Aloha folks this is Lee Morey, Principal Broker with Coldwell Banker Turtle Cove Realty on Kauai with a November 2015 market report and observations. With what you need to know about November housing and condo stats.
In short, our residential housing market dipped 11.4% when compared with the same per last year when viewing all 5 districts of Kauai. See our year in review for real estate Kauai.
A wee bit disconcerting to our younger agents in the office but I want to offer a different take on these numbers, there were glimmers of hope.
Poipu Condos Shine in the Sun
Sales increased dramatically in our Poipu Condo sales and this makes sense. Our visitor counts to the island have exceeded historical numbers and typically with higher visitor counts to the island we see an increase in Kauai real estate sales.
Poipu condo sales increased 433% in November. Visitors fall in love with the location and when they calculate that their piece of paradise can be vacation rented to defray costs of ownership. It’s an easy decision.
True, residential sales have been sluggish for other areas of the island in November. But not for the lack of demand. People are looking for homes and vacation condominiums. Sales are sluggish because sellers are unrealistic on their pricing.
Part of this fantasy is fostered by us, the supposed experts in real estate Kauai. Yes, listing agents can be the problem. In an effort to capture the listing at all costs they support the inflated price that the seller believes their property is worth.
Then it sits… and sits… and sits, until the Seller realizes that their property is indeed overpriced.
When a home is priced correctly it does not stay on our market for more than 45 days. That is the reality.
Fed Rate Increase
The recent increase in the federal rate of 0.25% should not worry potential buyers. The fed rate increase is the charge that banks lend monies to other banks in the short term.
Mortgage rates are more closely correlated to Treasury rates which in fact have fallen recently. With interest rates at historical lows we should see more people entering the market.
Nationwide Challenges to Real Estate
The stumbling blocks continue to be real wage growth which has been stagnant. But we are seeing signs of an improvement nationwide. And finally, the strict lending standards that banks have imposed prevent a great number of people from qualifying.
This can be seen in our rental housing market. We receive daily inquiries about long term housing on Kauai. And while we do not focus or manage rental properties we have seen the demand soar and rents rise.
With the advent of the “sharing economy” it is more profitable for a homeowner to short term rent than long term rent. Vacation renters tend to be out exploring the island and the activities and not sitting in the home.
Tell us why you like renting to Visitors. Comment and we will reply.