LIHU‘E — Home prices on Kaua‘i have continued to rise while home sales have declined in the first half of 2022, a new report says.
According to data published by Hawai‘i Realtors, the median price of a single-family home on Kaua‘i through June 30 increased by 11.52% compared to that time frame last year — from $1.08 million to $1.2 million.
Meanwhile, the number of sales of single-family homes fell 24%, from 398 to 302. Statewide, the median price increased 15.1% to $1 million, and the number of sales fell 11.2%. Trends for condos are similar — the number of sales dropped 23%, while the sales price climbed 14.2%.
Jim Edmonds, founder and executive director of the affordable housing nonprofit Permanently Affordable Living Kaua‘i, said that housing prices were unlikely to stop their march upwards.
“In most locations the market goes up and then it goes down,” said Edmonds. “On Kaua‘i it goes up then kind of slides. Because there’s so many wealthy people who own property it doesn’t drop like it does elsewhere.”
Hawai‘i Life Real Estate Broker Neal Norman saw recent trends as a plateauing of a “frenetic market” in 2021 and the first quarter of 2022, when prices jumped more significantly.
“It was unprecedented what happened, with the combination of low interest rates, the pandemic and people figuring out that they don’t need to live where they work,” said Norman.
Norman, who last year recorded the highest dollar volume of sales in the state, reported that his sales tripled from 2020 to 2021, and that he matched that 2021 output in the first quarter of 2022 alone.
In the second quarter, though, Norman saw a cooling of the market as a result of higher interest rates and certain wealthy buyers’ loss of income from cryptocurrency and venture capital.
“It’s a much better market all in all because there is not as much craziness in the demand cycle,” said Norman. “The craziness the sellers commanded during the historic sellers’ market is ebbing.”
Principal Broker at Kaua‘i Dreams Realty Julie Black also said that an influx of off-island buyers contributed to the rising prices.
“Because of the new economy, people can work from home, and there’s a lot of jobs available here,” said Black.
Black predicted that prices will continue rising, though not to the extent they did during the previous year.
“There’s only so many people that can afford million-dollar homes,” she said.
She also pointed to a low inventory as a driving factor behind the low level of sales and the high prices.
This low inventory may be addressed by efforts underway to construct more affordable housing units on island. A PAL Kaua‘i development in Kilauea will build 11 new homes by early next year, and state Department of Hawaiian Home Lands projects in Anahola and Hanapepe will construct more than 100 new homes over the course of the next few years.
Yet these efforts are hindered by the rising cost of construction.
Edmonds reported that the cost of asphalt had doubled within the space of nine months, and that there had been wild fluctuations in the price of lumber, contributing to an estimated $5 million price tag on the construction of the Kilauea project.
He attributed the price hikes to the pandemic, the supply chain and corporate price gouging.
Norman and Black both agreed on the need for a big increase in affordable housing to make home ownership a more achievable goal for local families.
“They need to build affordable housing so they can keep locals living here,” said Norman. “You have to keep the culture alive and not have people ousted because the prices are so high.”
“Once those people build their houses and move in, it should relieve the rental market a little,” said Black. “Even if it’s only 20 homes, that’s 20 people now that can get a rental. Obviously, a lot more needs to be done, but every little project does help.”
•••
Guthrie Scrimgeour, reporter, can be reached at 647-0329 or gscrimgeour@thegardenisland.com.
