Kauai real estate markets

The Kauai real estate market continues to struggle with a foreclosure rate well above the national average and the median rate for the state of Hawaii. Although the rate of home sales on the Garden Isle increased somewhat in the most recent tracking period, the median price for both single family homes and condominiums on Kauai fell by double digits. According to the Honolulu Star Advertiser, the level of foreclosures in the state of Hawaii declined relative to other states in a nationwide survey of foreclosure rates, but still increased relative to year-over-year levels. A real estate research firm reported that there were 1,271 foreclosure filings against various types of properties in Hawaii during the month of October. That was a thirty-seven percent increase from the 925 filings seen in October 2009, but thankfully represented a decline from the 1,600+ filings seen in both September and August 2010. With this new shift, Hawaii is no longer in RealtyTrac’s top ten states for foreclosure filing rates. It had edged its way into the top ten after reaching 9th in September. It is currently at 12th out of the states that RealtyTrac was able to collect data for. For the entire state, the filing rate was equivalent to just over one foreclosure per four hundred properties, while the prevailing national rate was one filing per 389 homes. Nevada had an abysmal one foreclosure per 79 homes, while Vermont had only one filing per 14,210 homes. Some economists have suggested that Hawaii is substantially behind the curve of recession and recovery, whereas other markets sharply collapsed and rapidly recovered. Until about a year and a half ago, Hawaii had one of the lowest foreclosure rates in the nation. Hawaii homeowners still have to deal with poor unemployment rates, property value adjustments, high mortgage payments, and an unstable economy. On the island of Kauai in October 2010, there was one filing per 320 households, based on 93 filings.

The contrasting trajectories of median prices and sales volume were mentioned in a December 6, 2010 report from Pacific Business News. Although November sales statistics for the Outer Islands showed a slight decline, the year-to-date figures painted a distinctly different picture. With just one exception, the volume of sales increased significantly, while the median sales price of these properties declined. The Realtors Association of Maui and the Hawaii Information Service released numbers indicating that for the first eleven months of 2010, the number of single-family home sales increased by more than twenty percent on Maui, Kauai, the Big Island, Lanai, and Molokai. On the Garden Island in particular, condominium sales were up a full fifty percent compared to year ago (2009) levels. The statistics indicated that the increase of Kauai condo sales was driven by sales in Lihue, where the volume of sales rose by more than thirty-five percent. With the exception of single family homes on Kauai, where the median price rose five percent compared to year-ago levels, prices fell in every other Outer Island Market. The most substantial declines were on Maui, where condominium prices fell by an average of eighteen percent, and on Kauai, where the median sales price dipped by twelve percent from about $393,000 to roughly $346,000.

Both luxury properties and public housing projects have run into trouble during recent economic woes, according to Kauai’s newspaper, the Garden Island. Half a dozen luxury properties were recently auctioned off at sharply reduced prices, after the owners of the properties ran economic woes associated with the economic downturn. More tellingly, five of the properties had been on the market for months without attracting the interest of buyers, necessitating the auction process. These properties were found on Kaua‘i’s North Shore in an exclusive subdivision known as Mali‘e Wai. The other property was found in Secret Beach on Kauapea Road in Kilauea. All six of the properties were auctioned off by a New York-based company. The half-dozen properties, which were once valued at approximately thirty million dollars, sold for a collective price of $8,626,750. Even an affordable housing project in Waipouli has been unable to sustain development, leading the company to petition the County Council for changes in its housing agreement. The Council approved the amendment, which would allow the company to rent half of the properties on the open market. It also allows the company an option to sell the property on the open market as opposed to simply renting them.