Kauai Newsletter
 

Summer  2004

Aloha from the Garden Isle!

It’s been a wet spring and summer so far, making our landscape even more lush and green than usual, and making us haul out our lawnmowers with annoying frequency. But the rain doesn’t last long, and visitors who run scurrying from the beach are soon back, tossing their Frisbees and basking in the sun, perhaps a bit too much, to make up for lost time.

The baby albatrosses tuck their bills snugly into their backs and don’t seem to mind the rain or the wetness of their nests. They are stretching their wings and practicing their flapping skills, to the delight of photographers. Some have already flown the coop, even with brown fuzz still on their heads. We miss them, and wish them a safe journey across the Pacific, where they sometimes have to travel as far as San Francisco Bay to find squid. Maybe some of you will spot them there, bobbing and diving like the expert fishers that they are.
BYPASS AT LAST

Perhaps the biggest news on our island is the award of $3,465,000 from Uncle Sam to extend a bypass road around Kapaa, which is the source of most of our traffic tie-ups. There already is a bypass around part of Kapaa, but it isn’t well-marked and most of our visitors don’t know about it. The new project will extend the current bypass from where it begins along Olohena Road up to Kuhio Highway at the north end of Kapaa town. Construction is scheduled to begin later this year. Our ambitious politicians envision this project as a temporary fix, hoping to eventually build an even more extensive bypass. But talk-story about bypass plans has been going on for years. This new grant will result in the first action to relieve the Kapaa traffic stress, and we all look forward to its completion.
ECONOMY AND NEW DEVELOPMENTS

And we’ll need it, because the visitors keep on coming. A recent county report noted that the tourism-based economy here is very healthy, with under four percent unemployment, by far the best of the neighbor islands and better than the nation as a whole. Those of you who have been coming for years may remember the double-digit unemployment the island suffered for many years after Hurricane Iniki struck in 1992. Now, the construction, services, and tourism sectors are booming, with construction jobs alone up 14 percent this year. We are, the report said, becoming more of a "celebrity destination." And along with that designation come higher expectations for accommodations and services, and new opportunities for providing them.

Some developers are already responding to the need. A Princeville developer is in the process of buying some land there for a very exciting high-end development. I am not allowed to put anything more about it in writing yet, so if you want further information, please give me a call AS SOON AS POSSIBLE..The last three new developments in Princeville sold out pre-construction. I am starting to take down names for this one.

Over on the Coconut Coast (the east side of the island), another developer has just bought the Aston Islander on the Beach, a popular resort next to Coconut Marketplace with direct access to a beautiful white-sand beach. The plan is to completely renovate the 200-room complex, "top to bottom, wall to wall," and convert it into condominiums, which will be sold to individual owners. They will be designed as vacation rentals, and will not have full kitchens. Please let me know if you would like to receive updates on this promising new project. Once again, I am taking names, so please give me a call, the sooner the better.

There are also some positive non-investment developments coming up. Not far from the Aston Islander on the east coast is the famous Coco Palms Hotel, immortalized in its heyday by Elvis Presley in "Blue Hawaii." It languished for years after Iniki wreaked its havoc, but has recently been bought by a developer who is seeking permits to rebuild the complex and restore it as closely as possible to a replica of its glory days. It will be an extensive (and expensive) job, but the owner believes visitor demand will well outweigh the trouble.

Down south, the owners of the Poipu Beach Hotel, long an eyesore on the upscale South Shore, are also finally seeking permits for reconstruction. It will be the last South Shore hotel to be repaired and reopened after the hurricane.

Another planned project won’t provide you with a place to stay, but will give you a fun thing to do. The owners of Kilohana, the historic plantation that is now the home of Gaylord’s restaurant, plans to re-create a sugar cane train like Kauai had in days of old. The train will loop around a 2.5-mile track on the Kilohana grounds, giving visitors a real-life feel for an important part of Kauai’s history.

REAL ESTATE SALES AND PRICES

Property sales continue to be strong as our ever-decreasing inventory butts up against ever-increasing demand from the mainland. Mainlanders are starting to buy all over the island now, not just in the resort areas of the North Shore and Poipu. Prices are rising -- how could it be otherwise? And the Baby Boomers, affluent and expected to inherit trillions of dollars in the not-so-distant future, are just starting to invest in vacation and retirement property here.

The number of year-to-date sales through May was up 22 percent for homes and 23 percent for condos, but down 28 percent for vacant land, perhaps because there is so little of it left for sale. Median sales prices for the same period were up 23 percent for homes, 44 percent for condos, and 53 percent for vacant land. Those are island-wide figures.

For the North Shore resort area, including Kilauea, Princeville, Hanalei and Haena, number of sales was up nearly 49 percent for homes, a whopping 69 percent for condos, and down 23 percent for land. Median prices in this area increased 38 percent for homes, 26 percent for condos, and 111 percent for land.

On the South Shore, the number of home sales was up 5 percent, condo sales were up nearly 29 percent, and land sales were down nearly 64 percent (there are even fewer parcels for sale here than on the North Shore.) Median prices increased 16 percent for homes, 22 percent for condos, and nearly 46 percent for land.

The median price for a North Shore home now stands at $895,000; for a condo, $525,000; and for land, $655,000.

Median prices for the South Shore are $400,000 for a home, $384,000 for a condo (including leasehold condos), and $375,000 for land.
IN PLAIN ENGLISH

Because there is so little inventory, home and condo resales are strong and moving at a fast clip. New construction is even more desirable, and usually sells out long before the first shovel hits the ground.

For buyers, this means it is important to be prepared. Loan prequalification is an extremely important asset to bring to the island when shopping for property. Equally important is the understanding that in this market, it is often necessary to act quickly and decisively to get what you want. Highly desirable properties that are priced right sometimes result in same-day escrows, or even multiple offers.

That isn’t to say that there aren’t still good deals (especially in light of the appreciation we're experiencing) and even the occasional bargain. It’s just a good idea to come prepared.

To that end, I invite you to browse among the properties listed on my website, silverpalmproperties.com, and ask me for sales comps on listings you find appealing. Even if you aren’t ready to buy yet, it’s an excellent way to learn about our market, and it's always fun to look at pictures of Kauai. I’ve got the entire Kauai MLS on there, with simple ways to customize your search.

That’s all for now. I hope to see you back soon. Please remember to let me know when you’re coming, and I’ll email you listings in advance. That way you won’t waste precious vacation time wandering to properties that don’t fit, but instead take a step closer to your own Kauai home.

With warmest aloha,