LIHU‘E — A confluence of reluctant homebuyers and soft inventory levels led to a rough start to the new year for the County of Kaua‘i housing market.
Sales of single-family residences sank to 16 in January from 52 in January 2022, according to monthly data pooled from multiple sources by the Hawai‘i Association of Realtors in Honolulu.
That marked a decrease of 69.23 percent in the period, and marked the steepest percentage drop of the four major island markets featured in the monthly data.
At the same time, the median price of a single-family residence on Kaua‘i dropped 14.34 percent to $809,500 from $945,000. The percentage decrease was also the largest among the four islands.
“It’s back to that logjam,” said Jimmy Johnson, broker in charge at RE/MAX Kaua‘i, on the unwillingness of buyers to buy and sellers to sell in the first month of the year.
The combination of slumping home sales and prices last month was in stark contrast to the 2022 housing cycle. The 2022 cycle was notable in the sense that home sales were down each month when compared with the same months of 2021, but home prices were up.
So much so that the Kaua‘i housing market was the most expensive in the state, with a median sales price of $1,180,000 for the 12 months ended Dec. 31, 2022.
While the single-family home market was off last month, the condominium market was more robust on Kaua‘i, as evidenced by a 59.59 percent rise in the median price to $781,975 in January from $490,000 in January 2022. At the same time, sales eased 7.69 percent to 24 from 26.
“People are buying residential condos because they can’t afford to buy single-family homes,” said Johnson, who added that condos are also popular with buyers because of a strong vacation rental market.
Island highlights
O‘ahu was the only other island to record drops in home prices and sales to start the new year.
The median price for a single-family residence fell 7.62
percent to $970,000 in January from $1,050,000 in January 2022. At the same time, sales retreated 53.99 percent to 150 from 326.
The median price for a condo slid 2.94 percent to $495,000 in January from $510,000 in January 2022, while sales dropped 50.18 percent to 275 from 552.
Maui eked out a 0.43 percent increase in the median price for a single-family home to $1,162,500 in January from $1,157,500 in January 2022. But sales dropped 36.96 percent to 58 from 92.
The median price of a condo dipped 7.88 percent to $657,500 from $713,750 in the same period, while sales declined 65.38 percent to 54 from 156.
And, on Hawai‘i Island, the median price of a single-family home inched up 0.47 percent to $539,000 in January from $536,500 in January 2022, while sales fell 39.19 percent to 135 from 222.
The median price of a condo jumped 25.05 percent to $625,250 from $500,000 in the same period, while sales were down 47.83 percent to 36 from 69.
Mortgage rates
The island chain’s topsy-turvy start to the new year can be traced, in large part, to the state of long-term mortgage interest rates, which remain well above year ago levels.
The 30-year mortgage rate, which is the most popular form of home finance, bounced around from 6.13 percent to 6.48 percent in January, according to data from Freddie Mac, the mortgage giant. Those rates were nearly double from a year earlier.
The long-term rate climbed higher yet, in February, coming in at 6.50 percent for the week ended Thursday, Feb. 23.
A year ago, the rate averaged 3.89 percent.
Looking ahead, the 30-year rate appears poised to rise in coming weeks, given existing economic conditions.
“The economy continues to show strength, and interest rates are repricing to account for the stronger than expected growth, tight labor market and the threat of inflation,” said Sam Khater, chief economist for Freddie Mac, in a statement that accompanied a weekly report on mortgage rates.
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Wyatt Haupt Jr., editor, can be reached at 808-245-0457 or whaupt@thegardenisland.com.
