ELEELE — Many Kauai residents may not be able to afford homes here, but Realtors said out-of-state residents are buying.
“Some of the buyers — 50 percent of them — already live on the island and the other 50 percent are people who have relocated,” said Julie Black, principal broker and owner of Kauai Dreams Realty. “With us, it’s been half-half. Our buyers are people who live here already. It seems like although we had a couple of investor buyers buying property, fixing them up and reselling them.”
For the month of May, the median sales price of a home on the Garden Isle was $752,500, an increase of over $240,000 from the same period last year.
The median home price is up because 11 out the 52 homes sold in May were over $1 million.
Karen Ono, executive officer for the Kauai Board of Realtors, said inventory is low, which is driving up prices.
There are currently 301 residential and 250 condo listings on the island.
“This is where we need housing on the island,” Ono said. “If we don’t get inventory, the prices will get higher and higher.”
Habitat for Humanity is trying to help.
Families in the very low-income bracket qualify for the program that involves constructing their own home that runs between $211,000 and $223,000.
To be considered very low income, a household size of one must make between $17,250-$31,800 a year, according to the USDA. For a family a four, the total household must make between $27,950-$45,400.
Josh is a full-time general cleaner who works the graveyard shift to feed his family of five.
Josh, who declined to give his last name, says purchasing a house on Kauai is out of reach for most locals.
“There’s no way to afford homes,” said the Koloa man.
After a random lottery and a three-year wait, Josh and his family were selected for a home about a year ago and started construction in February.
“This gives us locals a chance at our piece of Kauai without forcing us to go Mainland,” said the 27-year-old. “It’s pretty fortunate we have programs like this. We have a fair chance of obtaining a house and housing security for our families.”
Stephen Spears, Habitat for Humanity executive director, said the program serves an underserved market.
“It’s very special that we’re able to get this with the support of the community,” he said. “The families work very hard.”
The summer season — which brings an influx of visitors — may be among the contributing factors for an increase in residential sales on Kauai last month, a figure of 52 homes sold compared to 35 sold the same period last year.
But officials with the Kauai Board of Realtors can’t say definitively what the factors are.
“There really isn’t any reason why the numbers are high,” Ono said. “There are many factors which could lead to the increase. The first being the economy and investment in real estate versus the stock market; the number of visitors during spring break.”
Nearly one third of Hawaii’s real property taxes were contributed by property owners from out of state, according to a March analysis of Hawaii real property tax from the Department of Business, Economic Development and Tourism.
That figure is about 50,000 out of 401,000 TMKs (tax map key) in the state.
Of the 23,000 residential properties on Kauai, about 19,000 are associated with a Hawaii mailing address, while 3,400 are associated with out-of-state U.S. residents in 2016.
The Koloa district saw the largest increase in sales with 17, a percentage north of 70 percent from last year’s 10 homes.
Ono said projects in Kukuiula and Pili Mai on the South Shore are likely reasons for the high numbers.
Home prices for the area are up. Three homes in the Poipu area sold for $6 million, $1.3 million and $1.5 million.
Black said there isn’t room for affordability for local homeowners.
“I think there’s only one house for sale on the South Shore currently under $400,000. If you’re looking at selling on the South Shore, you’re looking at Poipu and Kukuiula,” she said. “Of course the prices are going to go through the roof.”
The housing situation on Kauai is in a scary state, Black said.
“The rental market is in an emergency state. You have people who want to rent, who can afford to rent, who are not looking for a handout … and there aren’t rentals,” she said. “It’s really scary right now for local people to be out of housing. There’s not much on the market to buy or rent that’s affordable.”