LIHUE — Kauai realtor Sean Ahearn said it’s a buyer’s market here on the Garden Isle.
“If you look at what you can buy on Kauai versus what you can buy on Maui or Oahu, I’ve had people who looked on Maui and come here and commented about how a similar property seems to be less expensive,” Ahearn said.
Because of low interest rates and a decent amount of inventory, Kauai is undervalued, compared to the Neighbor Island market, Ahearn said.
“Whereas the typical home loan in 2008 was in the mid 5 percent range, qualified borrowers today find local lenders offering loans in the mid 3 percent range,” said Hannah Sirois, Kauai Board of Realtors president and principal broker for Kauai Heritage Properties. “Buyers are recognizing the compound savings.”
According to data from the Hawaii Information Service Market Statistics, there was a 19 percent spike in the number of residential properties sold on Kauai in 2016 compared to last year. The same time period of last year, 226 homes were sold.
“Buyers have been incentivized to jump into the market by the access to a reasonable supply of inventory, price competition, drop in the price of oil which leaves more money in our pockets, and the overall access to historically low interest rates,” Sirois said.
The median sales price for homes on Kauai is also down from last year, currently sitting at $600,000 compared to $620,000 in June 2015.
Although Kauai is slightly lower than Maui, it pales in comparison to the Big Island, which as a median residential price of $371,500.
In the Princeville area, Ahearn said, families aren’t buying homes.
“Most of the buyers tend to be, in my experience, retired couples that are looking to retire here, more apt to have a second home or have a second home they can vacation rental,” he said.
But it’s the opposite for Julie Black, owner and principal broker for Kauai Dreams Realty.
“Recently I’ve had more locals buying and people moving here to buy permanently, versus second homes and vacation rentals,” Black said. “It’s super competitive right now for the lower condominiums and homes. My advice for the locals is to keep pursuing it.”
Sirois also points to a local buying trend.
“The trend holds true today with a slight uptick for year-to-date 2016 with 63 percent of all condo sales conveying to local buyers,” she said. “Single family residential numbers are even more impressive with Hawaii buyers capturing 72 percent of all residential sales in 2015, and 60 percent of all closed residential transaction thus far in 2016.”
According to the report, the Westside has the lowest median priced homes on Kauai at $360,000, which is down $40,000 from last year.
“There’s more inventory on Westside than anywhere else,” Black said. “If you’re looking at $450 and below, there are more buyers than sellers at that price.”
Black said there is more of a demand to purchase homes in the Lihue area even though homes are cheaper on the Westside.
“I think it’s combination of lack of jobs, the long drive and the weather (on the Westside),” she said.
The median home sale price in Lihue increased slightly to $497,500 from $477,000 last June.
If homes are too pricey, Black said, condominiums are an alternative for some buyers.
The median price for condos is marked at $385,000, which is about $240,000 cheaper than purchasing a home.
Even with an increase in the number of homes sold, Ahearn said, new homes aren’t being built.
“What we don’t have necessarily is new inventory. If you wanted a new home, that would be hard to get,” he said. “A lot of homes need updating and people don’t want to deal with that, it seems.”
As of July 22, there were 388 residences for sale on Kauai, Ahearn said.
There is, however, a discrepancy between the median sales price of homes on the market and homes sold.
“It’s hard to quantify Kauai as a whole because it’s a mixed bag of properties,” he said. “You have agricultural estates, homes in Kilauea, Princeville residences that can be vacation rented, homes in Haena and Hanalei — some have Transient Vacation Rentals, some don’t.”
Numbers from the last 12 months indicate the median price for homes currently on the market is $1.155 million with the average price at $2.2 million.
During the same time period, the median sale price for homes sold was $499,000 with an average price of $798,000.
“You can see the disconnect on what was sold and what is available to sell,” Ahearn said. “The inventory on the lower level is low, but there’s more of a supply in the higher level.”
Black is still encouraging residents to buy.
“Owning your own home is the No. 1 investment that people should make,” she said. “They should look into buying for their future, for their family, for their investment.”