LIHU‘E — The median sale price of homes on Kaua‘i was around $1 million last month, with condos selling at a median price of $729,000, according to a new report generated by Hawai‘i independent real-estate firm Locations.
While median home sale prices have been rapidly climbing since the start of the pandemic, increases do not necessarily reflect pricing for small neighborhood family homes.
“I wouldn’t say that our average home on Hawai‘i is worth $1 million, (rather) the average home being sold right now is $1 million,” said Milo Spindt, a broker for Corcoran Pacific Properties. “Common everyday, three-bedroom, two-bath, 1,200 square foot homes are just not coming on the market.”
Housing inventory is a huge challenge for local buyers with limited means.
As of Monday, there were just seven houses and three condos listed for under $800,000 on Multiple Listing Service, excluding condos at vacation resorts, properties already in escrow and properties with a lease hold. This has led to a very competitive buying market.
“Buyers today are really aggressive because they know they have to be compared to before (the pandemic),” said Kela Caspillo a realtor broker at Kaua‘i Dreams Realty. “Before the pandemic, buyers were telling me, ‘Can we offer under asking price?’”
But now, Caspillo said her buyers are asking how much to offer over what’s listed.
Buyers are pooling resources to break into the housing market.
“We’ve been getting a lot of creative solutions,” said Ann Alo ,licensed mortgage broker and owner of Island Pacific Mortgage. “(When) there are two units (on one property), I’ve seen families go in together.”
Alo and Caspillo have both seen several first-time home buyers rely on contributions from parents toward a down payment. On the flip side, Caspillo has seen adult children help their first-time home buyer parents by contributing to household expenses to make mortgage payments doable.
Interest rates are still low, at just under 3%, which keeps financing options possible for some buyers.
“Without those rates, most people here wouldn’t have a chance to qualify (for a mortgage),” Alo said. “Even with really low rates, people are just barely qualifying to get into the market.”
That leaves Spindt with a big question. “When are we going to see interest rates start to increase, reducing affordability, putting a cooling effect on the marketplace for price increases?”
Increased interest rates will make qualifying for a home loan more difficult and could affect housing prices
“Once we see start to see homes sit on the market longer, we’ll start to see price reductions,” Spindt said. “That’s usually what happens when we start to see reverse on the trending.”
