Aloha Everyone:

Finding myself with a little downtime recently (Realtor translation "no business happening, not much to do") I  took the opportunity to send out a  personal e-mail to each of you (indeed, all 1200 of you)  It took me a bit of time (two months) and I got a wee bit of writer's cramp, but I am so glad I did it.  It was really great to hear how each of you are doing, catching up on new grandkids, new places to live, different jobs, etc.  You also shared with me some common concerns about the state of the economy, particularly your concerns about investing in real estate right now.  It was interesting to see how we all share a common humanity and very similar experiences.  Many of you are "hunkered down" trying to ride out this economic roller coaster we've been on.  I understand your concerns and hope things begin to stabilize for you all very soon.  Some of you have told me that you are coming back to the island sometime in the future and are serious about looking for some "bargains".  When you come, I'll be here to help you find them.  All in all, what I came away with is just a great feeling of gratitude for the warm responses and long thoughtful replies I got from so many people I've met over the years.  Sometimes this newsletter feels like a one-sided conversation with me doing all the talking.  It was nice to have you share and inform me a little bit about your world.  Thanks to everyone that responded to me.  And if you haven't responded yet, it's never too late.

 

Summer for Real Estate sales on Kauai was perfectly dismal.  I had optimistically predicted things would start to improve by the end of summer, but I have to admit to you all that I was wrong about that.  I was so wrong in fact that I've pledged never to try and forecast anything in the future, ever, ever again, period.    In my humbled state I've found this market has been a wonderful exercise in learning to let go of "control".  I'm starting to understand on a very deep level that control of anything is an illusion at best, and a source of debilitating frustration at worst.  Someone once told me "Do you know how to make God laugh?"  The reply: "Easy, tell him about your future plans".  The same could be said for poor realtors that try to predict the market.

 

The numbers... oh, the numbers.  Just when you were thinking it couldn't get any worse, it did.  Combined Real Estate Sales Volume in September was down 50% from last year.  That means basically we sold half the properties we did last year at this time.  Ouch!  Remember 2007 was pretty dismal as well.  Home Sales were down 45%, vacant land 35%, condos 72%.  Specifically for the North Shore, home sales volume was down 48%, zero vacant land sold so that was down 100%, and condos were down 79%.... .  Our combined YTD Sales Volume decreased about 1% from 38% YTD last month, to 39% YTD this month.  We moved deeper into the "Trench" as I like to call our current "extended bottom".

 

Number of Sales for all homes on the Island decreased 41% from last year.  A bright spot, vacant land was up 50%.  Condos were down 60%.  North Shore showed a 54% drop in homes sold and a 70% drop in condos sold, no vacant land sold at all.  Another small bright spot, our YTD Unit Sales actually improved from last month over one percent -37.26% for August 2008 YTD, and -36.78 for September 2008 YTD.  Northshore Units Sold number were quite a bit worse this month over last.  Only 3 condos sold in all of Princeville last month.  My little $442K Mauna Kai #25 listing was one of them... I'm embarrassed to tell you (but will tell you anyway) I actually buried a St. Joseph statue in the yard before I got the offer and even said a little Real Estate prayer that my listing would sell.  3 weeks later I was in escrow!  Go figure.  Maybe someone is listening up there.. A realtor can hope.  I went out and buried another just a few days ago at another listing.  I will keep you posted.

 

Median Sales Price numbers are a bit strange to interpret because we had so few sales so I'm not going to go to deep in them.  Only the combined numbers will make any sense and that's if we didn't have any McMansions selling this month.  Median Price for September 2007 was $672K, for September 2008 it's $525K, a 21% drop over last year.  The prior month (August 2008) the median price was $530K, so we dropped an additional $5,000, which probably isn't that bad.  It would be a drop of $60K over a year's time at that rate.  I think Sellers could live with that.  However, Buyers might yell and scream a bit.  

 

Elaborating on that point a bit, one common complaint I get from would-be Kauai buyers is that the prices here aren't dropping as much as on the mainland.  To that I reply Kauai is still a resort destination area, much like Pebble Beach or parts of San Francisco area.  It's different than a Sacramento, Houston or a Phoenix market.  Many of our Sellers have the means to wait out a bad market and aren't in a position where they must sell.  This is good and bad, since if you are buying you may not feel that you are paying rock bottom pricing, but it's good too because if you own here the prices aren't collapsing either.  Also, for whatever reason Kauai has one of the lowest foreclosure rates in the country.  Our daily paper's classified section is not bursting with foreclosure notices.  Hardly any, even on Sunday.  So tons of foreclosures are not driving down prices like on the mainland.  That being said, there are still some amazing deals happening right now.  Case in point, there was this beautiful little 3 bedroom house in Princeville, in a great area and in pristine condition.  The house next door just sold about a year ago for $1.1M.  This cute house came on the market at $899K.  I thought it would go very fast.  It didn't.  I showed it to anybody that would listen to me and that I could get in my car.  Nobody bought it.  It just recently sold after 6 months on the market for $760K.   Almost $150K below asking and about as much as some so-so condos might get.  I couldn't believe it!  That just goes to show when you have a motivated seller you can still score a great deal in Paradise.  Those sellers wanted to move off the island pronto and when they got an offer, they took it.  And the Buyers got a great deal.

 

To sum up, Real Estate wise, things are looking a bit bleak.  But looking at the positive, if you are in a position to buy, there is no better time to try to make a deal.  Sellers are scared too, and they might just take your insulting lowball crazy offer and thank you for it.  The time to buy is when no one else is buying.  Right now, NO ONE is buying.  That's the truth, and that's good news for you.  Also, interest rates remain at an all time low.  If you are moving here, I suggest you look into FHA loans with little or no money down.   It's my understanding that FHA does not look at your FICO, just your credit report.  So if you have low FICO, but a still a decent credit report you may qualify for a great loan.

 

So my thoughts are this, if life gives you lemons make a lemon chiffon chocolate meringue pie.  Laugh out loud at the stock market... It's only  a bunch of little numbers anyway.  Say as loud as you can "money smunney!, and mean it.    What's really important is how we treat ourselves and we treat each other.  All the rest is just fluff anyway.  Be kind, be nice, be present.  Tell your loved ones you love them.  Tell your stockbroker you love him too and then watch his reaction.  That's the real power in life.  Don't let these hard times get you down.  Be a champ.  Like all things, these times will pass, and how you handled them will be your only reminder.  

 

All the best until next month... your Island Realtor, AnnMarie