Conditions in our market are continuing the same as they’ve been most of the year, though the volume of transactions was a mixed bag over the last four months as compared to 2018. For example, in July of this year, more homes and condos sold island-wide over last year. In August, more homes sold, but fewer condos left the market. In September, fewer homes and condos sold. In October, more of both sold. To me, that’s an indication that the market remains stable.
Some associates of mine in Silicon Valley have told me that prices have gone down significantly. Surprisingly, that’s not the trend here on Kauai. Why is that? It goes back to the low levels of inventory.
For 2019, the number of single-family homes is down by 4% over last year, and the number of condo sales is down by 18%. As of the recording of this video, there are 606 active listings. In terms of our inventory mix, this is pretty typical of what goes on in the nation.
For homes in the resort markets, like Princeville on the North Shore, there are currently two homes listed for sale for under $1 million, and they sell at a rate of two per month. This shows us that we basically have one month of inventory.
Conversely, there are 16 homes that are priced between $1 million and $2 million in the Princeville market, and they sell at a rate of one per month. That means if nothing else came on the market, it would take 16 months to sell all our inventory. Clearly, that segment of the market is slower.
In Lihue, there’s only a total of six homes under the $2 million price point for sale and seven in escrow, meaning there’s still a shortage of inventory. For people who want a quality home starting around, say, the $700,000 price point, there really isn’t much to choose from.
Interest rates are still low. At the end of October this year, the Fed decided to drop the rates again, but according to one of my associates at Wells Fargo Private Banking, Wells Fargo predicts that rates will stay the same in 2020. As of now, the rate for a 30-year fixed mortgage for a primary residence in Kauai is 3.875%. For a 10-year ARM, the rate is 3.625%. Jumbo rates are still lower than conforming rates, hovering around 3.5% for a 30-year fixed mortgage and 3% on a 10-year adjustable.
The bottom line is that the market remains in a stable condition. Buyers can get deals depending on the negotiation skills of their agent and the motivations of the seller to give good value to the buyer.
For sellers, there’s not a lot of inventory, meaning you’ll have reduced competition, but appreciation has lowered. If you want to sell quickly, you’ve got to have the best price for your particular property’s style. The longer you stay on the market, the more buyers will think that something is wrong with your listing.
If you have any questions about the markets from Waimea and Kekaha all the way to Hanalei, reach out to me. I’d be happy to provide you with specifics from your area. Aloha and a hui hou!