I have seen the cycles of real estate during my 19 years in the business, but never have I seen conditions like the present real estate crisis on Kaua‘i. A fairly good economy, combined with historically low mortgage rates have
I have seen the cycles of real estate during my 19 years in the business, but never have I seen conditions like the present real estate crisis on Kaua‘i.
A fairly good economy, combined with historically low mortgage rates have sent buyers on a shopping spree.
There have been no major developments to replenish the current supply.
These factors have driven up prices, first in the local residential market, and then in the condominium and vacant land inventories, as buyers explore alternatives to purchasing residences.
Our housing situation has worsened, as out of state buyers have also flooded the market. They look for investment alternatives to the stock market and make “quality of life” choices in light of the world events since 9/11.
The critical shortage is in the “affordable” range, which was probably $150,000-$200,000 two years ago. As of this writing, there are six houses for sale on Kaua‘i under $300,000.
The lowest priced residential home on the island is a 50 year-old “fixer-upper” on a private, unpaved road, priced at $250,000.
There is no easy fix for the housing problem, as it will take a cooperative effort between local government and private developers to provide an inventory of affordable housing again for our residents.
Our county and state government bodies need to find ways to partner with developers who are willing to provide affordable housing for island residents. Expedited subdivision processing, reduction of “”fees”, and assistance with infrastructure construction are just a few ways government can help developers who are willing to hold prices down and offer first purchase options to residents.
While condo living was not an option for most home purchasers a decade ago, residents now have accepted that this may be the only type of home ownership option available.
This being the case, more condos with amenities like covered parking, mini yards, screened lanais, and ample storage would appeal to the local buyer. As a real estate professional, who has served primarily local clientele for the past two decades, it is a troubling time for me. This is no longer the time, nor place for Kaua‘ians to realize their dream of home ownership.
