Neighbor island home sales are reeling
Median sales prices have fallen significantly on the Garden Isle
Fall has cast a chill over the residential real estate markets on Kauai and the Big Island, which saw both median home sales prices and sales volume lag last month as demand for properties paled.
The situation on those islands stood in sharp contrast to Oahu, where October home and condominium median prices were well above last year's.
Prices in Kauai's single-family home market took a 26 percent nosedive in October, with the median falling to $422,500 from the year-ago $570,000, according to data released yesterday by the Hawaii Information Service. Kauai condominium prices fell 32.75 percent to $305,968 from the year-ago $455,000.
But Kauai saw only two single-family homes and 29 condominiums sold last month. The single-family figure was the same as last year's, while condominium number was a 38.3 percent drop from the 47 sales in the previous year.
Since Kauai is such a small market, the median price could have been skewed by the mix of properties sold; however coming off March's $850,000 median, the price drop is significant.
Phillip Fudge, a real estate agent with Kauai Landmark Realty in Kapaa, said that while the October numbers reflect seasonal slowdowns, the market has changed substantially. Real-estate flippers have mostly left the Garden Isle as prices have moved high enough where it's hard to make short-term gains on resales, he said.
"I'm hoping that the downturn is just a seasonal thing, but I'm afraid that most of our investors were from the mainland and if their markets have been impacted it impacts us here as well," Fudge said.
The Kauai market took a substantial downturn in September and during the first half of October, but there are signs that it is coming back, Fudge said. "We've had a lot of closings at new projects," he said.
Kauai's single-family home prices are still up 9.8 percent year to date, with more than half of the buyers paying at least $480,000 for a home. During the first 10 months of this year, Kauai's median condominium sales price has fallen 9.2 percent to $395,000 from a year earlier.
A total of 34 homes have sold this year on Kauai, a 26 percent drop from the 46 homes sold by this time in 2005. High home prices and limited inventory have turned many buyers to the condominium market, where sales volume has increased 7.9 percent this year to 601 units.
On the Big Island, the October median sales price for a single-family home dropped just 2.7 percent to $267,500 from the year-ago $275,000. But condominium prices fell 21 percent to $375,000 from the $474,500 that was recorded in October 2005.
The number of single-family homes sold on the Big Island in October fell 24.7 percent to 58 from the year-ago 77, while sales dropped by 40 percent in the condominium market.
Demand for inventory on the Big Island has slowed as a result of seasonal downturns and a lack of investors, said Paula Beamer, a real estate agent with Parker Ranch Realty Inc. on the Big Island.
"Most of our buyers are people who are moving to the Big Island, people that live here and want to upgrade or those that want to purchase second-home/vacation-rental properties for themselves," Beamer said. There are few speculative investors or flippers, she said.
Year to date, prices are holding more steady on the Big Island. The median price of a single family home is $272,500, a 13.8 percent gain over the same period last year. For the first 10 months of the year, the median price paid for a Big Island condominium rose 23 percent to $460,000. Big Island sales volume in the first 10 months of the year plunged by 32.15 percent for houses and by 37.5 percent for condos.