Kauai Market Update ~ Q2 2020

Kauai Real Estate Q2 Review

Since you last heard from us, there has definitely been an uptick in the real estate market throughout the state. After a few months of a good pause in the broader market during the height of the shutdown, people who had been on the sidelines have been catalyzed by the ongoing pandemic to either make Kauai their home (or get that second home they had long pondered). Much of this momentum has come in the past six weeks and as such, the Q2 numbers below capture far more of the ‘pause’ than the ‘pickup.’ In a year on year comparison of the second quarter, residential sales volume on the island fell 24% from $149.8M to $113.6M and number of sales fell 52.8% from 178 sales to 84 sales. With the exception of the North Shore residential segment, every district on Kauai saw a sharp decrease in residential sales volume and number of sales. North Shore Q2 residential sales volume actually increased by 54.7% with $56.2M of volume; however, this number is skewed by a single large beachfront Hanalei transaction that tallied in at $36.75M.

If you’d like to explore the numbers a bit deeper, check out the market snapshots below for Q2, or via the following link for an enlarged version – Kauai Snapshot Q2.

Monthly Sales and Median Price Statistics

The below chart depicts monthly sales and median prices for both the entire island and the North Shore. As we always do, we caveat this data with emphasis that the sample size is always small for Kauai and this must be considered when interpreting Kauai data and gleaning insights from it. Nonetheless, May and June do exhibit what we would tend to expect from the “pause” in the economy earlier this year with fewer sales, as well as a reduced median sales price.

Kauai Monthly Residential Sales & Median Sales Prices

Long Term Quarterly Median Sales Price Trends

In the quarterly data, median sales prices are off the bounces they saw in Q1, but they are still hovering around a fairly level trend in values that is quite evident going all the way back to 2017.

Kauai Quarterly Residential Median Price, 2010-2020

Reflections on Covid-19 and Kauai’s Real Estate Market

In our newsletter two months ago, we took some broad strokes on this topic. In this edition, we’re giving our focus to the high end market segment.

Sales Data for the high-end 

Through the first half of 2020, the high-end market appears well on par relative to recent years deemed “strong” for our Kauai market, and it is certainly impossible to deduce a negative impact to the market following the onset of the pandemic. At the midyear point, we have seen 12 sales across the island above the $3M sales price benchmark. Eight of these transactions closed prior to mid-March and four thereafter. Additionally, eight transactions were located on the north shore, one was located on the east side, and three were located on the south shore within Kukuiula. This is more or less on track with the 14 sales during the same period in 2019. Sales volume however has far exceeded the high end segment volume from mid-year 2019 with more than $89M in volume YTD versus $56.3M during the same period of last year. This increase in sales volume can be attributed to the same particular sale mentioned at the opening our newsletter, and which is noteworthy for several reasons. First, with a price point of of $36.75M, this sale included three adjacent beachfront homes along Hanalei Bay. Second, it is the first beachfront Hanalei sale since 2018 and it proceeded to close in the midst of the pandemic happenings.

Notable Listings

After a pause in the market at the height of economic shutdowns that transpired during April and May, pent up demand has started to hit the market since June. While we have seen entry levels of Kauai’s luxury markets display a lot of movement, Buyers at the upper echelon segments, as signaled through direct conversations with clients, as well as via market activity, have been waiting for Hawaii’s quarantine rules to lift before jumping in. In the meantime, we have been fielding more inquiries than ever for our highest end properties that can serve as true sanctuaries; places that can serve as self contained respites. These three listings have garnered the most interest during the lead up to reopening:

• 4228 North Waiakalua St – Offered for sale at $19,000,000 – A four bedroom / four bath home sits atop a ridge, positioned to take full advantage of the property’s spectacular ocean views. The semi-private, sandy beach below can be reached by private vehicular access or by a short walk across the property’s own garden of native species flora and multiple waterfalls.  The home also features a pool and hottub.
• 4200 Anini Vista Drive – Offered for sale at $33,000,000 –  Situated on a magnificent promontory, high above the beaches and lagoons of Anini on Kauai’s North Shore, this location offers sweeping views in literally every direction. The home was built in a pod compound style, blending elegant contemporary design with Hawaiian sensibility and indoor-outdoor living. Floor to ceiling windows and sliding doors throughout the home connect the more than 10,000 sqft of living space with lush surrounding landscaping and endless views. The property also features two guesthouses, a wine cellar, a pool and an outdoor kitchen.
• Wai Kala Ranch – Offered for sale at $40,500,000 – Wai Kala Ranch is a bountiful, remote, large acreage opportunity in the mountains of Kauai’s North Shore.The property comprises more than 372 acres of breathtaking land, flowing water, spectacular mountain views, and a ‘ranch meets modern’, 3,500 sqft, 4 bedroom, 3.5 bath home which completed a top-to-bottom remodel in 2019. Explore miles of horse riding trails across varied terrains in the backcountry of Kauai or take a backyard swim beneath a waterfall. The property also includes a completely remodeled guest residence, two custom truss bridges, a popular equestrian business and numerous equestrian structures.

At a time when quarantining at home is a real and persistent potential undertaking, all of these properties complement the utmost privacy with a lively, beautiful and uninhibited lifestyle.

Expectations and Predictions for Q3 and Q4

As has been alluded to, it is our expectation that the high end market segments should see significant activity in the coming months when quarantine restrictions in the state become more lax. Our colleagues in other luxury markets in naturally beautiful destinations such as Jackson Hole, Aspen, and Lake Tahoe have all expressed surges in buying and reductions in inventory levels, putting upward pressure on prices. We have already seen this in certain market segments on Kauai. At the high end we are seeing more requests for listing info than ever, coupled with other market signals such as increased requests for high end long term rentals. These Kauai market signals, along with the trends in other similar markets, give us a confidence that the Kauai high end market segments will follow a similar path once travel opens. We expect to see some very significant sales in the second half of 2020.

Explore more of our beautiful listings at www.nealnorman.com.