LIHU‘E — The housing bubble on Kaua‘i has popped, but not quite like it did in places such as Las Vegas or Phoenix where “they just ate it,” TZ Economics Principal Dr. Paul Brewbaker said at Thursday’s Kaua‘i Board of
LIHU‘E — The housing bubble on Kaua‘i has popped, but not quite like it did in places such as Las Vegas or Phoenix where “they just ate it,” TZ Economics Principal Dr. Paul Brewbaker said at Thursday’s Kaua‘i Board of Realtors general membership meeting and educational forum.
“I’m still scratching my head on that one,” he said. “Those guys are in shell shock.”
While the 50th state “proved” to have less of a “Bubblicious housing market,” Kaua‘i experienced a burst more comparable to California than O‘ahu, according to Brewbaker.
The island “does not seem to have an inventory overhang like most distressed Mainland markets,” he said.
Home sales increased around 76 percent last month on Kaua‘i compared to June 2009, according to Multiple Listing Service. Meanwhile, median home values fell more than 1 percent, the statistics say.
“It’s not uncommon for sales to pick up while home prices still fall,” University of Hawai‘i Associate Professor of Economics Dr. Carl Bonham said Friday.
In June, there were 37 residential sales as opposed to 21 last year, according to MLS statistics. And the median value of homes last month was $405,000 compared to $410,000 in June 2009.
Similar statistics were reported for the number of sales during the second quarter, according to MLS. A more than 71 percent increase in sales was recorded in 2010 compared to last year and median home values slipped some 10 percent.
Increasing sales are a good indicator of “what’s going on in the economy” since purchasing a home requires stable income, Bonham said.
During the mid-2000s, people could never afford to buy a home, he said. “It was too expensive for a shack.”
But now prices have dropped some 40 percent, he said.
Prices and mortgage rates are attractive to buyers right now, Bonham said. “People are starting to worry about missing the bottom.”
Plus, the longer one waits to purchase a home at this point in time, “the more you risk rising rates,” Brewbaker said.
“Go grab some of that action before it goes away,” he said. “The low rates are not going to last forever.”
Still, “it will be interesting to see July and August” real estate statistics, especially after the sales linked to the first-time homebuyer tax credit are completed, Bonham said.
For more discussion about the current economic climate, see the Business Week section starting on C1.
• Coco Zickos, business and environmental writer, can be reached at 245-3681 (ext. 251) or czickos@kauaipubco.com.
