Is real estate slowing down?

Despite the fact that sales volume and number of sales of Kaua’i residential properties changing hands are both down for the first two months of this year compared to the same period in 2005, the number of overall sales for the first two months of this year, and the overall sales volume, are both up compared to the same period last year.

And, while the market is sending the mixed signals of some price reductions and properties lingering longer on the market than they may have last year, the median sales price of a Kaua’i home leaped by over 20 percent for the first two months of this year compared to the same period last year.

The median price of a residential property sold on Kaua’i during the first two months of this year was $649,000, up from $537,500 for the same period in 2005, according to Multiple Listing Service figures supplied by leaders of the Kauai Board of Realtors.

So, is the Kaua’i real estate market slowing?

The answer, probably, is yes and no.

Yes, but probably only momentarily, say some analysts.

No, just the cyclical, start-of-the-year slowdown, others say.

“Oh, yeah,” it’s slowing down, said James Pycha, owner and broker of RE/MAX Kauai, a proponent of the beginning-of-the-year, cyclical slowdown he’s seen just about every year of the 25 he’s been in real estate on the island.

“There’s a lot of price reductions,” he also pointed out.

But he’s sure the early-year down trend is a cyclical thing. “Historically, most of January, all of February, and most of March” sees a slowing down in sales activity on the island.

“At the end of any kind of significant price run-up in any market,” there’s a leveling off, which makes sense now following the 2005 last-quarter run-up, he said.

“You can see price reductions, quite a bit now, more than before,” said Karen Ono, executive officer of the Kauai Board of Realtors.

There is still a finite amount of inventory, with lots of development planned, but not a lot of new or existing homes coming onto the market, she said.

The numbers themselves do not allow much of a definitive answer to the question about real-estate activity slowing on the island, as drops in the number of residential properties sold during the first two months this year are more than offset by increases in condominium sales, primarily a jump in Lihu’e-area condo sales to 53 for the first two months of this year compared to 15 for the first two months of 2005.

And while sales volume was down for the first two months of this year in the residential market compared to the same period last year, again strong condominium sales, nearly doubling from $28.2 million in the first two months of 2005 to $53.4 million in the first two months of this year, pushed year-to-date overall sales volume up nearly 10 percent, to $154.2 million in 2006 compared to $140.5 million in the first two months of last year.

The median sales price increased for the first two months of this year compared to the same period last year in every category except condominiums. For vacant land, the median sales price moved from $400,000 last year to $575,000 this year.

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