Aloha Everyone:                                                    

 

It's deep in the heart of winter on Kauai.  The windows are still all open in my house but I added an extra blanket to my bed and I'm wearing pants more than dresses these days.  It's still just sandals on my feet though.  If I don't get my dogs down to the beach for the evening walk by 6:00 it starts to get dark on me.   The water has been a bit chilly and  I haven't gone in  weeks.  It's probably a ghastly cold 75 degrees.   I'll wait until it gets back up in the 80's.  The sun is still setting behind the mountains over Hanalei Bay.  We can't watch the sunset anymore from the hotel as the hotel is closed now for renovations as it transforms into the ultra ritzy 7 Star St. Regis Hotel..  The whales are back but I haven't seen any.  The albatross are nesting and laying their eggs which will hatch early spring.  Soon we'll see the strange but familiar sight of the baby hatchlings peeking out over the grass.  Their little gray fuzzy heads in stark contrast to their parents glossy smooth white ones.  In a few months they will begin their determined but awkward endeavor to fly as they spread their newly formed wings and run as fast as they can over and over, falling and bumping.. until finally, they become airborne, leave the nest and flying out to sea for the next five years after which they will return to Kauai to mate and start the cycle anew.  When the whales are gone, winter will be gone as well and spring will be arriving on the Island.

 

Okay that was lovely, but now tell me: how do you transition from that beautiful scenario to real estate statistics?  Uh... how about this ..

 

So like the baby albatross and the whales, real estate has a cycle too.. not nearly as lovely as nature, but alas it's a cycle all the same. So speaking of natural cycles, what did the Kauai year end of real estate statistics show us?  

 

Looking at Median Sales Price..2008 ended with a thud, not a bang.  The median residential price ended at $495K down from $615K the month before.  Ouch!  That's 21% less than December 2007's price of $625K.  Vacant Land was down 24% from the year prior.  Condos show an increase over last year $430K vs $625K.  Locally, homes on the Northshore took a small drop over last year's $885K (Dec 2007) vs $862K (Dec 2008) and condos showed huge improvement ($472K vs $722K this year) although condo sales are still way down.  East side homes dropped dramatically from this time last year $640K vs $432K (Dec 2008)  (32% drop) with 5 and 6 sales respectively.  The YTD home sales price dropped 5.38% from the year prior.  YTD Vacant Land prices dropped 20%, and condos dropped 4%.  On the North Shore our YTD homes sale prices dropped 12%, condo prices and vacant land prices remained flush (maybe that's why they aren't selling so many).  East side homes YTD median prices dropped 11%, vacant land 34% (maybe that's why they ARE selling) and condos gained 10% (although still not selling ... much).

 

Sale Volume in a word:  deplorable.  We are down 67% from last year's Residential volume numbers at this time, and down 36% for the YTD total.  Vacant land down 58% for the month, 45% for the year.  Condos down 40% for the month, 48% for the year.  On the North shore house volume sales down 81% from this time last year, and 41% worse between 2007 YTD numbers and 2008 YTD numbers.  Northshore condos show 23% down from Dec. 2007, and 46% down for the YTD.  North Shore vacant land showed a 55% percent drop from last year at this time, but only a 26% YTD drop.

 

Okay, now units sold: We showed a 38% drop in home units sold between last year and this year.  Vacant land down 33%, condos down 31%.  On the North shore, homes showed a 60% drop over last year this time, vacant land a 33% drop and condos a 33% drop.  Units sold improved in Lihue by about double, and units sold held very steady for the east side over last year's numbers.  For the YTD numbers homes on the entire island are down 30% over 2007, vacant land is down 37%, condos down 43%.  For Poipu/Koloa the numbers were even worse .. over 45% worse for all major categories.  Vacant land in Lihue actually showed a 22% increase in YTD sales.  East side houses only showed an 8% drop over last year's YTD.  Total home sales on the North Shore showed a 33% drop over 2007, condos showed a 39% drop, and vacant land showed a 18% drop.

 

If I look at the YTD Unit's Sold over the last 6 months or so, it appears that although the numbers are horrible, they are not getting any worse compared to the year before.  For example the Units Sold YTD for house on all of Kauai from June are as follows:  June -39%, July -36%, August -31%, Sep -32%, Oct -29%, Nov -30%, Dec -30%.  Condos are not fairing as well as houses and looked like this: June -33%, July -35, Aug -39%, Sep -40%, Oct -44%, Nov -43%, Dec -43%.  Vacant land June -44%, July -44%, Aug -45%, Sep -41%, Oct -37%, Nov -37%, Dec -37%.  So at least for homes and vacant land  the numbers got better in the last 6 months, condos got worse.

 

Taking this a bit further, let's look at YTD Sales Volume for homes:

June -45%, July -42%, Aug -36%, Sep -37%, Oct -36%, Nov -34%, Dec -36%.  So you start to see a little traction at the end there.

 

Median sales prices have gotten stronger on the North Shore, stayed very stable in Poipu/Koloa and Lihue area, and dropped a bit on the East side.  

 

If you are thinking about buying but waiting for a sign the market has hit bottom, you run the risk of waiting too long and missing out on some great bargains.  The trick is to find the motivated sellers who have some equity left, and then have 2 or 3 other homes you like just as well.  If the first one doesn't want to negotiate, you move on to the next one.  Don't pass up the opportunity to snag a great interest rate either.  Looking again at prices and interest rates:  prices could continue to drop but if interest rates rise, it negates it.  If you buy the house of your dreams for $500K at 5% interest your payment is about $2,083.  If you wait and wait, and by some miracle your house gets reduced to $400,000 but the interest rate goes up to 6% interest, the payment is only slightly less at $2,000 so Chop! Chop!  This amazing buyer's market is not going to last forever.  Get on board!

 

Your Island Realtor, AnnMarie