KAPAA — A move to finalize purchases of residential housing in the latter months of the year are among the reasons for an almost doubling of sales on the Garden Isle in November.
“There is a big push historically to close by the end of the year — sometimes for tax purposes,” said Julie Black, principal broker and owner of Kauai Dreams Realty.
The holiday season is another factor for added sales.
“I also find the closer we get to Christmas, the busier it gets,” Black said. “I think that’s from people coming over from the cold winters. They’re already planning to be here. They want to be here for Christmas, but they’re planning to live or buy over here.”
For the month of November, Kauai saw 61 residential sales — a 96 percent increase from the 2015 mark of 31 sales, according to Hawaii Information Service.
While prices are increasing, local buyers are entering the market, said Hannah Sirois, Kauai Board of Realty president.
“In this case, we hope that buyers understand that flexibility can be a friend,” she said. “Elect to look at other regions where supply is available or consider whether a condominium purchase meets the housing need.”
The overall median sales price in November is $598,000, up from $585,000 last year.
“At the end of the year, people are looking where to invest their money, so they don’t have high tax the following year,” said Karen Ono, Kauai Board of Realtors executive officer. “That’s why they invest in property instead.”
The Kawaihau area saw the largest number of residential sales with 22, more than doubling the 2015 mark of 10.
Black said the Kawaihau area is popular with residents because of affordability.
“For what you get for your money, a (similar) house here would be more in the North Shore,” she said.
Sales volume in November also trended on the upslope.
The Garden Isle saw about $84 million in sales in November, up from $29 million in 2015.
The largest bulk of sales occurred in the Hanalei area, which saw sales volume of $48 million.
“We understand and acknowledge that there are parts of the island, such as the North Shore, where there is a distinct lack of both affordable and moderately priced inventory for sale,” Sirois said.
The majority of her customers in November were residents, Black said.
“For our company, sales have been for people to buy homes to live in,” she said. “A couple of my sales have been people on the mainland, but have been living here for a while. A few of them are people who live here.”
Though number of residential sales have more than doubled in November, Black said the island’s inventory is low.
“Where figures have come up 300 percent in Waimea, it’s still not a huge number because it’s not like we had a 100 sales and it went up 300 sales,” Black said. “If you look at the actual number of units, it hasn’t been a big inventory to begin with.”
Ono added: “Prices will increase because there’s no new stock.”
Historically low interest rates are another factor for increased number of sales, Sirois 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,” she said. “Buyers are recognizing the compound savings.”