LIHU‘E — Residential sales gained momentum on Kaua‘i in October compared to last year, according to Multiple Listing Service sales statistics. “October was an unbelievable month; it was a frenzy,” said Aloha Island Properties President and Principal Broker Karen Agudong.
LIHU‘E — Residential sales gained momentum on Kaua‘i in October compared to last year, according to Multiple Listing Service sales statistics.
“October was an unbelievable month; it was a frenzy,” said Aloha Island Properties President and Principal Broker Karen Agudong.
Though year-to-date home sales are still down by more than 19 percent in comparison to 2008 for the island, Agudong said she knew last month would increase, as every real estate agent she spoke with in October was “very excited and very busy.”
The uptick in sales could largely be linked to the $8,000 first-time homebuyers tax credit which is tentatively set to expire Dec. 1, she said. Since it takes about 45 to 60 days to close escrow, the push to meet deadline was October.
Principal broker for Kaua‘i Landmark Realty Phil Fudge agreed that the “major reason” residential sales were up nearly 40 percent in October compared to 2008 is due to the tax credit. But, what is really “driving the market” right now are short sales and foreclosures, he said.
Reduced selling prices on top of low interest rates have inspired new property owners and investors to want to dip their toes into the market, Fudge said.
Residential values declined more than 13 percent last month compared to October 2008 and almost 25 percent year to date, according to MLS.
Homes ranging from $400,000 and lower are “what we are seeing,” Agudong said regarding what buyers have generally been purchasing.
Mayor Bernard Carvalho Jr.’s Executive Assistant Beth Tokioka said real property assessed values for Kaua‘i County are “clearly on a downward trend,” according to the county’s finance director.
Rates are also expected to continue to linger at all-time lows, as the Federal Reserve announced Wednesday that they would be keeping “a key interest rate at a record low for an ‘extended period,’” according to the Associated Press. The Fed also told the AP that even though the housing market has strengthened, rising unemployment and stricter lending could potentially hold back an economic rebound in the coming months.
“Lenders are still holding tight with their money,” Fudge said. “Banks are putting well-qualified people through the ringer.”
But, for those who can financially qualify, Agudong said the first-time homebuyers tax credit could be extended beyond Dec. 1.
It was announced late Wednesday afternoon that the U.S. Senate voted to renew the government’s $8,000 tax credit another six months, according to The Washington Post. The program is estimated to come with a hefty “price tag” of around $10 billion, the article says.
While Agudong said business is not as “frantic” as it was in October, and certainly not as slow as it was during the summer months, an extension could encourage more virgin property owners and others who have not bought a home in the past three years to pursue finding new primary residences.
Kaua‘i Chamber of Commerce President Randy Francisco said the tax credit, along with more affordable home values, could give the younger generation of island residents the hope to “someday own a place of their own.”
“It gives them a bit more incentive to want to make roots and buy a place,” he said Wednesday.
Tokioka agreed.
“We certainly hope that the decrease in real estate prices will allow more first-time homebuyers to enter the market,” she wrote in an e-mail via county spokesperson Mary Daubert Wednesday.
For more information visit www.federalhousingtaxcredit.com.
• Coco Zickos, business and environmental writer, can be reached at 245-3681 (ext. 251) or czickos@kauaipubco.com.
