Short Sales and Foreclosure sales continue to be a vital segment of the real estate market on Kauai. Particularly when it comes to condominiums and what we call “condotels,” many investors paid top dollar for units that were cash flow negative to begin with on the hopes of appreciation. Now that those investors have to debt service units that are worth less than what they paid, many are pursuing short sales or simply walking away from the properties. At projects such as Kapaa’s Aston Islander on the Beach, there were two sales in the last month, both units closing for $95,000. These units originally sold for $285,000 in 2005.
Regarding Princeville real estate, many of the best values are either short sales or REOs (already foreclosed by the bank). In the last 6 weeks, there have been 12 new condos listed and 2 of them are Princeville condo short sales. Of the 11 Princeville condos in escrow, only two are short sales or REOs, reflecting the changing landscape amongst sellers who are starting to realize that to sell their property, sellers are competing with banks who are liquidating properties in the same market. Therefore, the best price may not always be an REO, it may be a truly motivated and realistic seller.
In the month of May, 21 Kauai properties island wide entered the foreclosure process. This means that the lender (bank) has delivered the original Foreclosure Notice of Default to the owner and started the foreclosure process. These properties range from the inexpensive Kauai Beach Resort, where units have sold for as low as $59,000, to a couple of the luxury town homes at Kaiulani, whose prices range from 850,000 to 2.7 million.
One stunning short sale offering on Kauai’s North Shore is a Nihilani 22c in Princeville listed for $565,000. This complex comprised of 34 tri-plexes (total of 102 units in the complex), with a very nice pool, jacuzzi and barbecue common area. Unit 22C has over 60,000 in upgrades including solid granite slab counters, deluxe DeWills cabinets, and travertine and custom stone in the bathrooms. The original owner paid $849,000.
Kitchen with granite counters, custom cabinets and high-end appliances
Nihilani 22c has luxurious bathrooms with maximum upgrades. Entire unit is stunning
As of June 4th, there are 216 homes or condos on Kauai involved in the foreclosure process. There are 20 REO or bank-owned properties, some of which are not yet on the market. There are currently 1,217 properties (not including land parcels) active in the Kauai MLS. This gives you a sense for the basic overall condition of our market. As is the trend with the mainland real estate market, sales volume has been steadily increasing in April and May, triggered by many good opportunities from both distressed and not distressed properties.
If you would like the most current list in PDF format of foreclosed properties on any region on Kauai, shoot me an email with your preferred neighborhood.