In the middle of writing multiple offers for buyers on Princeville REO and short sale condos it’s a bit confusing comparing our local reality with what we’re hearing on national news. It sure seems like the tide is turning with an increase in buyer activity.
As a way of testing the waters, I looked at year-to-date saturation rates instead of national statistics, which can be very misleading when trying to understand Kauai’s micro-markets. NAR’s chief economist, Lawrence Yun often uses saturation rates when analyzing the health of real estate markets.
What is a saturation rate?
It’s not the North Shore rainfall…but means how long would it take to sell the current active inventory. At the end of 2009 I did analysis for residential sales in each area of the island, broken down into price categories. To see what’s changed in the past 6 months, this graph compares Year-End 2009 to first half of 2010 for North Shore single family homes.
As you can see, there is considerable improvement – especially for homes priced under $1M. For homes priced above $1M, the news isn’t as good. As noted in Kauai Luxury Market – Bouncing Back or Still Bouncing the Kauai luxury market still has more inventory than buyers – which makes it a great time to buy.
Before you get too excited about a recovery, let’s look at Kauai MLS statistics YTD end of June 2010 for residential single family homes and condos:
What does all that tell us? It’s pretty clear we are in the recovery process that Hawaii leading economist Paul Brewbaker predicted when he addressed the Kauai Board of Realtors in August 2008. When asked what the recovery would look like, he predicted it would be similar to after Hurricane Iniki where we’d “bounce along the bottom” – then number of sales would slowly increase. As demand starts to grow, then the values would start to rise. It’s unclear when values will increase, probably not any time soon. But there is a dramatic increase in buyer activity.
Here’s Brewbaker’s chart showing the recovery after Hurricane Iniki – see any similarities?
If you’d like the entire Kauai MLS Year-to-date statistics and my saturation report comparing 2009 to June YTD 2010, just email me at email@example.com.
Please add your insights to the Kauai market below. Do you see the tide turning?
All data has been supplied by third parties and has not been independently verified by Hawaii Information Service and is, therefore, not guaranteed.