dinner, right? We can definitely, yes, I know you folks would understand. And hey, Leila, still, you know, a little bit later, we're going to dig deeper into what's happening in terms of new opportunities for the local residents because you're such a strong advocate for affordable housing. First, I wanted to kind of talk about, you know, it's the winter visitors are here. And what's like the buyer profile that you're seeing? And what should an investor consider buying? Like which areas are considered like the hot areas? The hot areas, if you're an investor, a lot of investors are looking at the short-term vacation rentals, right? Because you can make four or five times compared to long-term renting. And so for an investor, I would strictly focus on where you're able to vacation rent, right? Or if it's a house that has a special to NUC, it's a special permit for an investor. And but I do explain to them, even though, you know, you're able to vacation rent, it depends on if they're getting a mortgage, the HOA fees might be a little higher, but you're able to vacation rent. So you're not limited to, you know, a standard capped rate every month. And so for investors, I would focus on the vacation rental areas on the big island because you're going to make more of your money back on that investment compared to maybe just buying a home in a rural area might be cheaper, but, you know, you have to long-term rent it, right? Especially what we'll talk about coming up with the new non-hosted or the hosted vacation rentals where an owner or caretaker lives on the property that our county council is trying to have them register now with permit. So that's changing. And so I would, going forward, really have investors hone in on those proper zonings of those resort areas to vacation rent. Okay. So in terms of these resort areas that allow short-term vacation rentals, I think they're also known as transient accommodation rentals. What are some of the areas where these investors and winter visitors are looking at? They are looking at what we call the Kohalako. So that would be, you know, Mauna Kea and Hapuna Resort, Mauna Lani Resort, Waikaloa Beach Resort. It's all the different resort areas along the west side of the island, including North Kona. Well, they do have, they have strategic areas that are mapped out to be in that resort zoning where you can vacation rent. And outside of there, it's spotted when it comes to zoning of what areas you can vacation rent, which ones you're not able to vacation rent. But those areas, they're zoned for the proper zoning to vacation rent. You know, there's hotels within those resorts. Yeah. So kind of shifting focus over to local Hawaii residents, specifically on the big island. What would your update be for the local residents? You know, are there going to be any new opportunities for them to get into the local real estate market in 2024? Absolutely. And I'm excited actually being a local girl, being from, you know, this island and seeing I think I read it was about 10,700 homes that we needed for our island by 2025 for affordable housing. And right now we have a little over 6,000 in the pipeline where before years ago, before this current county council and this administration, we only had about 1100 in the pipeline. And so it's exciting to see that we have about six times more. It doesn't, you know, solve everything, but at least that's a huge maybe punch, right? To get all of these affordable housing units built and start getting families, you know, not moving to Las Vegas and being able to stay here and work in those areas because a lot of that housing is going to be in these areas that they already work, right? So there are kids in school here, maybe a parent getting off work and go and coach their kid for soccer or something or football, right? Instead of driving a couple hours before getting home and practice is already done. And so I'm excited to see those 6,000 units, you know, finally start to being built. Some of them are already starting to be built. So it's exciting to see, you know, more families will be able to have affordable housing they can afford and where they want to live, right? Not in the outskirts of the island. And, you know, also a lot of those schools are even, they're driving their kids to another district to go to school too, right? So it's like, you're just living in your car, driving around and around. So it's nice to have families centralized where they work and go to school and, you know, just live all in the same area. It definitely sounds like a step in the right direction. Yes, yeah, absolutely. So I'm excited that families will be able to, you know, you can turn over housing and they're going to be able to live on the island, not move away. Exactly. Yeah. That's great. Yeah. I know you, we had talked about earlier how the Hawaii County Council, they approved like 17.3 million to seven affordable housing projects just a couple of months ago. Yes. And four of those projects, three are on the east side of the island and four are on this side of the island. So they did award, there's more projects, but they were, I think they had 20 applicants and they awarded seven of them. But at least it's something to help those affordable housing developers because it is, it is expensive for any developer to come here and, you know, try to build and keep it affordable, right? And not have to put those expenses onto somebody trying to build, I mean, buy or even rent their place. So that's nice to see that they, you know, awarded 17.3 million to seven of those housing projects. So that's nice to, definitely nice to see that our County Council did that too. Yeah, that's fantastic. And I think just, you know, just like on Oahu, Big Island, of course, everywhere else, Maui, Hawaii, we're always balancing the local residents, the tourists, the second home owners, the vacation rental owners. So I know there's some bills that are considered, you know, hot topics. That's with the legislative session this year. Bill 121 regarding, you know, transient accommodation rentals. Can we talk a little bit about that where, you know, I think you talked about registering for all hosted rentals, right? Absolutely. And so there's a hosted rental and then there's a non-hosted vacation rental. So the non-hosted vacation rentals are the ones that are zoned for those resort areas. And the hosted rentals, which are those transient accommodation rentals, in fact, today, right now, they're having a hearing with our County Council. Our County was the most lenient when we passed that Bill, Bill 108 in 2019 of allowing, if you were in a residential area, not in the proper zoning, they grandfathered you in with the special use permit. And then they also made an exception saying, you know, if you live on property as the owner or you have a caretaker on the property, you can do a hosted vacation rental. And you don't even have to sign up for a permit at all. And so that's how it was all these years, where if you're in, you know, resort zoning, in that proper zoning, you had to fill out a permit. But if you lived on property, they just kind of left those homeowners, you know, they could just vacation rent, don't even have to apply for a permit. Now they want them to apply for a permit if it's less than 180 days. So that's interesting to see, you know, now. And I think maybe it's for the County to know how many of them do we have, right? Because they don't know how many hosted rentals there are, right? So if they start, you know, having them allow permits, then at least they know, okay, which homes are being hosted as vacation rentals. So it's very interesting because you still see a lot of those hosted rentals. Yeah, because that's only different from Oahu because so you're saying like, you're the homeowner and you have additional rooms, some space, you could just Airbnb it, do transit accommodation rentals. Yes. As long as your subdivision, your CCNRs allow it, there's nothing specifically in there. Yes, you can. And a lot of people have, you know, a downstairs unit or an Ohana, right, like or an ADU, right, which is almost like an Ohana same thing. That's what they do. Or they live in the Ohana and they'll vacation rent on Airbnb or VRBO entire home. And so that's what that's what's happening in our county was the most lenient of just letting them do that. And even if it's on ag land, or not the correct zoning, and they didn't have to even fill out a permit with our county. That's again, it's definitely a big change. I'm curious and I'm watching it, I think we all are in real estate and people that do vacation rent are watching it too, just to see, okay, what's the next steps that we have to take with our county. How's the reception been from that change? Like, I mean, how do people feel about it, you think? I think it's mixed. You have, you know, families that just live in a standard subdivision and they don't want the neighbor that's vacation renting, even though they're allowed to do it. And then you have, you also have a lot of families, you know, I mean, a lot of people that are in the middle class or their grandmother's on a fixed income and she's renting out the Ohana, right, or downstairs just to make ends meet. So you have that proud too that part of that, you know, posted vacation renting, and then you do have investors. So I think what's going to happen if they do pass this is those investors are now going to be forced, right, to go into the resort areas. Right, right. Yeah, my line. I wish we had more time. You are definitely a big island expert in real estate for sure. I mean, you are the go-to person and that's why you have all those great reviews, you know, online. I mean, we learned so much. So we appreciate you. And, you know, this is Will and Leonie on Think Tech Hawaii. We've been talking about the update for the Big Island Hawaii Real Estate Market with Laila Mbento of Hawaii Development Group. Thank you both and Mahalo everyone. If you enjoyed the show, please hit the like button below and please subscribe to our YouTube channel. Just look for Inside Hawaii Real Estate. Okay. Thank you so much, Laila. Thank you. Thank you. And Aloha. Aloha.