Kauai real estate continues to be a good market for buyers and no-so-good for sellers.  There has been a move back towards a balanced market from that of the prior 2 years.  Inventory continues to decline from its peak at the end of 2008 but is still double that at during the market frenzy of 2004 & 2005.

Absorption rates for the different market areas continues to decline with residential housing doing better than condos except in the Lihue zone where condos are actually in the green band signifying a balanced market..  The Lihue condo market is much more heavily weighted to residential than vacation use.  A significant exception to that is Kauai Beach Resort, which has seen such steep price declines that investors have swooped in and paid cash for distressed properties.

Kauai inventory continues to come down...

Kauai absorption rates are showing less stress than years past...

Additional Kauai sales information is available upon request. 

Jump to Kauai data

Kauai is the oldest, 4th largest, and furthest north of the Hawaiian islands. Kauai’s climate is tropical and world-class beaches include Poipu Beach Park and Hanalei Bay, honored as America’s #1 beaches in 2001 & 2009.

Richard Dolbeare is a Kauai real estate agent with Keller Williams Realty, the 2nd largest real estate franchise in the nation and a source of many buyer referrals.

He is the author of Kauai’s #1 real estate blog and is the Localism Community Leader for Poipu.  His Kauai community reviews include videos, descriptions, and sales data popular with buyers searching for homes on the internet. 

Richard is available by phone, text, email, or personal appointment.

Richard T. Dolbeare (RA)

Keller Williams Realty

(808) 651-4550

 Aloha@RichardDolbeare.com

www.KauaiRocks.com

ABR, CRS, e-PRO, RSPS, SFR, BS/MS

Living and working on the island of Kauai

Brokerage Contact:

Keller Williams Realty, 1819 S. Kihei Rd., Ste. D-110, Kihei, HI 96753, (808) 270-2900

May 2011  Market Update

Gradual and uneven progress in the housing market continues without government support. The market has shown remarkable improvement from the initial drop after the expiration of the home buyer tax credit this past July. Although higher-than-normal distressed and all-cash sales continue to skew the overall picture of home prices downward, inventory remains at pretax credit expiration levels. As economists anticipate rates at or above 6% by the end of 2012, buying activity is expected to continue its upward momentum. 

Increasing signs of inflation have been a recent item of concern. Driven by unrest in the Middle East, the retail price of gas has risen by 25% since the year began and 89% from this time two years ago. In his first ever press conference, Federal Reserve Chairman Ben Bernanke noted the Fed believes these price increases are transitory and will not have a major impact on the U.S. economy. However, according to NAR’s chief economist, for each $10 per barrel rise in oil prices, $80 billion is removed from the economy.

Bernanke stated that the Fed will keep a close eye on the impact of oil prices on the economy as it considers policy changes. Although inflation is up for the first quarter, price gains excluding food and fuel slowed in March, helping consumers to feel less constricted.

As the economy improves, stimulus efforts by the government and the Federal Reserve Board will gradually wind down, which typically spurs rising interest rates to keep inflation in check. Meanwhile, buyers continue to benefit from historically favorable buying conditions and sellers are encouraged by increased market stability.

Home Sales

in millions

Home sales were up 3.7% in March compared to the previous month but were down 6.3% compared to the same time last year when the impact of the tax credit was nearing its peak. Gradual but uneven improvement is expected to continue. In fact, home sales have increased six of the past eight months. The general trend of improvement remains a positive signal, as home sales remain up 32% since the low in July and are down only 12% since the peak last April, which was induced by the tax credit deadline of a signed contract by the end of that month.

Home Price

in thousands

Home prices rebounded 2.2% in March with median home prices rising to $159,600. This is 5.9% below the year-ago level and keeps the median price close to 2002 levels. Continuing February's trend, two out of every five homes sold during March, or 40% of sales, were distressed properties, which typically sell at a 10%-20% discount. The decline in home prices is less indicative of individual home values and more reflective of a large number of less expensive homes selling and bargains that are getting snapped up. Investors represented 22% of sales, and all-cash buyers were at a record high of 35% of sales in March. Prices and mortgage rates remain favorable for buyers for the spring selling season.

Inventory- Month's Supply

in months

The supply of homes measured in months on the market, if sales continue at their current pace, remained stable compared to the previous month. This is the third-lowest level since June. Inventory levels remain 33% below its peak of 12.5 months in July and only slightly above where it was last year when the tax credit was in full-swing.

Source: National Association of Realtors

Interest Rates

After rising above 5% for the first time in ten months in early February, rates have remained stable in the 4.8% range. They are still expected to follow an upward trend throughout the year. As overall economic recovery remains on track, rates will likely rise to keep inflation in check. Buyers wanting to capture the savings in monthly payments that a historically low interest rate affords are expected to move quickly to take advantage of excellent buying conditions.

This Month's Video

Topics For Home Owners, Buyers & Sellers

Staging is an increasingly important component, not only in selling a home but also in attracting would-be buyers. Even with all of the commonly accepted advantages of staging, only about 1 in 3 sellers stage their home.

• The average increase in list-to-sell in stages homes: 1.07%
• The average cost of staging: $250
• Potential benefit based on a $200,000 home: $3150

The Internet is one of the main sources of information buyers use during the home search process, and staging is key to showing the home at its best online.

Rooms that sellers stage most often:

1.  Living Room: 73%
2.  Kitchen: 64%
3.  Master Bedroom: 58%
4.  Dining Room: 49%
5.  Master Bath: 45%
6.  All Rooms: 37%
7.  Office: 16%

The cost of staging is minimal compared to the benefits: more showings and ultimately a higher percentage of asking price.   

A summary of Kauai real estate sales is shown in the charts below. The relatively low number of sales each month can cause the median sales price to fluctuate significantly. It is recommended that median sales price be viewed as what is selling and not an absolute measure of value of properties.

Additional Kauai sales information is available upon request. 

Contact Richard Dolbeare for information about the Kauai real estate market.   Kauai market updates and local events are periodically posted at his Kauai Real Estate blog.

About Richard Dolbeare

Richard Dolbeare is a full-time Hawaii Realtor® living and working on the island of Kauai since 2004.  He is an agent with Keller Williams Realty with important referral benefits from his affiliation with the 2nd largest real estate franchise in the nation.  Referrals from Keller Williams agents across the nation are a key source of leads for both buyers and sellers of Kauai real estate.

Richard is the author of Kauai's #1 blog hosted by the ActiveRain real estate network and is the Localism Community Leader for Kauai's Poipu area.  His Kauai Real Estate blog provides up-to-date information on the Kauai real estate market and local news.

For Sellers, Richard uses the proven triad selling solution emphasizing Pricing, Exposure, and Follow-thru.  The 2nd element, Exposure, is provided via internet marketing, direct mail, and open houses.

For Buyers, Richard offers his extensive knowledge of the Kauai real estate market and market trends.  His Community Landing Pages feature videos, descriptions, and sales data especially popular with buyers beginning their search on the internet.  His extensive collection of Kauai communities is available at .his Kauai Communities website.

Richard is eager to meet new clients and you are welcome to contact him by phone, text, email, or personal appointment.

Contact Information

Brokerage Legal Info

Keller Williams Realty, 1819 S. Kihei Rd., Ste. D-110, Kihei, HI 96753, (808) 270-2900

Brought to you by KW Research. For additional graphs and details, please see the This Month in Real Estate PowerPoint Report. 

The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed by local and national media, local real estate agents and other expert sources.  You should not treat any opinion expressed in This Month in Real Estate as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion.  Keller Williams Realty, Inc., does not guarantee and is not responsible for the accuracy or completeness of information, and provides said information without warranties of any kind.  All information presented herein is intended and should be used for educational purposes only. Nothing herein should be construed as investment advice.  You should always conduct your own research and due diligence and obtain professional advice before making any investment decision.  All investments involve some degree of risk.  Keller Williams Realty, Inc., will not be liable for any loss or damage caused by your reliance on information contained in This Month in Real Estate.