LIHU‘E — Kaua‘i home sales have reportedly been on the rebound since the beginning of 2009, and hope has not yet been shattered among those still brave enough to pursue the business of real estate on the island. While reports
LIHU‘E — Kaua‘i home sales have reportedly been on the rebound since the beginning of 2009, and hope has not yet been shattered among those still brave enough to pursue the business of real estate on the island.
While reports from Wall Street this week forecasted that the market may have already hit rock-bottom, indicating a break in the storm clouds for the housing industry, Kaua‘i has yet to see an end to slipping home values.
“We don’t have a crystal ball,” said Charlotte Barefoot, a broker for Aloha Island Properties, when asked if she thought Kaua‘i might have reached its lowest point and if sales would pick up again. “I’m optimistic though and I think we’ll continue to see improvement throughout the year.”
Debra A. Jason, a Realtor-associate (RA) and an accredited buyer’s representative (ABR) for Vision Realty, replied in a similar fashion when asked the same question, joking she’d have a line of people out the door if she could predict the future.
However, she did indicate that “things do seem to be picking up this year.”
Values of homes on the island continued to slide in February by over 38 percent versus the same month last year, yet buyers are still hesitant to make final offers, gambling for even lower prices, causing the number of residential sales to fall by over 56 percent.
“It’s hard to say where the bottom is, but nobody will know until it goes back up and you’ve missed it,” said Karen Agudong, president of the Kaua‘i Board of Realtors and president and principal broker for Aloha Island Properties.
Even though mortgage rates were at a 52-year low this week, according to CNNmoney.com, buyers are still hesitant to jump on the homeowner bandwagon.
Business has been improving since January, but not as much as one might expect given the very low interest rates, said Richard Garland, president of Kaua‘i Mortgage.
“I think that borrowers are still being cautious,” he said.
Patti Serdar, First Hawaii Title Corporation Princeville Branch Manager, said business has slowed down for her as well, though it remains fairly steady.
“It has evened off but I really feel hopeful about people starting to buy again,” she said. “It looks like there’s more activity going on, which tells me that I think other people are hopeful too.”
Because of the rapid decline in the real estate business on the island, many Realtors have gone on to other occupations and only the “very best Realtors are left standing right now,” Garland said.
“I remember when the market peaked, all of a sudden you had a big influx of people getting licensed and now I think we’re getting back down again,” Agudong said. “You really need to be active and really work 100 times harder in this market to stay in business. … We’re keeping our head up and moving forward.”
Despite the fact that residential median sales prices for the month of February were $408,549 compared to $662,500 last year, and the price of vacant land fell from $867,500 to $209,000, according to MLS statistics for Kaua‘i, those in the business remain positive.
“I’m optimistic because the interest rates are so great and prices are getting down to where people can start buying again and it’s a great time for buyers because there is a lot of inventory and more negotiation room,” Barefoot said.
Jason believes the key to selling a home now resides in pricing a property “just right” and not pursuing the same figures that were once seen when real estate was blossoming.
“A home needs to be priced right, clean on the inside, not cluttered and ‘at its best’ to be on the market right now because there is a lot of competition,” Barefoot said.
While the timing appears to be right for buying, potential homeowners are advised to be prepared for the financial commitment.
“Right now is an ideal opportunity because the mortgage rates have never been lower and prices are very low; that together makes it an ideal opportunity,” Garland said.
He also goes on to say that while the timing is right for buying, loans are becoming increasingly difficult to qualify for.
“By the same token, banks are making it very difficult to borrow because they are tightening up their requirements,” he said.
Requirements include a higher level of proof of income and assets, and a favorable credit score.
“Borrower’s credit scores are more important, much more than they ever were,” he said.
Agudong admits that houses are remaining on the market for longer periods of time than usual, as people either can’t qualify or are waiting for “the bottom” to hit.
According to Kaua‘i MLS, there were 624 single-family homes for sale on the island, 611 condos and 424 plots of vacant land as of Thursday.
In 2005, when real estate was booming, homes sold at a faster rate and could potentially be bought and placed back on the market for a higher price almost immediately, said Jason. Today, the same strategies don’t apply.
“You just can’t buy and flip like people used to,” Jason said. “People are buying with the goal of being there for a while now.”
She also said “more sellers are starting to be realistic” about their selling price, realizing they may not get back what they originally paid for a property.
Jason added that in 2005, one might only see two homes in Princeville sell for under $1 million, whereas now, most of the homes are selling for under $1 million, with many in the $400,000-to-$500,000 range.
“It’s fortunate right now for the local homeowners, in my opinion, that things are getting to a point now where they can afford homes and get back into condos and it’s a good time for them to look into things,” said Agudong.
“What I tell clients is, if you really love this home and you don’t like the price, make an offer on what you feel is a fair price for you,” Jason said. “The worst that can happen is the seller will say no.”
“There are great programs for first time home buyers right now and it’s got to be buyers that have their act together and are ready to buy and have their financial portfolio ready,” Agudong said. “They’ve got to be able to be wise and educated to be able to get into it.”
An educational and informational Housing Fair will be held June 19 from 5 p.m. to 8 p.m. and June 20 from 9 a.m. to 2 p.m. at the Pi‘ikoi Building in Lihu‘e.
For more information, visit the Kaua‘i Board of Realtors Web site at www.kauaiboard.com
• Coco Zickos, business writer, can be reached at 245-3681 (ext. 251) or czickos@kauaipubco.com
