Kauai Real Estate Update- There has been a positive shift in the Kauai Real Estate market with the level of activity; last week a total of 25 properties here on Kauai received accepted offers and in a market where we are still struggling with having a decent amount of inventory this is significant. A breakout star of the Kauai real estate activity has been “Pakela Ike” which is a part of Timbers in Lihue, they released 24 vacant lots ranging from 19,540 to 30,872 sq ft, prices from $695K to $1.125K just 20 days ago and already exactly half are under contract. To learn more about this subdivision click on this link: PAKELA ‘IKE INFO , you are welcome to contact me for more information.
For a complete list of all the real estate activity that happened last week on the island of Kauai click here: Kauai Real Estate Activity February 20 to 26, 2023
Poipu Beach Real Estate Update- For a complete list of the Fee Simple activity in Poipu since the beginning of this year click here: Poipu Beach Current Market Analysis
For the Kiahuna Plantation activity click here: Kiahuna Plantation Current Market Analysis
South Shore Caravan
Last week we had our south shore caravan which was very well attended. On it was a home in the Kukui’ula Subdivision that I completely fell in love with which had a “pod” style floor plan which is one of the more popular styles. This single level four bedroom home is in the shape of an “S” and each bedroom is en-suite. When you enter the home it’s into the great room which has disappearing living room wall brining the outdoors in, massive outdoor covered living space with a infinity pool and views that are pretty stunning. I loved the primary suite and the views you’d have to wake up to. This listing has a great matterport tour for you to virtually walk through it, click on this link and on the top right hand corner click on the “film strip” Enjoy! 5645 Holo Malanai Street listed at $11,500,000
Parking Tickets Significantly Up At Ha’ena Beach Park
Last year the Kauai Police Department hired an additional parking enforcement worker for the illegal Ha’ena street parking and it appears to be paying off. Here’s what I mean: in 2021 there were a total of 1,240 parking violations in the Hanalei area, in 2022 2,701 which is more than double. It’s estimated that 85% of those tickets are in the Ha’ena area. Currently, if you don’t have a Hawaii ID you need to make a reservation to park in the lot. Some people either were not aware of the procedure or decided to chance it by illegally parking on the street.
In 2019 that $35 dollar ticket went up to $235 and another $200 on top of that costing you $435 for anyone parking on the street to Ha’ena.
Buyers Paying Cash For Homes Historic High
At the heart of the 2008 real estate crash was the collapse of the sub-prime loans and the low level entry standards for getting a loan. However this last run up has been largely cash. In 2020 cash sales accounted for 22.7% of the sales, 2021 it went up to 34.4% and last year 36.1%. This is within striking distance of the 38.5% cash sales in 2011 and 2012 which is when we were coming out of the Great Recession.
Six of the top 10 metro areas for cash sales were in Georgia, 72.1% in Augusta alone. Flint, Michigan was at 59.5%. The lowest percentage were in Washington D.C. (17.8%), Vallejo, CA (18.8%) and San Jose, CA (19.2%)
Slowdown In Home Prices
Lawrence Yun, NAR Chief Economist said “A slowdown in home prices is underway and welcomed, particularly as the typical home price has risen 42% in the past three years. Far fewer metro markets experienced double-digit price gains in the latest quarter.”
But Buyers Coming Back Into The Market
Lawrence Yun continues with: “Even with a projected reduction in home sales this year, prices are expected to remain stable in the vast majority of the markets due to extremely limited supply. Moreover, there are signs that buyers are returning as mortgage rates decline, even with inventory levels near historic lows.”
25% Increase In Transient Accommodations Tax Bill HB820 Falls Flat
House Bill 820 got the attention of those that have vacation rental condominiums and homes as this Bill proposed a 25% increase in the current Transient Accommodations tax rate which would have been a combined total of over 33% tax on vacation rentals here on Kauai. The bill was up for a hearing before the Hawaii State Legislature on Friday, February 24.
I watched the testimony and this Bill got the most airtime at 1 hour and 5 minutes. Here was the main problem with this Bill; hotels were not included and the Bill was being called out right and left as being unconstitutional. Think of it this way: the Grand Hyatt in Poipu is at the old tax rate of almost 18% but the Poipu Sands condominiums, which are right next to the Grand Hyatt would be over 33% with this proposed change. It made no sense and fortunately it made no sense to the Representatives that heard it either.
The Hawaii Tourism Authority (HTA) testified and they were for it. The Department of Taxation testified and I couldn’t tell if he was for or against it, but, when he was questioned by the Representatives on his testimony he was not sure on his answers and said he needed to do some more research. The Representatives then asked him if he read that Bill?
After those two testimonies everyone else was vehemently opposed.
A representative from Airbnb testified against the measure and then a lawyer from the “Hawaii Legal Short Term Rental Alliance” gave some impressive testimony against the Bill. She said if challenged in a court of law, which it would be, it would never make it, she then cited several law codes that the bill violated. After that there were also at least a dozen different people that testified against it as well.
In the end the Legislature recommended that the Bill be deferred and said that it needed more work before they could consider voting on it. To see the video of this go to https://www.youtube.com/watch?v=N-Fcy_opsKk if you want to skip to the testimony of HB 820 go to minute marker: 5:16:52