LIHUE — Single-family home sales are rising on Kauai.
The number of homes sold on Kauai increased 27 percent compared to July 2016, according to Title Guaranty’s residential sales report.
“Housing sales have been steady and climbing,” said Maria Perlman, Realtor at Oceanfront Sotheby’s International Realty. “Sales have been good, we’ve all been busy. It’s definitely a seller’s market now.”
Houses are selling so quickly that the inventory of existing homes for sale has become limited.
“There aren’t enough homes available for the amount of buyers that are looking to buy especially in the price range under $600,000,” said Lori Benkert, Realtor at Waioli Properties. “It’s just a basic supply and demand thing.”
With 51 single-family homes sold in July, the median sales price was $565,000, according to Title Guaranty.
“As the busy summer season winds down, we’ve noticed an uptick in sales activity,” said Chadd White, vice president of sales for Oceanfront Sotheby’s. “This is a common trend we see year after. Buying activity tends to pick up after our busy tourism season winds down.”
The median sales price for single-family homes in Waimea this July was $390,000, while in Lihue it was $499,500. The median sales price in Koloa was $695,000 and $1.4 million in Hanalei.
“The market is strongest in price ranges where there’s the most demand,” said Ron Margolis, broker at KW Kauai. “Unfortunately, like the whole state, we have a tremendous shortage of affordable housing.
“When anything reasonable lists, it usually sells fairly quickly,” he continued. “There’s a lot of demand in that part of the market as long as the houses are priced appropriately.”
In July, 24 homes sold in Lihue for a total of $10.3 million, while nine homes sold in Waimea totaling $3.3 million. There were 19 homes sold in Hanalei, 22 in Koloa and 26 in Kawaihau.
“In an area like Kalihiwai Ridge, where six homes maybe sell a year and there’s currently 17 homes for sale, that means there’s a lot of inventory. So that part of the market isn’t as strong,” Margolis said. “The market is segmented. In the more affordable ranges in every area of the island, properties that are priced to the market sell very quickly and there isn’t enough supply. That causes prices to rise.”
The smaller number of affordable homes creates opportunity for sellers to increase asking prices.
“The inventory out there is getting slim, houses are selling and renters are being displaced from their homes and looking,” said Perlman. “Being a Realtor for 25 years, I’ve seen it happen more than once. It’s sad because when the market goes up too, then the local people have a hard time qualifying for houses.”
Interest rates remain about 4 percent for fixed loans, depending on credit rating, according to Mortgage News Daily.
“Interest rates are still fluttering around 4 percent,” Benkert said. “That historically has never happened for as long as it’s happened in these last three years. We’ve never had that kind of low interest rates.”
Despite low home inventory, Hawaii remains a popular place to retire, especially to West Coast buyers.
Margolis said he would like to see the state and the county work with developers to create more affordable housing.
“Over time, the resident’s average income isn’t moving upward significantly, and the average house price is,” Margolis said. “Single family home values have appreciated islandwide since 2012 when the market started recovering.”