Prices soar on Kauai While first-time home buyers are flocking to make purchases on Oahu, their counterparts on the Valley Isle and in a growing number of other neighbor island communities may already be shut out of the market.
and Maui as home
inventory dwindles
Heavy demand and little supply
squeeze many first-time buyersBy Lyn Danninger
ldanninger@starbulletin.comFewer new and resale homes were available for sale on the neighbor islands last month.
"Lack of inventory is already shutting people out," said Keoni Ball, broker in charge at Kahului-based Carol Ball and Associates.
Some new projects or new phases of existing projects in the Wailuku-Kahului area will be completed early next year. But by then, prices will likely be too high for many first-timers, he said.
What may have been priced in the $200,000 to $250,000 range a year or two ago has now increased by around $100,000, he said.
Moreover, a fixer-upper, another possibility for the first-time buyer, now is out of reach for many.
"We are looking at a fixer-upper for $300,000-plus, whereas a year ago it may have been $200,000 to $250,000," he said.
On Maui, there were 70 single-family homes sold last month, fewer than half the 182 homes sold during September 2001. Likewise, 131 condominiums sold during the month, well behind the 216 sold during the same period last year.
The median sale price for single-family homes, now at $445,694, showed a substantial jump of 71.4 percent over September 2001's median of $260,000.
But median prices paid for condominiums during September did not show the same kind of upward pressure, declining 15.1 percent to $158,000 from $186,000 a year earlier.
On Kauai, much of the real estate activity in September again continued to occur in resort neighborhoods on the island's north and south shores, where buyers from the mainland are looking for second homes or retirement residences.
Median prices paid for condominiums showed a noticeable jump, increasing 98.1 percent to $227,842 from last September's median of $115,000.
Median prices for single-family homes increased 20.6 percent to $410,000 from $340,000 a year earlier. The number of sales also edged up slightly for the period.
The shortage of inventory on Kauai's north shore has prompted some to buy raw land instead.
Ken Kubiak, broker in charge at Century 21 All Island's Kilauea branch noted that the value of a piece of land he purchased last year in Princeville with the intention of building a home has now increased by $100,000.
"In my neighborhood, I bought a lot for $160,000 one year ago. A couple of weeks ago, the last lot on the same street sold for $250,000," he said.
But the biggest problem for Kubiak and for others who purchased land recently is the difficulty in finding someone to build the home. Moreover, with the shortage of skilled builders and contractors, the cost of construction has also edged up.
"It's been hard to get a contractor for the lot. I've been trying to build since I bought it," he said.
On the Big Island, single-family home and condominium median sale prices during September showed a dip from September 2001. While the number of single-family home sales dropped 7.4 percent, the sales volume in condominiums showed a 25 percent increase to 55 properties sold during the month.
The median sale price for a single-family home on the Big Island in September was $179,000, down 7.5 percent from September 2001's median of $193,500. Median sale prices for condominiums showed a slight drop of 1.6 percent to $155,000 from the same period last year.
Gary Davis, broker-in-charge at Clark Realty's Waimea office noted the impact shrinking inventory is having on sales. "We used to have a pretty good market of homes under $200,000. That doesn't exist anymore," he said.
Moreover, with interest rates at such low levels and a shortage of rental housing, Davis suspects many who had been renting homes have now bought property.
