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VOLUME 10 ISSUE 1
This is the 38th issue of Sand Castles, Makai Properties’ quarterly real estate newsletter. Our goal in publishing Sand Castles is to provide an up-to-date source of real estate information for the island of Kauai.
Makai Properties #1 In Sales On Kauai
Despite these trying times, Makai Properties assisted more buyers and sellers of property to close transactions than any of the other 107 real estate companies on Kauai in 2009, according to year-end MLS statistics.
We attribute our success to the 31 years of service to the residents of Kauai and visitors to the island, depth of knowledge, and high number of veteran brokers within our 22-agent organization.
KAUAI MARKET UPDATE
“WE’VE HIT THE BOTTOM”
The general consensus for most of the nation is a feeling of relief that 2009 is behind us. Kauai has certainly not been spared the economic woes that plague our country, but our downturn has been shorter and less severe, according to Hawaii economists.
Economists pointed to a bottoming of the Hawaii real estate market in March of last year. While it
is generally accepted that national real estate values have dropped 30% from the peak of the market, Kauai median sales prices fell 26% when comparing 2009 sales prices to those at the end of 2005, the peak of the last hot market.
Since reaching the bottom last March, median sales prices have remained flat. There is, however, an upward trend in the increased number of sales across the state. The Honolulu Board of Realtors reported that the 249 homes that traded hands in November of 2009 represented a 46.5% increase over November of 2008, while condo sales exploded 102.5% to 407.
The same trend is occurring on Kauai to a lesser degree. Just 87 properties sold in the first quarter of 2009 - an all-time low in recent history. Subsequent quarters showed increases of 126, 131 and 157 sales over each previous quarter for the remainder of the year. The month of January of this year alone has already posted 62% of the number of sales attained in the first quarter of 2009.
Economist Paul Brewbaker said that the market has begun to “rebound into a stabilization phase that will run through 2010…” and will reach prices attained in the last peak somewhere between 2012 and 2014. Brewbaker stated that it usually takes about three years for prices to rebound once sales rebound.
There are currently relative bargains available in every property category on Kauai – homes, land and condominiums – just waiting for those who recognize an opportunity to capitalize on the market.
To paraphrase a couple of popular adages, “Buy low, sell high”, and,”Buy when everyone else is selling, and sell when everyone else is buying”. If you have been waiting for the opportunity to take advantage of lower prices, this is it! Call us today for information on the best buys available.
FROM PEAK TO BOTTOM
Year End 2005 VS. 2009
Number of Sales
# %
Increase/ Increase
2005 2009 <Decrease> <Decrease>
Residential 671 261 < 410> <61%>
Vacant Land 436 70 <366> <84%>
Condo 673 160 <513> <76%>
Year End 2005 VS. 2009
Median Sales Price
# %
Increase/ Increase
2005 2009 <Decrease> <Decrease>
Residential $639,000 $470,000 <$169,000> <26%>
Vacant Land $392,000 $280,000 <$112,000> <29%>
Condo $435,000 $330,000 <$105,000> <24%>
FORECLOSURES/SHORT SALES = OPPORTUNITY
Distressed property sales have had a huge impact upon national and local real estate markets. According to an article in Pacific Business News, “Hawaii had nearly three times more properties with foreclosure filings in 2009 than it did in 2008.” The total was 9,002, which earned Hawaii the 15th spot in the nation on RealtyTrac’s list of year-end foreclosures. RealtyTrac is a real estate research company based in California.
Short sales have also reached record levels. In a short sale, lenders agree to let borrowers sell a home for less than the mortgage balance. On Kauai, the transfer of distressed properties accounted for a large portion of sales that took place in 2009. These properties consisted mainly of entry-level homes which were discounted to achieve a quick turnover in an otherwise slow market.
As a result of the price discounting, the median price of a home on Kauai dropped to $470,000 at the end of last year. This represents a 26% decrease since 2005 when the median sales price was $639,000. These new price levels, coupled with first-time home buyer programs, including a federal $8,000 tax credit (http://www.federalhousingtaxcredit.com), have provided opportunities for many Kauaians who were previously priced out of the market.
COMING BACK TO BITE YOU
Beware of advice that you hear in the media from “experts” who suggest that it might be ok to walk away from a property that you own because your mortgage balance is greater than the current value of your property. Many assume that if they stopped making their payments, the bank would foreclose and that would be the end of the mortgage contract. Not so!
Hawaii, along with many other states, is a “recourse” state, which allows lenders to pursue unpaid mortgage balances. To get their money, they can seize wages, tap bank accounts and put liens on other assets held by debtors. In addition, judgments can include court fees, fines and interest.
According to a recent Business Week article, “The banks have been too underwater with foreclosures to spend much time on deficiency judgments, but that’s beginning to change. Walking away from a property comes with a cost, especially for people who otherwise have good credit. The bank is going to pull your credit report, and if you’re current on your other bills they are going to come after you and potentially ruin you,” the article states.
The article points out that short sales also may lead to deficiency judgments years after former homeowners have moved on. “Banks are being very careful to preserve their rights, either outright in the short sale agreement, or by using vague language that leaves that door open. About 90 percent of people who do a short sale think they are “off the hook,” according to the article.
In addition, if lenders forgive part of a homeowner’s loan, they are required to report to the IRS the amount of the loan that is forgiven. The homeowner may have to pay a tax on that amount of “loan relief” under IRS rules.
Those who are involved in a foreclosure or short sale are advised to consult an attorney to guide them through the process. Those who can’t afford an attorney may be eligible to receive legal advice through the Legal Aid Society of Hawaii, which can be contacted at http://www.legalaidhawaii.org/.
The following is a list of the west and south side properties that have sold in the months of October, November & December of 2009. KEKAHA / WAIMEA
9436 Keahi St 4 Bd/2 Ba Home $375,000
8948 Kaumualii Hwy D 3 Bd/3 Ba Home $1,500,000 HANAPEPE / ELEELE
5110 Alii Loop 4 Bd/2 Ba Home $434,500
4437 Iona Rd #2 4 Bd/2 Ba Home $387,500
233 Keokeo Rd 3 Bd/1.5 Ba Home $370,000
Puu Rd 2 Bd/1.5 Ba Home $280,000
3936 Waha Rd #2 2 Bd/2 Ba Home $425,000
2317 Lapuuna Rd 2 Bd/1 Ba Home $400,000
4230 Papalina Rd #B 3 Bd/2.5 Ba Home $407,000
4467 Ikena Pl 5 Bd/5 Ba Home $675,000
4121 Oni Pl 3 Bd/3 Ba Home $610,000
1239 Pua Melia St 3 Bd/3 Ba Home $675,000
4418 Panui St 3 Bd/3 Ba Home $940,000
4121 Oni Pl 3 Bd/3 Ba Home $610,000
4574-B Puuwai Rd 2 Bd/2 Ba Home $299,000
4901-A Kikala Rd 1 Bd/2 Ba Home $450,000
2684 Onu Pl 2 Bd/2 Ba Home $460,000
5008-E Puuwai Rd 3 Bd/2 Ba Home $695,000
4838-C Puuwai Rd 4 Bd/3 Ba Home $665,000
Kua Aina St 10,088 sf Lot $185,000
Alelo Rd 10,495 sf Lot $245,000
2437 Alelo Rd 14,098 sf Lot $674,150 LAWAI / OMAO
4570 Kua Rd 3 Bd/2 Ba Home $420,000
3600 Puakenikeni Rd 3 Bd/2 Ba Home $336,000
4538 Piko Rd 4 Bd/5 Ba Home $530,000
4900-M Kua Rd 4 Bd/3 Ba Home $635,000
3448 Lawailoa Ln 3 Bd/2.25 Ba Home $372,500
4111 Noho Rd 3 Bd/2 Ba Home $442,000
3670 Ilima Pl 12,802 sf Lot $200,000
KOLOA / POIPU
3422 A Poipu Rd 3 Bd/1.5 Ba Home $575,000
1672 Kelaukia St 3 Bd/3 Ba Home $916,000
2725 Milo Hae Loop 3 Bd/3.5 Ba Home $1,250,000
1605 Makanui Rd A 3 Bd/2.5 Ba Home $1,450,000
2333 Ho’ohu Rd 3 Bd/5 Ba Home $1,600,000
Koloa Creekside #6 8,556 sf Lot $243,000
Makanui Rd #B 10,202 sf Lot $350,000
Poipu Beach Est #184 1.03 Acre Lot 350,000
Koloa Gardens #16 1 Bd/1 Ba Condo $255,000 Manulaoha #605 1 Bd/1 Ba Condo $330,000 Hale Kahanalu #6 2 Bd/1 Ba Condo $350,000 Makahuena #A 304 3 Bd/2.5 Ba Condo $523,900
Makahuena #C 307 2 Bd/2.5 Ba Condo $490,000
Kiahuna Ph II Apt #174 1 Bd/1 Ba Condo $550,000
Kiahuna Ph III Apt #202 2 Bd/2 Ba Condo $550,000
Regency #824 3 Bd/3 Ba Condo $575,000
Regency #620 3 Bd/2.75 Ba Condo $625,000
Poipu Kapili #25 1 Bd/2 Ba Condo $575,000
Nihi Kai Villas #820 2 Bd/2 Ba Condo $860,000
Poipu Makai #B3 3 Bd/3 Ba Condo $945,000
MORTGAGE RATES
Wells Fargo quoted rates as of this printing:
Conforming APR
30 Year Fixed 4.875% 5.528%
30 Year Fixed FHA 5.125% 5.644%
15 Year Fixed 4.250% 4.670%
5 Year ARM 3.750% 3.901%
5 Year ARM FHA 3.750% 3.157%
GO FIGURE!!!
SPAM® Flavored Macadamia Nuts??? Just when you thought every conceivable food pairing had already been done with Hormel® SPAM — Hawaii’s number one selling canned good — Hamakua Plantations brings us spam-flavored macadamia nuts. Seriously? That sounds… nuts!
So how does it taste? According to a testimonial, “…it tastes just like a fried slice of spam wrapped around a macadamia nut. It tastes slightly porky, just like spam. It’s surprising how well the Macadamia Nut’s flavor and texture matches with this savory-meets-salty spam-flavored coating.” Now being these nuts tastes like spam, do you think we should stop at that? Of course not! How about a spam macadamia nut musubi!
What’s Sold
4645 Palila Loop 4 BD/3.5 Ba Home $408,000
3590 Kaloke Rd 3 Bd/2.25 Ba Home $500,000
3590 Kaloke Rd 3 Bd/2.25 Ba Home $500,000
3590 Kaloke Rd 3 Bd/2.25 Ba Home $500,000
3590 Kaloke Rd 3 Bd/2.25 Ba Home $500,000
3590 Kaloke Rd 3 Bd/2.25 Ba Home $500,000
Koloa Gardens #11 2 Bd/2 Ba Condo $315,000
Kahala #113 1 Bd/1 Ba Condo $312,000
Sunset Kahili #206 1 Bd/1 Ba Condo $330,000
As a result of the price discounting, the median price of a home on Kauai dropped to $470,000 at the end of last year. This represents a 26% decrease since 2005 when the median sales price was $639,000. These new price levels, coupled with first-time home buyer programs, including a federal $8,000 tax credit (http://www.federalhousingtaxcredit.com), have provided opportunities for many Kauaians who were previously priced out of the market.
COMING BACK TO BITE YOU
Beware of advice that you hear in the media from “experts” who suggest that it might be ok to walk away from a property that you own because your mortgage balance is greater than the current value of your property. Many assume that if they stopped making their payments, the bank would foreclose and that would be the end of the mortgage contract. Not so!
Hawaii, along with many other states, is a “recourse” state, which allows lenders to pursue unpaid mortgage balances. To get their money, they can seize wages, tap bank accounts and put liens on other assets held by debtors. In addition, judgments can include court fees, fines and interest.
According to a recent Business Week article, “The banks have been too underwater with foreclosures to spend much time on deficiency judgments, but that’s beginning to change. Walking away from a property comes with a cost, especially for people who otherwise have good credit. The bank is going to pull your credit report, and if you’re current on your other bills they are going to come after you and potentially ruin you,” the article states.
The article points out that short sales also may lead to deficiency judgments years after former homeowners have moved on. “Banks are being very careful to preserve their rights, either outright in the short sale agreement, or by using vague language that leaves that door open. About 90 percent of people who do a short sale think they are “off the hook,” according to the article.
In addition, if lenders forgive part of a homeowner’s loan, they are required to report to the IRS the amount of the loan that is forgiven. The homeowner may have to pay a tax on that amount of “loan relief” under IRS rules.
Those who are involved in a foreclosure or short sale are advised to consult an attorney to guide them through the process. Those who can’t afford an attorney may be eligible to receive legal advice through the Legal Aid Society of Hawaii, which can be contacted at http://www.legalaidhawaii.org/.
What’s Sold
The following is a list of the west and south side properties that have sold in the months of October, November & December of 2009.
KEKAHA / WAIMEA
9436 Keahi St 4 Bd/2 Ba Home $375,000
8948 Kaumualii Hwy D 3 Bd/3 Ba Home $1,500,000
4645 Palila Loop 4 BD/3.5 Ba Home $408,000
HANAPEPE / ELEELE
5110 Alii Loop 4 Bd/2 Ba Home $434,500
4437 Iona Rd #2 4 Bd/2 Ba Home $387,500
233 Keokeo Rd 3 Bd/1.5 Ba Home $370,000
Puu Rd 2 Bd/1.5 Ba Home $280,000
3936 Waha Rd #2 2 Bd/2 Ba Home $425,000
2317 Lapuuna Rd 2 Bd/1 Ba Home $400,000
3590 Kaloke Rd 3 Bd/2.25 Ba Home $500,000
3590 Kaloke Rd 3 Bd/2.25 Ba Home $500,000
3590 Kaloke Rd 3 Bd/2.25 Ba Home $500,000
3590 Kaloke Rd 3 Bd/2.25 Ba Home $500,000
3590 Kaloke Rd 3 Bd/2.25 Ba Home $500,000
4230 Papalina Rd #B 3 Bd/2.5 Ba Home $407,000
4467 Ikena Pl 5 Bd/5 Ba Home $675,000
4121 Oni Pl 3 Bd/3 Ba Home $610,000
1239 Pua Melia St 3 Bd/3 Ba Home $675,000
4418 Panui St 3 Bd/3 Ba Home $940,000
4121 Oni Pl 3 Bd/3 Ba Home $610,000
4574-B Puuwai Rd 2 Bd/2 Ba Home $299,000
4901-A Kikala Rd 1 Bd/2 Ba Home $450,000
2684 Onu Pl 2 Bd/2 Ba Home $460,000
5008-E Puuwai Rd 3 Bd/2 Ba Home $695,000
4838-C Puuwai Rd 4 Bd/3 Ba Home $665,000
Kua Aina St 10,088 sf Lot $185,000
Alelo Rd 10,495 sf Lot $245,000
2437 Alelo Rd 14,098 sf Lot $674,150
LAWAI / OMAO
4570 Kua Rd 3 Bd/2 Ba Home $420,000
3600 Puakenikeni Rd 3 Bd/2 Ba Home $336,000
4538 Piko Rd 4 Bd/5 Ba Home $530,000
4900-M Kua Rd 4 Bd/3 Ba Home $635,000
3448 Lawailoa Ln 3 Bd/2.25 Ba Home $372,500
4111 Noho Rd 3 Bd/2 Ba Home $442,000
3670 Ilima Pl 12,802 sf Lot $200,000
KOLOA / POIPU
3422 A Poipu Rd 3 Bd/1.5 Ba Home $575,000
1672 Kelaukia St 3 Bd/3 Ba Home $916,000
2725 Milo Hae Loop 3 Bd/3.5 Ba Home $1,250,000
1605 Makanui Rd A 3 Bd/2.5 Ba Home $1,450,000
2333 Ho’ohu Rd 3 Bd/5 Ba Home $1,600,000
Koloa Creekside #6 8,556 sf Lot $243,000
Makanui Rd #B 10,202 sf Lot $350,000
Poipu Beach Est #184 1.03 Acre Lot 350,000
Koloa Gardens #16 1 Bd/1 Ba Condo $255,000
Koloa Gardens #11 2 Bd/2 Ba Condo $315,000
Kahala #113 1 Bd/1 Ba Condo $312,000
Sunset Kahili #206 1 Bd/1 Ba Condo $330,000
Manulaoha #605 1 Bd/1 Ba Condo $330,000
Hale Kahanalu #6 2 Bd/1 Ba Condo $350,000
Makahuena #A 304 3 Bd/2.5 Ba Condo $523,900
Makahuena #C 307 2 Bd/2.5 Ba Condo $490,000
Kiahuna Ph II Apt #174 1 Bd/1 Ba Condo $550,000
Kiahuna Ph III Apt #202 2 Bd/2 Ba Condo $550,000
Regency #824 3 Bd/3 Ba Condo $575,000
Regency #620 3 Bd/2.75 Ba Condo $625,000
Poipu Kapili #25 1 Bd/2 Ba Condo $575,000
Nihi Kai Villas #820 2 Bd/2 Ba Condo $860,000
Poipu Makai #B3 3 Bd/3 Ba Condo $945,000
MORTGAGE RATES
Wells Fargo quoted rates as of this printing:
Conforming APR
30 Year Fixed 4.875% 5.528%
30 Year Fixed FHA 5.125% 5.644%
15 Year Fixed 4.250% 4.670%
5 Year ARM 3.750% 3.901%
5 Year ARM FHA 3.750% 3.157%
GO FIGURE!!!
SPAM® Flavored Macadamia Nuts??? Just when you thought every conceivable food pairing had already been done with Hormel® SPAM — Hawaii’s number one selling canned good — Hamakua Plantations brings us spam-flavored macadamia nuts. Seriously? That sounds… nuts!
So how does it taste? According to a testimonial, “…it tastes just like a fried slice of spam wrapped around a macadamia nut. It tastes slightly porky, just like spam. It’s surprising how well the Macadamia Nut’s flavor and texture matches with this savory-meets-salty spam-flavored coating.” Now being these nuts tastes like spam, do you think we should stop at that? Of course not! How about a spam macadamia nut musubi!