Aloha Everyone!

 

If you are reading this you've survived the recent election coverage AND the stock market's bi-polar meltdown.  You're one tough trooper.  Congratulations..  

 

We all seem to be in the same leaky boat this days, tossed to and fro on the economic high seas.  Money's tight and people are being bombarded with more bad news every night on the news.   It's gotten so ridiculous lately I expect Katie Couric to announce any day now... "Good Evening Ladies and Gentlemen.. Katie Couric here.. welcome to the six o'clock news.. this just in...at 7:00 am next Thursday EST, leading scientists have predicted that the world will stop spinning ..our financial  news experts say this will probably have a negative effect on consumer holiday spending.. in other news ....Santa Claus has announced his permanent retirement, no immediate successor has been named... there are speculations that Christmas may be cancelled this year."  Good grief!  Enough Already!

 

But seriously, I had to resort to disconnecting my cable TV to try to find some peace from all the craziness.  It helped.  I actually started to get some sleep.  I recommend it to everyone.  I figure if it doesn't make CNN's home page, I don't need to know about it.

 

Real estate wise, the poopie news continues.  October tends to always be a dismal month.  It's sandwiched between summer and the holidays, two of our busiest times.  It doesn't have a chance.  As I crunched October's numbers,  I did find some interesting information that gave me pause.  You know me though: never one to speculate. I'll let you make up your own mind:  Here are the numbers for October:  

 

Total Sales Volume of homes decreased on the entire Island considerably from $18.8M in September 2008 to $12.5M for October 2008.  Vacant land also decreased.  Condos actually increased, $3.7M for September to $4.3 for October... Yeah! a little win for condo sales volume.  Most of those condo sales were older oceanview condos that sold in Poipu. Poipu has been performing well lately.  Overall Poipu sold $4M in homes, and $3.7M in condos but very little vacant land.  Northshore Sales in October were as follows:  $2.97M in sales for homes, and unless I need glasses it looks like the only condo that sold all month was one little $435K jobber.  Oh my.

 

Another interesting trend, the Sales Volume for homes Year to Date is getting smaller.  That may be significant because it appears in the Home sales category we are actually "gaining" a little ground on sales overall each month over last year.  In other words we are very slowly beginning to close the gap between the difference on how many homes sold by this date in all of 2007 and how much we've sold by this date in all of 2008.   It's a very small difference however, just a little more than 1/2 a percentage point (-36.70 for September YTD vs -36.15 for October YTD) but it's something...  Bad news is that we are still losing ground on condos and vacant land every month.  The gap for those is continuing to get worse.  This doesn't surprise me.  Those areas will no doubt follow the houses in the recovery since they are more "investment" type properties and are less desireable to buy when money is tight like now.

 

The "Number of Sales" stats are the star this month so pay particular attention to this part.  We sold virtually the same amount of houses on the island in October 2008 as we did in September 2008 (22 vs 21).  Vacant land same thing ((12 vs 11) and condos same thing (8 vs 8).  Now what do you think that means?  One thing you can gather is that prices (Sales Volume) is going down, and Sales (Sales Units) appears steady.   We sold virtually the same "number" of units as we did last month (and in some markets we sold more, ie, East Side) but for less "volume" of dollars.  I think this is a trend we may continue to see as the market stabilizes.  Of course, October is just one month, so we need to see this trend to continue for 2 or 3 more months to call it really significant.  Once Sales Volume stops going the other direction I think we will have seen "The Bottom".  When it happens it's going to happen fast, so perhaps better to buy sooner on the downslide than the upslide.  It could possibly be like a snowball effect once the word is out and people that have been waiting all pile back in to the market at once.  Good for me.  Bad for you (if you're buying).

 

In other good news (for me) our YTD numbers for homes (number of units)  are decreasing as well (-32.94% for September vs -29.94% for October)  We're closing that gap as sales for homes are picking up..  We are also closing the gap for vacant land in this category (-40.76% vs -36.75%).  For condos, sales are still getting worse by -3.5 percentage points from September to October.  I'm not sure when the recovery for condos will happen but it doesn't look promising at the moment.  At these numbers I can't see how condos can do any worse, but somehow they're managing to do worse.. against all odds.  The unit sales numbers for all categories remain very low for the North Shore.  In October 2008 we sold 3 houses, 4 vacant lots, and 1 condo.  The month prior was just as bad.  We sold 5 houses, zero vacant land, and 3 condos.  To give you a comparison, in a peak year such as 2005, we sold 18 houses on the north shore and 15 condos.  So we are about 70-80% below our peak.  One interesting note is that the East side (Kawaihau District) which includes all of Kapaa is doing quite well.  The numbers for this area are as good or better than last year's numbers.  Amazing, huh? Why the difference?  Simple. It's cheaper to buy there.  You can find homes in the $400's and land is still a good deal there so people are buying.  Especially local folks who have been waiting patiently for a $400K to $450K home. With an FHA loan they are getting into them with 3% or less down and great interest rates.  

 

Median Sales Prices for homes dropped $5K in October from September ($525K vs $520K)  That's digestable.  Overall October's Home prices are down 20% from last year's.  Median Condo prices are down dramatically from $436K in September to $351K in October.  Look at this: Home prices for Koloa/Poipu and the East side are UP about 10% over last year.  North shore had 5 home sales in October and those 5 home sales show an increase in Median Price of 42%.   The reason for this big spike is two higher-end listings that sold for over $1M.  These type of listings are commonly called "Gentlemen's Estates" and consist of a house on acreage.  These have been hit particularly hard during this downturn, so it appears they may be getting down to the price where they are also starting to move as well. Ever the spoiler, condos showed a predictably miserable 42% decrease in sales price, from $755K last year to $435K this year.  North shore vacant land showed a similar spiky trend as homes.  The four lots that sold in October sold for a 42% increase in sales price over last year's lot sales.  One north shore lot that sold in October was priced at $2M and sold for $1.2M to an enterprising all cash buyer.  Right now tere are some folks out there picking up some deals

 

So that wraps it up for this month.  Many of my clients are telling me 2009 will be the year they buy.  I still have a few that are expounding more doom and gloom to come.  Who will be right??  Cast your vote and let me know what you think.  If you are wrong, that will make us even since I've been wrong a few times.  And if you are right, well..I'll buy you a super large shaved iced when you come to Kauai next time.  Yah, I know,...big spender.

 

On a side note I would like to plug a few local folks that do work on the North Shore that could use a little extra work during this slow economic time:  If you need any remodeling done on your Kauai property such as tile work, cabinetry, flooring, painting etc. please Phil Bonde, of Kauai Home Remodeling.  He's honest, hardworking and affordable and can be reached at 808-652-4477.  Also, if you need any plants for your home or acreage, David Breen of Lotus Farm and Nursery will take care of all your planting needs with a smile.  He can be reached at 808-828-1871.  

 

Also, if you are planning a trip to the Island please let me know you're dates of travel and if you would like to view some properties while you are here.  I'll save all the good deals for you if you let me know what you are looking for.

 

Until next month, Aloha from your Island Realtor, AnnMarie Hamilton.