Wednesday, Oct. 5, 2022 |
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LIHU‘E — The median cost of a home on Kaua‘i reached nearly $1 million last month.
Milo Spindt, a broker-in-charge and in property management at Elite Pacific, said the median sales price for a residential home on Kaua‘i was $975,000 in February, compared to $802,500 the same month last year, an increase of 21.5%.
There were 49 home sales in February 2021 with a total volume of $81,781,100, compared to 33 sales and a total volume of $44,097,500 in February of 2020. These numbers indicate a significant increase in high-end-home sales, he said.
“We need more new housing options,” Spindt said.
“While COVID-19 has had a cooling effect on Kaua‘i’s economy, the combination of low housing inventory and low-interest rates has served to significantly increase pressure on housing demand for the islands.
“While we would all like to preserve Kaua‘i the way it was when we were born here or when we arrived here, without a significant increase in housing supply many of our children will never be able to afford to live here,” Spindt said.
Karen Ono, chief executive officer of the Kaua‘i Board of Realtors, has been working for KBR for 40 years, and said the major obstacle to developing housing on Kaua‘i is infrastructure: water, sewer and transportation needed to permit housing.
“There’s a need to better educate our residents of how they can become a homeowner,” Ono said.
Spint, who was first licensed as a real estate agent in Hawai‘i in 2001 and moved to Kaua‘i in 2011, said residential rental rates on Kaua‘i are generally much higher than in most of the rest of the nation, with the exception of bigger cities like Seattle, San Francisco and New York.
But compared to other counties in Hawai‘i, Kaua‘i’s residential rental rates are lower than most of the other islands. Based on an informal survey of property managers at Elite Pacific, LLC, Kaua‘i is the least expensive, followed by Hawai‘i Island, Maui and Honolulu. The other counties seem to be very close in average rent rates, he said.
Since the pandemic started, many residents have felt the pressure of finding ways to pay their rent. However, Spindt said an emergency proclamation preventing evictions should have helped ease the burden over the past several months.
Unless there was a pre-COVID rental increase agreed upon by the tenant, residential rent rates should not have been increased for existing tenants. Vacant units may have seen some small increases in rental rates, as vacancy rates remain low and demand remains high, he explained.
Spindt said the average rent for a three-bedroom home on Kaua‘i is about $2,400 per month, but there is a fair amount of variation depending on the size of the home, amenities and location.
“Families that are still unemployed continue to have challenges competing in the rental market,” Spindt said. “With low rental inventory and high demand, owners continue to have a selection of well-qualified applicants to choose from. The need for an increased inventory of housing has never been clearer.”
Regarding the commercial rental market, Jim Mayfield, president and principal broker of Island Business &Commercial Brokerage in Lihu‘e, said businesses are at risk of failure, especially those dependent on visitors.
“As we all know, those portions of the commercial real estate most closely aligned with specific tourist/visitor areas are more likely to have been affected than the non-visitor districts of Kaua‘i,” Mayfield said.
When business expenses rise, price increases can follow, he said.
Island Business Management Hawai‘i, founded in 2007, in its February report, the “3rd Hawai‘i Commercial Rent Survey,” showed a consistent need for commercial rent assistance in Hawai‘i and across the United States.
Many businesses permanently closed their doors and laid off employees in 2020 due to the burden of commercial rent compounded with the costs of doing business in the new normal.
And many businesses do not expect to survive through the end of 2021 without government-funded rent relief.
Mayfield had been in commercial banking for 30 years and in commercial-only real estate for the last 14 years.
“I am not familiar with commercial rents in locations other than Kaua‘i,” Mayfield said. “In Kaua‘i, office and industrial rents have not been affected much in the past 12 months.”
He explained that commercial warehouse and office rents on Kaua‘i have gone up 1.5% to 3% in the past 12 months, which is about the same rate of change as in prior years.
Mayfiled said although there has been public perception that the COVID-19 “hit” to Kaua‘i was going to result in a substantial reduction in the need for warehousing/office space, that hasn’t happened either, for two reasons.
First, there was not a large surplus of vacant space prior to the onset of COVID. Second, most of the existing tenants were required by their lease to continue occupying their rental space and continue paying rent.
“I do not expect warehouse vacancies/rental rates to change,” Mayfield said. “Perhaps in the next year, as office leases start to mature and as business owners have sufficient time to come to understand the consequences of Zoom meetings and additional e-mail communication, there may be some reduction in office-space usage.”
Stephanie Shinno, education, business and community reporter, can be reached at 245-0424 or firstname.lastname@example.org.
Education? Education on how this not paradise but the Hereafter is paradise. Education on how this island is a lost to the all mighty freemason dollar.
A high end home on Kauai compares to a starter home in many locations. My son moved to North Carolina and purchases a custom 2400 square foot hone on 1/2 fenced acre for $200,000. Until we bring housing down our youth will continue to leave and privileged mainland and foreign investors will continue to come. Lets get some affordable housing. Affordable is not $400,000. We need some starter homes that can be afforded by those learning $20 an hour.
28,000 eligible Native Hawaiians are on the Department of Hawaiian Homelands waitlist. Waiting … waiting… waiting…
Do they have any jobs? Other than construction or labor workers somewhere in DLNR or state forestry division.
The problem is simple supply and demand. Too much land is held in too few hands. How many 1000s of acres are owned by the Robinson Family? Or Grove Farm? Google “Kauai Land owner map” and you can see over 60% of island is owned by a 4 or 5 groups. If we can increase supply then we can lower demand and drop prices. An effective solution is to raise property taxes for groups/individuals above a 50 acre threshold. Start with a 100% increase in property tax for that tier. And move up to 1000% for anything above 100 acres. Believe me – you will see a lot more land on the “for sale” section. This is an island – we geographically cannot grow outwards. I know some may feel this is unfair to the rich – but it’s more unfair to not share and have our locals priced out of a home forever. Lobby your politicians to make changes to the property tax code (and convert zoning from agro to residential). If that fails vote them. That is the only way to make something happen.
Higher prices create higher property taxes.
The County government loves and cherishes high property values.
The County lives on the value increase. People suffer. County parties like there is no tomorrow.
The County could allow more mid range housing, they do not want it. There are no plans to create any.
The last 2 subdivision that targeted local residents was Waialelale Estates 30 plus years ago.
And Hanapepe Heights also many many moons ago.
we have several long, and short term rentals on the south and west sides, we are raising our rental prices because of higher property tax and increased demand…
Keep driving the locals out. You don’t care, as long as you and yours have a piece of paradise.
Hence the word “Haole”
hate like yours will drive you out, not the people moving here.
The problem is simple supply and demand. Too much land is held in too few hands. How many 1000s of acres are owned by the Robinson Family? Or Grove Farm? Google “Kauai Land owner map” and you can see over 60% of island is owned by a 4 or 5 groups. If we can increase supply then we can lower demand and drop prices. An effective solution is to raise property taxes for groups/individuals above a 50 acre threshold. Start with a 100% increase in property tax for that tier. And move up to 1000% for anything above 100 acres. Believe me – you will see a lot more land on the “for sale” section. This is an island – we geographically cannot grow outwards. I know some may feel this is unfair to the rich – but it’s more unfair to not share and have our locals priced out of a home forever. Lobby your politicians to make changes to the property tax code (and convert zoning from agro to residential). If that fails vote them out. That is the only way to make something happen.
Who can afford that? I’m sure the retired folk in princeville are very happy while the rest of the island suffers.
Kauai home/property values have been artificially inflated over the past year by real estate agents (most who are not even from Kauai) desperate for bigger commissions to fund their own mansions here.
This problem is compounded by a corrupt mayor who is in league with mainland corporate billionaires to force a sell-off of the Kauai shoreline to the highest bidders (mostly Big Ag and GMOs).
Local families need to HOLD FIRM and not sell their homes and land to these wealthy carpetbaggers. Instead, you need to unite and force Kawakami to turn vacant land into more affordable housing for true Kauai locals.
If you don’t, I can promise that within the next 5-10 years Kauai will be nothing more than a bunch of Zuckerbergs and Monsantos. Those of you locals reading this right now won’t even live here anymore, because you won’t be able to afford to.
prices are set by what buyers are willing to pay, not real estate agents.
and who exactly are “true Kauai locals?” the ones who moved here 5 years ago? 20 years? born here? ancestors from ancient times… ?? where do we draw the line?
who, in your mind, is worthy of the label “true Kauai local?”
Why would Big Ag want shoreline land…? You can’t farm on sand. There are, what, 2 big ag companies on island right now…? Monsanto being neither of them. I don’t think ag companies are what’s causing the housing shortage.
Why would our children want to live here? Where are they going to work so that they can afford to buy a home here.?
Most of the people you may know are not home buyers. A lot of out of work high schoolers from the 1970s and 1980s. They played sports or got set back in the buying market. They had no job to buy a house. Factual. Even in Waimea.
Couple of Chesire Cats…Chi ching $$$$….Absolutely sickening to no end…You should be ashamed of yourselves…And den you wondah why you nevah get into da council???? SMH…
This is mostly an indicator of what new buyers are purchasing… houses of higher value are more attractive than the typical older home of most of us.
IF THE COUNTY WON’T BUILD AFFORDABLE HOUSING THEN DONT AGREE TO ANY B.s
High end housing either….block it
OH AND BY THE WAY…AFFORDABLE IS $300,000 MAX. . OR GTFO!!!
Stop reporting your classmates who never went to college. This is to the students from the 1980s. At any school. You reported them to an agency because they couldn’t pay their bills? Big deal on what you got. Nobody needs to know a college graduate from any one of the high schools on Kaua’i and from the 1980s or 1990s. This seems to be the common behavior from classmates who feel their classmates weren’t smart enough. Cut it out. Did you say Affordable housing?
This kind of behavior is ridiculous. Nobody needs to know that college person in this whole economic scheme. So that is it. The real story behind this Affordable housing issue.
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