Paul Brewbaker presented his assessment of the Kauai housing market to the Kauai Board of Realtors general membership on Friday, June 27, 2014. Mr. Brewbaker is the renowned Hawaii economist with a unique talent for blending humor with economical data. Some of his key points were:
The typical economic expansion is 8 years and we are at year 5 (3 more to go?) The most we have seen is a 10-year expansion. While this sounds like a positive outlook for the next few years, he did have these concerns.
- Federal spending is down 4.5%
- Tourism is down to 1998 levels
- Construction is down
- Effort to shut down seed corn business is ongoing (corn is Kauai's #1 agricultural product)
Mr. Brewbaker says Kauai available rooms are the same as 10 years ago. This holds down the number of visitors and opens the door for increases in rents.
Population growth is down on the neighbor islands and up on Oahu showing a trend of people moving to the cities.
Don't expect the so-called "shadow inventory" to come crashing in. Foreclosures themselves are back to normal levels.
The Hawaii real estate markets used to be out of sync with mainland markets, for some reason they are now synchronized in the ups and downs.
Kauai unemployment is going down but not because there are more jobs, rather there are fewer in the labor force.
I will follow up with another posting once the presentation slides become available.
Aloha,
Richard
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