Kauai Newsletter
September  2003

Aloha, everyone!

Whew! It's been a hot summer here in Kauai. Actually, our weather has been balmy and sunny with little rain and good surf conditions, about as close to perfect as you can get. It's the real estate market I'm talking about. Usually I'm not given to such statements, but keep reading and you'll see that in this case, it's the simple truth.

We'll start with the latest survey of resort property sales in Hawaii, conducted by a firm called Data@Work. From the year 2000 to the present, sales growth in Kauai has been an astonishing 166 percent. Maui's growth for the same period was 56 percent, the Big Island of Hawaii's was 15 percent, and Lanai's was a negative 30 percent (the island is very small, so percentages don't mean as much there.) Average rise in price of property sold in Kauai were also the highest, at 53 percent, compared with 39 percent for Maui, negative 5 percent for the Big Island, and negative 26 percent for Lanai (again, take Lanai's figures with a grain of salt.)

Every part of the island has experienced steep price increases in the past year, and nowhere is this more true than here on the north shore, where the median price of a single family home leapt from $859,000 in July 2002 to $1,300,000 this July. That's a 50 percent increase.

If we stick with Princeville and look at averages rather than medians, we get an average sales price for a non-ocean-view, non-golf-course house of $560,863 for the year so far, compared to $460,959 in 2002. For ocean view or golf course homes, the average has jumped from $666,778 last year to $836,827 this year.

Condo sales volume was up 50 percent this July compared to the same month last year. Prices this year are averaging $409,455 compared to last year's $350,500. Non-view lots (not acreage, just lots) are going for $235,139; last year it was $164,748. For view lots, the average is $347,196 this year, compared to $265,611 last year.

What do all these numbers mean? It's simple: Kauai is being discovered bigtime, and with a shortage of inventory and a massive influx of mainland buyers, prices are going up. This is especially true for the north shore. The area from Waipake (near Kula School) to Haena, which includes Kilauea, Princeville, and Kalihiwai Ridge as well as the north shore beaches, experienced the largest dollar volume, the most units sold, and the highest median prices compared with every other part of the island.

What is being done to meet the massive demand for property here? Well, remember, this is Kauai, so ... not a whole lot! Development is limited in several ways. Geographically, most of the island's interior is too steep and too wet for habitation. Of the relatively narrow band around the exterior, most land is owned either by the state or federal government or by old Hawaiian family trusts that remain cautious about development. Our local county government has also traditionally been anti-growth. And some local residents are concerned about well-heeled mainlanders changing the face of a once rural, working class community. The Honolulu Advertiser recently ran a story carrying the headline, "Homes for rich on Kauai fuel us-them debate" (6/16/03.) It really is a debate, and a valid one, and for the most part it's being carried out with the aloha spirit that permeates all social sectors of the island. After all, no one wants us to turn into another Waikiki. We want to stay green, though perhaps preserving every square inch of former canefield not the answer. It's in everyone's interest to have affordable housing. And keeping a sense of community is important, even as the components of that community start to change, as communities do.

So Kauai is struggling with responsible growth issues, and development is limited. Still, even in this climate, a few new projects have gotten the green light -- even a couple here on the north shore -- and others are coming up.The success of Villas on the Prince and Villas of Kamalii, two townhome complexes built in the past year or so (Villas of Kamalii is still under construction) have paved the way for a new generation of housing in Princeville. Condos here were built in the early 1980s, and often lack amenities that buyers today are demanding. The Villas complexes offer three bedrooms, three baths and a private garage, in addition to whatever custom-built features individual owners desire. Both developments sold out before construction began, and are reselling at considerably higher prices now.

In the works for Princeville are two more new townhome or condo projects. The first, the Plantation at Princeville, will consist of 68 two-story units on 5.68 acres. The condos are currently being offered for sale to long-term owner-occupants only, to give local people first crack at them under lower pre-construction prices. After a period of time, the remaining pre-construction units will become available to the general public. I'll have more information about this project next week, so if you'd like to know more, please jot an email or give me a call. Another parcel of land, adjacent to the Plantation development, is now under contract to be sold. This 10-are parcel will qualify for 151 new condo or townhouse units sometime in the future.

Real estate is a driving force on the island, but it's not the only game in town. As tourism continues to rebound after 9-11, the small businesses that dot Kauai's landscape are beginning to thrive again, and in some areas, notably home-oriented goods, sales have increased. Recent surveys show optimism on the part of local business owners. In Hanalei, the managers of Whalers, a general store there, have just opened a bookstore. They're starting small, offering Hawaiiana, best sellers, and cards as well as Hawaiian knick-knacks, to cater to visitors. If it goes well, they'll expand. Those of us who live up here would certainly welcome a bookstore that doesn't involve a drive to Lihue. We wish them all the best.

I'll close with a note about what we all come to Kauai for -- the beach. Many of you are familiar with lovely Kahili Beach, known here as Rock Quarry. The access road to the beach, a very rough drive or a long walk, was recently closed off by the owner due to problems with trespassing, illegal camping, abandoned vehicles, and dumping. Lack of beach access is a common complaint among many residents here. The owner wants to eliminate the problems that plague the road to the beach -- and to avoid being sued because of them. So she is considering donating the land to the U.S. Fish and Wildlife Service. That way a heiau and local gravesites could be protected, and beachgoers could still arrive on foot. The local neighborhood association may allow cars to travel there by permit.

It's an aloha solution, and one that we hope will serve as a guiding light as Kauai slowly, hesitantly, and sometimes erratically carves its path to the future.

That’s all for now. Please feel free to e-mail me with real estate questions, and remember, the week before your next visit to the island, you may CALL OR E-MAIL ME and I’ll e-mail you appropriate listings. You can then sift through them and select the most promising so that you don’t waste precious vacation time wandering around open houses or running to last-minute showings. I'll be seeing you!




With warmest aloha,