Ron Margolis Real Estate Podcast

The 2020 holiday season has officially begun! We hope you are as excited as we are. We’d like to take a moment to express our gratitude to all of you this Thanksgiving. We have met some truly wonderful people, and we’re proud to have helped so many reach their real estate goals over the years. We wouldn’t be where we are today without all of your support. Enjoy your Thanksgiving dinner—that’s what we plan to do! In the meantime, please don’t hesitate to reach out to us if you have any real estate questions. We would be happy to help you. Happy Thanksgiving

Here are the mistakes you never want to make as a home seller.   If you’re thinking about selling your home anytime in the near future, today I want to offer some advice. Here are seven critical home-selling mistakes that you should avoid if you want a smooth, successful, and  less stressful home sale: 1. Picking the wrong agent. Pick someone with experience who knows the market and has comprehensive marketing knowledge to highlight your property in the best light. You also want someone who is a great communicator, not only with you but also with other agents. “You’ve got to be level-headed as a seller.” 2. Overpricing the property. Consumers are more savvy these days than ever. They can get all of their information online to get a much better idea of what your home is actually worth. If it’s overpriced, they will know and many may not even come and look at the home. That may lead to a stale listing which can lead to lower offers and price adjustments. 3. Only considering the highest offer. There are many terms that make up an offer. Price is important, but it’s not the only thing you should consider. Don’t just automatically go for the highest price, look for the offer that offers the most value to you. 4. Failing to prepare your home. If there are simple fixes we can make, like painting or power washing, we want to do that before you start showing the home and put it on the market. You don’t necessarily have to remodel anything, but you do need to make your home shine. 5. Falling to declutter the home. Depersonalize the home so that a buyer can envision their family in the home. You’re going to be moving anyway, so why not get a headstart on moving by packing away those personal items. 6. Getting too emotional. A real estate transaction is a business transaction, and for some people, it’s one of the largest purchases they’ll ever make. You’ve got to be level-headed and detached emotionally so you can make sound decisions and manage the situation more effectively. 7. Not being flexible with showings. The easier it is to show the home, the better your opportunity to sell it, especially right here on Kauai.  If you have any questions for me about selling your home or about Kauai real estate in general, don’t hesitate to reach out via phone, text or email. I look forward to hearing from you soon.

As we make our way through September, the market is gaining momentum.   I hope this market update finds you safe and healthy. Here in Kauai, it’s been about a month since we’ve had any new coronavirus cases. Hopefully, this trend will open up the island to tourism on October 1 and accelerate the real estate market! Ever since the pandemic shutdown began about six months ago, our market has stayed stable. At 0:47 in the video, you can see that sales dropped in May and June, but things rebounded in July, and we ended August with 46 sales. As of the recording of this video, we’ve seen 22 single-family homes close during September. A year ago, we saw 24 closings during the same time frame, so it’s clear the market is regaining momentum.  Like the market in general, prices have stayed stable too (except for some vacation rentals). At 1:38 in the video, you can see that the median sale price of single-family homes has risen almost $100,000 compared to August 2019, which is a reflection of more expensive homes selling—particularly on the north and south shores. The volume of sales for single-family homes has also risen compared to August 2019, but the volume for condos has dropped, and the volume for vacant land has stayed relatively the same.  “It’s clear the market is regaining momentum.” Since real estate pricing is based on supply and demand, there will likely be downward pricing pressure for condominium projects that saw a significant rise in inventory with limited demand.  For example, back in March, there were just three active listings for the condotel project known as Ashton Islander on the Beach on the east side, but now there are 16. Just one of those has gone under contract in the last six months, and none have sold. Prices are commensurate with previous vacation rental income, so we know that these prices will need to adjust. These income properties won’t be producing what they did last year, and neither will they in the near future. Down the coast at the Kauai Beach Resort, another popular condotel with 35 units, there are 16 available units, and prices have started sliding downward. There were a number of sales in the last six months, but since they were all from one investor, that’s an exception to the rule. We see sales in the condo market for people who are coming to live here or don’t need to rent, but for the segment of buyers who are thinking about income to offset the cost of their vacation rental, the situation is different because it’s unknown how quickly tourism will recover.  In any case, it’s a great time to sell if you can price your property correctly. If you need help pricing your property, my team and I would be happy to provide you a price analysis. If you’re a buyer, the good news is that interest rates are still low. As I said, Kauai has regained some momentum because mainland buyers (primarily from California) want to move to more rural areas. We’ve had a number of transactions in the multi-million dollar market due to this trend. If you have questions about our Kauai market or are thinking of buying or selling a home soon, don’t hesitate to email me. A hui hou!

In our live stream conversation with Kaaina Hull, we discuss Additional Dwelling Units (ADUs), Additional Rental Units (ARUs), and the planning department’s efforts to help create additional housing on Kauai. Like many areas throughout our nation, affordable housing is a challenge on the Garden Island. According to Housing Director Adam Roversi, Kauai needs 5,000 new homes to meet the needs of its current population. Through a variety of projects, programs, and developers, there are numerous projects currently on the books in the near term including: • Ele’ele: Lima Ola – 650 units –Hoping to break ground on infrastructure work in the summer of 2020 • Kapa’a: Hokua Place and Kealia Mauka – Developments that’d provide housing in accordance with Ordinance 860 –Developers are working through a process still years out if approved • Kilauea – 2 acres – still in an investigatory phase in partnership with HPHA • Koloa: Koa’e Makana has 133 units is currently taking applications • Lihue: The ‘Ohana Zone –22 units – Lihue – targeted demographic needing social services – anticipated completion by end of 2020 • Lihue: Pua Loke  – 53 units – Lihue- anticipated completion by end of 2020 • Waimea: Hua Kai –  67 units – under construction –primarily a Habitat for Humanity project assisted by County financing. Rentals and for purchase will be available. As you can see, the projects above constitute less than 1500 units so we have a lot of work to do to mitigate our housing challenges. Of all the angles on building affordable housing that I have seen in my fifteen years on the island, Habitat for Humanity has architected the most affordable way to build homes.  On Kauai’s residentially zoned parcels, the county allows for options to add additional housing units and in the interview, we discuss the process, review the density, and costs. The ARU is a relatively new ordinance, released in 2019,  designed to add small rental units on properties either attached or detached. You can view the ARU ordinance here. The graphic below provides a definition of the dwelling unit types. On A-zoned property (agricultural) ARUs are not currently permitted. Feel free to send me questions regarding these expansion options and my team and I will get the answers for you promptly.   Dwelling Unit Count by Parcel Sq. Ft. Threshold

Today I brought on two of my team members to talk about why the Kauai Real Estate is likely to be different than the one in the great recession back in 2008-09.     Here are four good reasons why this economic slowdown we’re experiencing does not necessarily equal a housing crisis: 1. Buyers’ credit is scrutinized more heavily today than in 2008. It was much easier to get a mortgage during the Great Recession than it is today, which we can see by studying the historic data from the mortgage credit availability index. After the crash, however, lending standards tightened up a lot. In fact, since the pandemic and the resulting volatility in our stock market, the criteria for getting loans have gotten even tougher. When buyers are qualified for loans today, that means they’re serious, capable buyers. 2. We have a shortage of inventory in parts of our market. Unlike during the Recession, we have a shortage in our markets around our median price which is close to $600,000. A normal real estate market has approximately six months of inventory. Anything more than that is an overabundance that causes prices to depreciate; anything less than that is a shortage that will lead to continued appreciation. Despite over a month of stay-at-home orders, in many areas of Kauai, the housing demand still outpaces the supply. That’s a formula that may keep prices from dropping. 3. Home affordability is better now. Affordability is determined by three factors: the price of the home, the income of the buyers, and the mortgage rate available at the time. In 2008, prices were still high, wages were lower, and the interest rate hovered around 6%. Now, prices are high again, but income is also higher and interest rates are almost half of what they were 13 years ago, hovering around 3%. According to the mortgage credit availability index, the average family today pays less of their monthly income toward their mortgage payment compared to 13 years ago. 4. Homeowners are equity-rich—not tapped out. In a run-up to the housing bubble, many people used their homes as ATMs, only to learn a painful lesson. Today’s consumers are treating equity in their home much more cautiously. Over the last five years of appreciation, over 50% of American homes have more than 50% equity. In 2008, prices dropped rapidly, leaving some people underwater. That distressed housing market brought prices way down, but with the equity that homeowners have now, they’re less likely to walk away from their homes. That said, is now a good time to buy? If you’re already in escrow and are buying for the long term, the answer is yes—especially if you’re financing the purchase. With inventory having been in such short supply for so long, and with interest rates at historic lows, it’s hard to predict what type of slowdown we may have in Kauai’s real estate market. Certainly, March and April sales don’t tell us much, as many of those are closed sales that began before the pandemic hit.  It’s likely that interest rates may start to climb as the economy starts to recover, and anything you might achieve from saving and the lowering of prices could be offset by rising interest rates. Remember that for every 1% increase in rates, you lose 10% of your buying power. “With inventory having been in such short supply for so long, and with interest rates at historic lows, it’s hard to predict what type of slowdown we may have in Kauai’s real estate market.” When Kauai was first quarantined on March 25, economists predicted a V-shaped recession; that opinion has morphed some over the last several weeks. Now, the consensus is a U-shaped recovery. We know that housing is in a much stronger position now than it was in 2008, but nobody knows where this is all headed for sure—we’ll all have to discover what’s in store together. If you’d like to keep your finger on the pulse of today’s Kauai real estate market, don’t hesitate to reach out to us. In the meantime, stay safe and healthy! A hui hou.

I’m sharing a few updates about how Kauai is doing amid the pandemic. Learn about unemployment, safety, and more here.   Aloha, I have a quick update about Kauai amid the pandemic. If things continue to go as positively as they have been the last couple of weeks, soon the island will consider what our next steps will be concerning opening things up again. With an unemployment rate at 50% here, there’s a lot of concern about how to get back to tourism while keeping our island safe. We actually faired better than all the other islands in Hawaii, in terms of how we responded to the health crisis. Lately, our mayor has enacted stricter rules to keep the coronavirus at bay.

Mortgages rates reached all-time lows, then immediately started to climb. Here’s why that happened.   Rates have been dropping over the last month, and many people have been refinancing their mortgages to lock in lows of 3.25% and 3.5%. They’ve been dropping in response to the volatility in the stock market and the fear of the economy slowing down in the wake of the COVID-19 pandemic.  Last week, however, rates started to climb back up. Why did that happen? Usually, when the yield on the Treasury goes up, mortgage rates go up too, and when yields go down, mortgage rates follow suit.  Currently, the yield on the Treasury is as low as it’s been in recent memory—well under 1%. Counterintuitively, rates have risen though, and that’s due to several factors. One of the largest factors is that lenders are overloaded. A flood of applications has come their way, and they simply don’t have enough operational capacity to process all of these in a timely manner. This problem will be only exacerbated by the need for more people to work from home. “The best thing you can do is get pre-approved now so you’re prepared to take advantage when rates drop again.” An artificial rate hike allows lenders to curb the volume of refinances (if a sizable chunk of existing mortgages was paid off through refinance, lenders would see less in profits).  There’s a lot of uncertainty, but we’re likely looking at low or negative growth in our economy over the next six months, which supports the theory that, without any underlying inflation, mortgage rates should remain stable and low.  If you missed the wave of low rates, you’re more than likely to have a second chance. When everything settles down, and once the banks have a chance to process their loans, we’ll probably see another dip in the rates.  The best thing you can do is get pre-approved now so you’re prepared to take advantage when rates drop again. As always, reach out if you have any questions on this or other real estate topics. I hope you stay safe, and I look forward to hearing from you.    

SALES STATS 2ND HALF OF 2019 As we mentioned in our market updates at the beginning of last year, we anticipated a slowdown in sales of single family homes at the mid-to-lower price points. We anticipated, like with most of the nation, that the lack of inventory would keep prices strong. We anticipated that the luxury space (above $1M) inventory would continue to grow, with more sellers than buyers, and sellers needing to become more flexible to get their properties sold. The slowdown did not really materialize as low interest rates, low supply, and high demand sustained throughout 2019, helping to keep the market strong in the mid-range of the market. The high-end of the market did, however, lose some of its velocity.  Sales of homes on Kauai were down 3.01% from 598 units sold in 2018 to 580 units sold last year. Sales in the Kapaa-Wailua areas, however, were up 6.74% and in Lihue (the closest thing we have to an urban town-core area) sales were up 12.74%. But in the Hanalei District (Princeville, Hanalei and beyond) sales of single-family homes were down a whopping 21.97%, from 132 sales in 2018 to 103 sales in 2019. Princeville is often the area of highest appreciation when the market is rising. Has the market topped in Princeville? Or did the devastation from the 2018 floods have an effect on the North Shore in general? My notion is that both contributed to the reduction in sales. The slowdown in condo sales were more pronounced with a 15.8% drop from a total of 481 condos sold in 2018 to 405 condos sold in 2019. Sales of condos were down in the Lihue, Kapaa and Princeville areas. In Poipu however, the number of condos sold was almost identical, 149 in 2018 to 148 in 2019. The main reason: the Pili Mai project by the Kiahuna Golf course is almost sold out. Many units which had been pending for a year, were completed and the sales closed. In fact, because the project is now sold out, we are starting to see resales of units for 10-15% above their original costs in 2018 and 2019. INVENTORYThis inventory graph shows the number of active listings in the main categories (we are not including businesses or commercial) and we have continued to hover under 700 listings for most of the last year. September was the month with the lowest inventory for 2019,  January 2020 shows an inventory slightly up from 2019 January levels. Active inventory in February shows only 618 properties island wide with 217 listings under contract after the first week in February SALES PRICESReal estate statistics are a great way to take the pulse of a particular market but knowing what the number you are looking at represents can sometimes be confusing. There are two main stats regarding selling price. They are  Average and Median prices. Average and median are both measures of central tendency, but the average can be skewed by very large or very small observations. The median is basically the point in the middle of all the properties. Literally, half the properties are less than the median price and half are greater than the median. The average is, of course, simply the average. Take 10 sales, add up their volume, divide by 10 and voila, you have the average. People like to know the average price; however, the median is a better reflection of the market because the  median is less likely to be skewed by outliers, like a $24M sale on Hanalei Bay for example.  OK, that was a mouthful and maybe more than you wanted to know. You can google “average vs. median price real estate” to find other variants of the definition! The average selling price for a home is down 2.8% from last year. The median price is up 14.4% to $715,000. However, of the 277 single-family homes for sale, only 34 of them are priced at median or less.  For condos the average price moved up from $628,573 to $635,007 a modest change of 1% and the median condo price has dropped steadily since peaking in September. Since fall is typically our slower time of year, I can’t yet say this is a trend, especially since the median price is up 3%. DAYS ON MARKET The days on market is the number of days a property has been on the market until close of escrow. In many larger markets, San Diego, Silicon Valley, even Honolulu, the days on market have grown indicating a market slowdown. Here on Kauai, that number vacillates from month-to-month but there is no big trend there that we can see. Normal financed sales take 45-60+ days, so on average homes and condos are frequently on the market up to 100 days before they go into escrow. Listings priced accurately in the area of the market with strong demand helps to bring the days on market down. There are plenty of buyers waiting for the right property, and interest rates continue to be low, so if you have ever considered selling your property, it’s a great time to do so. As always, if you have any questions about real estate in general, feel free to give me a call or send me an email. I’d love to help you any way I can. Aloha and a hui hou!

Aloha! On behalf of my EXP Realty team on the beautiful Garden Island, I wanted to take the time to say thank you for trusting us with your real estate goals. We’re grateful for the opportunity to be of service.  My team and I work hard so that buying or selling real estate can be easy for you. We do our best to understand what your property needs and wants are.  We’re always grateful to share our resources with you, whether that connecting you with an electrician, handyman, or a plumber. If you want to plug into the community and give back through one of our many nonprofits, we know a lot about that and we’d love to share that as well.  “My team and I work hard so that buying or selling real estate can be easy for you.” As we move into the new year, I’d like for you to tell me if there’s a specific topic or question you’d like to know more about. Not only will I incorporate it into one of my videos, but we’ll also send you a little gift for your question.  We want to wish you a safe, healthy, happy and prosperous new year—we’ll see you in 2020!  At 2:00 in the video above, you’ll be able to see personalized messages from my team members Bailey Hutton and Gwen Margolis.  As always, if you have any questions about real estate in general, feel free to give me a call or send me an email. I’d love to help you any way I can. Hauʻoli makahiki hou!  

In addition to helping people with their real estate needs, whether they’re looking to find their perfect island getaway or thinking of moving back to the mainland, I love giving back to our community here in Kauai. It’s a beautiful place filled with wondrous nature and people who embody the Aloha Spirit.  One of the ways I work to give back to the community is through my rotary club. Back in 2006, I joined The Rotary Club of Hanalei Bay. Kauai has five rotary clubs, and if you’re not familiar with what a rotary club is, it’s a community service organization. Our motto is “Service above self,” and there are several causes we support.   For example, we have an environmental committee that takes on projects like monthly or weekly highway cleanups. Last year, we collected over two tons of trash along the stretch from the Princeville Center down to Anini Beach. We also work with the Hanalei Initiative to reduce the impact of cesspools along the coastal waters that were created by the 2018 floods. Additionally, we’re involved with creating a session on climate change at the 2020 Rotary International Convention in Honolulu.  “I love giving back to our community here in Kauai.” We also have a community service section of the club that works with Habitat for Humanity to supply funding and build homes in Anahola. We helped get the Kilauea Community Agricultural Center off the ground, and we’re in the process of designing a new building that will have community gardens that local farmers can use to grow and distribute their food. We’re also raising money to build a building that will house the farmers market and the North Shore Food Pantry. Our Heart of Gold campaign has installed 54 automatic external defibrillators around the island, which can save a person’s life in the event of cardiac arrest.  We also work overseas. We helped rebuild a school in Bolivia, for example, and we’re training surgeons in Romania in a pediatric craniofacial surgery clinic. We’re involved in Rotoplast, which provides free cleft palate surgery, and we’re building a clinic to provide post-surgery services.  There are plenty of nonprofits we also support, including elementary and high school mentoring clubs. Kauai has a high youth suicide rate. Studies show that last year, 9% of all Kauai high school students attempted suicide. Our after-school clubs are part of the action plan of the Kauai Resilience Project, which is to provide safe spaces and one-on-one attention in a mentoring environment.  Junior Achievement is another organization for which I serve on the advisory board. This organization provides financial education for elementary and high school-aged kids. When I think about the work we’re doing, it makes me reflect on my childhood and how I never had this type of education. All these years later, I still don’t see enough widespread quality financial education. Like I said, I (along with my wife) enjoy serving in these organizations and to giving back to the community. We also go the extra mile for our real estate clients. I’d love to hear about the organizations you’re involved with in your community, so don’t hesitate to give me a call or shoot me an email if you want to talk more about giving back.  As always, if you have any real estate questions, don’t hesitate to reach out to me as well. I wish you and your family a happy holiday season.    

Conditions in our market are continuing the same as they’ve been most of the year, though the volume of transactions was a mixed bag over the last four months as compared to 2018. For example, in July of this year, more homes and condos sold island-wide over last year. In August, more homes sold, but fewer condos left the market. In September, fewer homes and condos sold. In October, more of both sold. To me, that’s an indication that the market remains stable. Some associates of mine in Silicon Valley have told me that prices have gone down significantly. Surprisingly, that’s not the trend here on Kauai. Why is that? It goes back to the low levels of inventory. For 2019, the number of single-family homes is down by 4% over last year, and the number of condo sales is down by 18%. As of the recording of this video, there are 606 active listings. In terms of our inventory mix, this is pretty typical of what goes on in the nation. For homes in the resort markets, like Princeville on the North Shore, there are currently two homes listed for sale for under $1 million, and they sell at a rate of two per month. This shows us that we basically have one month of inventory. Conversely, there are 16 homes that are priced between $1 million and $2 million in the Princeville market, and they sell at a rate of one per month. That means if nothing else came on the market, it would take 16 months to sell all our inventory. Clearly, that segment of the market is slower. “The bottom line is that the market remains in a stable condition.” In Lihue, there’s only a total of six homes under the $2 million price point for sale and seven in escrow, meaning there’s still a shortage of inventory. For people who want a quality home starting around, say, the $700,000 price point, there really isn’t much to choose from. Interest rates are still low. At the end of October this year, the Fed decided to drop the rates again, but according to one of my associates at Wells Fargo Private Banking, Wells Fargo predicts that rates will stay the same in 2020. As of now, the rate for a 30-year fixed mortgage for a primary residence in Kauai is 3.875%. For a 10-year ARM, the rate is 3.625%. Jumbo rates are still lower than conforming rates, hovering around 3.5% for a 30-year fixed mortgage and 3% on a 10-year adjustable. The bottom line is that the market remains in a stable condition. Buyers can get deals depending on the negotiation skills of their agent and the motivations of the seller to give good value to the buyer. For sellers, there’s not a lot of inventory, meaning you’ll have reduced competition, but appreciation has lowered. If you want to sell quickly, you’ve got to have the best price for your particular property’s style. The longer you stay on the market, the more buyers will think that something is wrong with your listing. If you have any questions about the markets from Waimea and Kekaha all the way to Hanalei, reach out to me. I’d be happy to provide you with specifics from your area. Aloha and a hui hou!   

Here on Kauai, we currently have just over 31,000 housing units, and 63% of them are owner-occupied, meaning 38% of our homeowners are from the mainland (1% are owned by foreign investors). While Kauai homeowners who live on the mainland account for 35% of the housing, many of them vacation rental properties, the mainland owners account for 50% of the dollar value of the homes.  65% of Kauai’s housing is owned by Kauai residents which accounts for 49% of the home values. The population of Kauai has increased from 67,000 in 2010 to 72,000 according to last year’s census. Interestingly enough, according to Paul Brubaker from EZ Economics, our current domestic migration is negative; that means we have more people leaving the island than we have coming in. Housing affordability is a key part of that trend. Back around the time of recession that started in 2007 and 2008, we had over $300 million in permits issued for housing each year before it sunk in 2010. Since then, the number of homes being built has only come back gradually. To give you an idea of the chasm, it’s projected that by 2035 that Kauai will need 9,000 more housing units. And yet, from 2015 to 2019, there were only 994 building permits issued. The projected demand of housing is that we will need another 4,400 housing unit by 2025. You can see how large the gap is between what is needed and the run rate of what is being built! As you can see, Kauai’s housing sector has a lot of challenges to face. One of those challenges is infrastructure; things like water, wastewater systems, road improvements to alleviate traffic. One interesting thing I learned at the seminar was how cars and traffic have nothing to do with housing units. In fact, since the 50s, the number of cars on the island has tripled, so the idea that we shouldn’t build more housing because it will make more traffic is one made in error. “It’s projected by 2035 that Kauai will need 9,000 more housing units.” So if you’re thinking about buying property on the island of Kauai, it’ll come as no surprise that, because of building costs, most of the properties currently available couldn’t be rebuilt for the price they’re selling for. Over time, labor costs and material costs will increase because most everything comes from the mainland. As I’ve said  before, we’re starting to see a deceleration in our home value appreciation. Though the market isn’t likely to crash anytime soon, the demand and the costs are such that the house appreciation that we experienced since 2015 has leveled out. Of course, the 2020 presidential election and all the talk of recession probably aren’t helping things. Habitat For Humanity did bring a bright note to the conference: The Kauai chapter actually builds more homes per year than all the other chapters around the state. They’ve figured out a way to build and deliver a home for $270,000! Now, costs are kept down because the families that build with Habitat For Humanity have to put in a lot of sweat equity, but still—in a place where the median price of housing is over $600,000, to have a home for $270,000 is really a remarkable achievement. I left the summit thinking that maybe the county should hire Habitat For Humanity to make better inroads in our affordability crisis.  If you have any questions about housing affordability or insights or thoughts about solving our challenges, reach out to me. I’d love to speak with you. Perhaps your community has found solutions that could be used on Kauai?  Mahalo Nui Loa and Aloha from Kauai!  

Now that we’re past the midway point of 2019, it’s time to assess the state of our Kauai market by looking at some of the latest year-to-date statistics. As I’ve said previously, our market—like many markets throughout the US—has slowed down just a little bit, and prices have leveled off as well. Island-wide, sales are down 10.7%, and the volume of those sales decreased by 24% from $612 million to $463 million.  The median sale price of single-family homes, meanwhile, dropped 12% from $732,000 to $642,000. Because this statistic represents the middle of the market, though, it can be influenced by a small number of transactions.  As we delve further into the latest numbers, we see more revealing data. Market prices have been rising since 2014, and right now we have a lot of properties listed at or near the top of the market. There’s still robust activity going on, but that’s not the case in the luxury markets. In the North Shore, for example, sales are down 32%, and the volume of those sales dropped 65%.  As I’ve mentioned before, this could be because there weren’t enough multi-million dollar home sales during the first six months of the year. In general, though, because prices are highest in the North Shore and appreciate the most, it’s normal for conditions to stagnate. “Our market—like many markets throughout the US—has slowed down just a little bit, and prices have leveled off as well.” If you’re a seller, it’s still a good time to get your property sold, but a global event like a trade war with China will have an immediate impact on our market.  In the more affordable areas of our market, such as the east side of the island, year-to-date sales are up 13.25%, the volume of those sales is up 24%. This is where more affordable homes are located, so there will naturally be more transactions. Demand is still strong, and prices are still inching upward.  The number of active listings has remained fairly consistent. As of the recording of this video, there are 644 homes on the market and 235 properties under contract. A significant number of properties under contract come from two specific projects: the PiliMai luxury air-conditioned townhomes in Poipu (38) and Ho’oluana development by DR Horton (13). If you have any questions about any of these statistics or the future of our Kauai market or you’re thinking of buying or selling a home soon, don’t hesitate to reach out to me. I’d love to help you.  

I know that many of you are interested to learn more about how last year’s flooding has continued to impact the north shore of Kauai, so I recently sat down with a special guest to discuss this topic exactly. This guest, Joel Guy, is a long-time North Shore resident, as well as the newly appointed executive director of the Hanalei Initiative—a nonprofit organization whose goal is to help the North Shore to recover and move forward with improved sustainability practices following the flood. Cited below for your convenience are timestamps that will direct you to various points in the video. Feel free to watch the full message or use these timestamps to browse specific topics at your leisure:  00:13 - An introduction to today’s video  01:40 - Joel explains the recovery process of the North Shore and where things stand today 08:40 - How residents of Kauai have responded to the recovery plan put in place by the Hanalei Initiative 10:32 - What to do if you plan to travel to Kauai  15:20 - A few closing words about traveling to the North Shore If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.     

If you’re in the market for a new home, today we’ll be going over five tips you should keep in mind: Know your budget. It’s important to understand how much you can afford. If you’re going to be getting a mortgage, make sure to get a pre-approval—this will help you see exactly what you’re qualified to buy and will also strengthen your offer. Be prepared to write a letter. Tell the seller about you and your family’s situation, why you want the property, how great the property is, and so on. Forming an emotional connection with the seller can help your offer get accepted. Separate your needs and your wants. Since there is a low amount of inventory currently on the market, it’s unlikely that you’ll find exactly what you want. You’ll have to make some tradeoffs, so focus primarily on what your needs are instead of your wants. Bid competitively with minimum contingencies. When a good property comes on the market, it’s going to sell very quickly. Make sure your offer stands out (in a good way). Be able to make a quick decision. As mentioned, things get competitive. If you have everything lined up and the perfect home goes on sale, jump on it.  If you have any questions or would like more information, feel free to reach out to me. I look forward to hearing from you soon. 

I’ve got a quick market update for you today that covers the first quarter of 2019 here on the garden island.  Sales have slowed so far this year and the market is continuing to level off. When we go on the MLS and look at the list-to-sale price ratio, there are a few more discounts happening these days. Homes are selling a percentage point or two lower than they were, which is further indicative of the slowdown. One of the curious things that we’re going to need to keep a closer eye on is our volume. The decrease in the number of transactions is somewhat related to our limited inventory. I keep waiting to see that inventory grow, but it just hasn’t happened yet. There are only 268 homes for sale on Kauai, along with 210 condos and 171 parcels of land. That gives us a total of 649 listings. That’s a pretty low figure for our market. “We’ll continue to keep an eye on the market for you.” Another thing I’ve noticed is that the number of home sales is down by 58% from last year. The dollar volume of those sold homes is down a whopping 70% from last year. This is all the proof I need that the market is slowing down. This slowdown could be a good thing for some. It might give buyers more motivation to be flexible when making offers.  Another big benefit for buyers right now is interest rates. Mortgage interest rates are right around 4.28% for a conforming loan here in Hawaii. Jumbo loan rates are even lower. This is all good news for buyers, although the limited inventory might make things a little more tricky in the interim. The bottom line is that the median price is up, the volume is way down, and we’ll continue to keep an eye on market prices for you as they change. Whether you’re in the market to buy or sell, we’ll help get the right information out to you so that you can make an informed decision. If you have any questions about the real estate market or real estate in general, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

  For historical perspective, Kilauea’s founding dates back to the 1800s and the growth of sugar plantations. The industry survived in the town for close to a century when, in 1971, the last plantation was shuttered.    Since then, the area has evolved and expanded in new ways. Up until the last decade, in fact, there was a scarcity of entertainment and shopping resources. That began to change in 2004 when Bill Porter, founder of E-Trade, moved to Kauai and purchased 500 acres on the Malka side of the island. A vision for creating a community for arts and education was the impetus for Bill’s decision, and he and his wife created ‘Anaina Hou,’ or a new gathering place. Along with this enormous undertaking, we’ve seen exponential development in other areas as well. Here are just a few of the many amenities and features Kilauea boasts (from 1:45 to 4:25 in the video, you can hear about them all in full detail): Kauai Miniature Golf and Botanical Garden The Porter Pavilion  A brand-new community playground Kilauea Lighthouse Village shopping center A 75-acre community farm  Kilauea Elementary School Let’s now turn our attention toward Kilauea real estate; it’s somewhat of a tale of two markets. The town itself is made up of residential lots and for-sale homes are few and far between. At the time of this recording, there are only three active listings on the market; demand is high and inventory is considerably low. The other half of the real estate market here is referred to as “Kilauea AG.” On this side of the market, real estate is comprised of agriculturally zoned land with scores of larger gentlemen estates. Though the land is considered agricultural, very few of the properties are used for farming purposes. As of this recording, there are 33 properties for sale, the least expensive of which is priced just under $1.2 million, while the most expensive is $22 million. The coupling of the beach views and the prestige of the addresses themselves puts these homes squarely in the high-end market. As such, they are priced commensurately.   No matter what you’re looking for, Kilauea might be the place for you. If you have any questions about this town situated on Kauai’s north shore, I’m here to answer them for you. I look forward to hearing from you! Aloha!

Looking back on 2018, the largest issue of the year was the series of floods that damaged the North Shore, a small neighborhood in Koloa on the south side, and Anahola. Eight months later, those communities are still recovering from that incident. In fact, on January 3, the new mayor issued the sixth iteration of an emergency proclamation, which extends the flood-relief process. Part of that emergency rule prohibits the operation of transient vacation rentals on the north side of the island in the Lumahai, Wainiha, and Haena areas in particular. For the folks on the northern side of the island that depend on their vacation rental revenue, it’s a very challenging time. On the flip side, the new county government seems to be strongly focused on not only housing, but also on clamping down on the enforcement of illegal vacation rentals. Recently, they issued a $130,000 fine to an operator by the Wailua River who’d been operating an illegal vacation rental. That in mind, if you’re thinking about buying property on Kauai with the intent of renting it as a short-term vacation property, I strongly encourage you to make sure it’s a legal vacation rental. One in eight homes on Kauai is a vacation rental, and the government sees that as something that contributes to the high price of housing and destroys our communities. I don’t necessarily agree with that. However, the county strategy is to become much stricter on enforcement. In terms of affordable housing, one of the ideas the mayor mentioned in his radio interview was of leasing county or state land to large developers so that they can defer those costs and bring in housing that’s much more affordable for the median income of Kauai households. As we move further into 2019, we still have three relatively new projects Down the South Shore, the folks from Brookfield continue to build out PiliMai, which are some of the nicest, most modern condos that run along the Kiahuna Golf Course. The 2-bedroom units there are running in the $700s, and the 3-bedroom units run in the $800s.  On the east side, DR Horton continues to build out their project in Honolulu, which provides some of the most affordable housing on the island in terms of new construction. These large 3- and 4-bedroom homes are in the $500,000 range, though they’re on small lots.  On the North Shore, we have the North Shore Preserve, which is a swath of land owned by Jeff Stone and the Principal Corporation. These are spectacular lots with one-of-a-kind, mind-boggling views of Hanalei Bay and Valley High. They will be selling for between $5 million and $6 million. Overall, this last year was very successful for tourism. For those with vacation rentals, tourism revenue was up 9.2%, the highest level in 25 years on Kauai. However, this does create the problem of over-tourism; there are more tourists here than our infrastructure can support. “The new county government seems to be strongly focused on not only housing, but also on clamping down on the enforcement of illegal vacation rentals.” The focus for the future will be on improving our roads and wastewater systems so as to be able to support more visitors, or else to find a way to minimize the number of visitors coming to the island. An example of that point is the airlift onto the island. In fact, Southwest Airlines launched its first certification airlines earlier in February; as soon as they’re finished with that process, you’ll be able to get affordable flights from Southwest. For those of you with Southwest frequent flyer miles, it might be a great opportunity to get an inexpensive or free trip to the islands. The county doesn’t really have control over that, which is part of the drive behind the county’s push to improve infrastructure, roads, and so on. These are some of the key issues relevant to us on the Garden Island. Hopefully you get to visit us soon! If you have any questions about local issues or about buying or selling real estate, please reach out to us. Our marvelous team would love to be of service to you. Aloha!

As we close out the year, how is the Kauai real estate market? We’ll be exploring this question today in our latest market update. Cited below for your convenience are timestamps that will direct you to various points in the video. Feel free to watch the full message or use these timestamps to browse specific topics at your leisure: 0:55 - Was 2018 a buyer or seller’s market? 1:51 - Explaining this year’s absorption rate and inventory levels 3:00 - How market statistics for the island have changed since last year 3:50 - How our area’s “micro markets” differ 4:50 - Is our market beginning to shift?  If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.

During this time of year, we think about how much we have to be grateful for. Thanksgiving is a time to give, a time to love, and a time to reflect on things that mean the most in our lives. This Thanksgiving, we are especially cherishing the weeks, hours, and minutes that we’re able to spend on the beautiful island of Kauai. To all of our family, friends, neighbors, clients, and co-workers: We wish you a truly beautiful and bountiful Thanksgiving. 

Today I’ll be talking a little bit more about the island of Kauai. It won’t be so much about real estate this time; I thought it might be useful for folks on the mainland to learn a little about what has been happening on the island since Tropical Storm Olivia. Back in April, you might have heard about our torrential rains. Many have the idea that the whole island is underwater, but it really only affected a few parts of the island. A stream in Koloa Town flooded and caused some home damage, most of which occurred on the North Shore. In just one day in April, there was 36 inches of rain that caused a number of traumatic effects: In Hanalei, it rerouted rivers, and the Hanalei Pier was basically sitting on sand. It’s only now that Black Pot, the park adjacent to the pier, is being repaired. In addition to the dozen mudslides we endured, parts of roads were actually removed. Though it’s been many months, that part of the island is still inaccessible. Those who live out there can get special passes to a convoy that travels twice a day to and from that part of the island, which is really the only way to get around the area. This is an interesting moment for Kauai. There are a lot of vacation rentals on that section of the island, but of course, many of those folks are out of business. We just have to wait and see what the eventual outcome will be; the state just instituted the Haena Master Plan, which, in essence, is a plan to limit the number of visitors to the area, to install parking, as well as to repair certain features in the area. Almost 3,000 cars a day were traveling to the area prior to the plan. People love to come and hike the trails and reach the places that one can only get to on foot, by boat, or by helicopter. The hope is that the master plan will normalize activity in the area by next year. “Overall, I think we’re learning to respect the power of nature.” It has been a challenging time for the island of Kauai. Many people lost their homes, and there are still those that need housing and food. Some lost their jobs because commuting to work and back became difficult or impossible. We’re still in a recovery phase her on the island. However, it is important to note that the rest of the island is still in good shape: Tourism is strong, and so is the real estate market. We haven’t seen much of an effect on property values yet, besides those multimillion-dollar homes that were destroyed and had to be rebuilt.Overall, I think we’re learning to respect the power of nature. If you have any questions about the state of Kauai’s recovery process or about real estate here on the island, feel free to reach out to me. In the meantime, stay safe from any storms that are forming. A hui hou, and aloha!

Here at the Margolis Team, we work in real estate because we love to help people. One of the most enjoyable parts of the job is helping people learn about Kauai. Sure, we can help you learn about its properties and negotiate for them on your behalf, but we also want to help you understand what life is like here, tell you about its great resources, and share what we’ve learned after living in Kauai for 15 years. This gives you all the support you need—not just in real estate, but in all aspects of your life here on the island.   When working with sellers, for instance, it’s rewarding to understand what their needs are and help them as if they were a member of our church or our family. We put our whole hearts into getting you the results you need, and when we get those results, it’s fulfilling for us as well. When we don’t get the results we want, we at least know we’ve given it our all. “We put our whole hearts into getting you the results you need.” Another reason we do what we do is so we can have the time and money to contribute to some of the great causes of Kauai. One of the nonprofits we support (and I serve on the board of) that’s particularly relevant to this time of year is Aloha Angels, whose mission is to enhance the quality of life of middle and elementary school teachers and students. One of the initiatives we’re working on right now is something called “Adopt an After-School Club,” which works to improve after-school clubs. This year, we’ll have about 50 clubs on the island. This project serves an important need because Kauai middle schools and elementary schools normally don’t have after-school programs. By creating these enrichment programs, we’re providing emotional support for kids who may not be getting it from their own families. It’s very fulfilling to be able to help these kids, and it is similar to what we experience when working with buyers and sellers. If you’d like to learn more about Aloha Angels or you’d like to help them with their mission, you can visit their website AlohaAngelsKauai.org. It’s a great opportunity to interact with kids and share what you’ve learned with the next generation. As always, if you have any questions for us or you have any real estate needs, don’t hesitate to give us a call or send us an email. We’d love to help you.

Our new website is here, and today we are excited to give you a look at how to navigate all the features it includes. Feel free to follow along in the video above for a step-by-step demonstration. Even more so than in the past, our new website makes it easy to find the valuable, current information you need to pursue your real estate goals. As a reminder, you can find our website at www.kauairealestatesearch.com. Once you’re at our home page, the first thing you will see is our convenient search feature. This tool allows you to look through properties in any area you’d like, whether you want to browse an entire ZIP code or just see a specific address. “Our new website makes it easy to find the valuable, current information you need to pursue your real estate goals.” After inputting your search, you’ll be shown all listings that match that criteria. You will also be able to see which properties are new, which have recently had a price reduction, which are pending, and more. The website will show you the most recently listed properties by default, but if you click the arrow at the top left-hand corner, below the Margolis Team logo, a drop-down menu will appear. This menu will let you customize how you’d like your results to be sorted, allowing you to sort homes by lot size, price, number of bedrooms or bathrooms, the year it was built, or square footage. By clicking on any of these search options, you can filter listings shown to you by any specific features or criteria you’re interested in. And just like on our previous site, you can still save all of your favorite listings by clicking on the heart icon displayed over each listing. These listings will then be compiled into one convenient “favorites” folder that you can access at any time. Of course, our website has great features available for sellers, as well. Whether you’re seriously considering listing or are just curious about the market, clicking on the Home Valuation link at the top of our website will allow you to enter your street address and get an instant home-value estimate. When you use this feature, you will be given a very accurate value range that reflects where your home stands compared to other comparable properties. If you would like a more in-depth analysis, though, please get in touch with me so I can give you a more thorough valuation. Finally, buyers, sellers, and homeowners alike will be interested in the last feature of our website we’re going to highlight today: our blog. Clicking on the blog link will lead you to all our past posts, which include videos and articles just like this one. There are new entries twice a month, so be on the lookout for updates. We love bringing you valuable information so that you can stay on top of your real estate goals. If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.

*This video contains a couple of statistical graphs to illustrate points about market value and number of visitor to the island which effects the vacation rental market. If those stats interest you, you might want to pause the video to look at the graphic.*What lessons did we learn from 2007? There are five big ones which I am going to go over with you. 1. Do not buy a home that you cannot afford. Many people felt the pressure of a brisk market from 2006 to 2008 and decided to buy for fear of being locked out. However, if they would have waited a few years, there would have been an opportunity for them. Since many people buy homes on Kauai as second homes or vacation rentals, they have multiple mortgages which affected them greatly when the economy slowed. Once that happened, there were fewer people vacationing and those travelers were not renting their homes. Keep that in mind if you are planning on buying a home and relying on the vacation rental income, as economic slowing can occur again. 2. Do not always believe that your home will go up in value. Real estate markets are cyclical. If you look at the graph at 1:54, you will see that while the market has averaged an annual appreciation rate of over 5% in the last couple decades, you will see that that increase is not a straight line. Instead, the graph fluctuates. This trend is especially true of second home destination marketplaces. 3. Ensure that you have adequate reserves. Financial experts tell us that we should always have six months of savings as liquid funds in case something happens economically to you specifically or globally. Here on the island, when the economy slows, so does the travel industry. This could cause a lot of problems for you if you are relying on vacation rental income to pay your mortgage.   “Financial experts tell us that we should always have six months of savings as liquid funds.” 4. Make as large of a down payment as you possibly can. While there are a lot of options for low down payments, if the market drops 10% down the road and you have only paid 3.5%, you may find yourself in a tricky situation if you need to sell. 5. Buy low and sell high if you can. If you’re holding out for the long term or fixing and flipping a home, though, those may be good strategies too. If you have had your home for a few years, it may be a good time to sell if your investment in your home is discretionary. Currently, the market is very strong, and you could sell your home for much more than you paid for it years ago. I hope that you can reflect on what happened in 2007 so that you can make the right choice for you now. If you have any questions about this, would like help interpreting the current market, or are interested in buying or selling, please feel free to contact me by phone or email. I look forward to speaking with you about your realty needs.

In my latest vendor spotlight, I’m joined by Gabe Prieto of Kauai Restoration & Cleaning to talk about how mold affects homes in our area and how he can help you prevent mold from growing in your home. To hear our full conversation, watch the video above. Listed below are time stamps of our conversation and the topics addressed during those points so you can skip ahead at your leisure: (1:21) The regular and additional services Kauai Restoration & Cleaning provides.(2:09) Their process of identifying mold and the tools they use to do so.(4:13) Locating and assessing black mold.(5:15) Which labs they use to test their results and the typical turnaround time for those results.(7:05) What homebuyers get when ordering one of their inspections.(7:38) Their recommendations for making preventative measures in your home.(8:34) The main problems homeowners call them about.(9:25) Other maintenance tips you can apply to prevent mold.(10:46) The history of Kauai Restoration & Cleaning and their credentials.(11:55) Their pre-inspection services. “Every one to two years, your open-beam ceilings need to be treated for mold.” If you have any questions for Gabe or need his help with a mold problem, you can call him at (808) 346-7344 or visit their website. If you have any other real estate questions for me or there’s anything else I can assist you with, don’t hesitate to reach out to me. I look forward to hearing from you.

From a buyer’s perspective, what did we learn from the 2017 market about buying a home on Kauai? First, prices have come back from the bottom of the market in 2011 and 2012. Depending on the transaction, they are almost back to where they were at the top of the market. Most areas still have another 15%, 20%, or 25% to go. One of the things that started happening toward the end of the last year (that’s very prevalent now) is we don’t have a lot of inventory. You might look at the national statistics and think that real estate sales are down. However, the sales volume is down because inventory is down. What does that mean for you as a buyer? You need an agent who is going to pay attention so that you can react quickly when the right home at the right price comes on the market. You also need an agent who networks with other agents because other agents may have access to pocket listings. A pocket listing means that there is a seller out there who tells their agent, “I don’t want to put my home on the MLS but if you find a buyer, here’s the price that I want.” “As a homebuyer, you need to be prepared to move quickly in a competitive market like this one.” Finally, make sure that you get an agent who is aggressive and will help you figure out the right price to get the property. A good agent will encourage you to write a personalized letter to create an emotional bond with the seller so that you get the house you want. On the bright side, interest rates are still good. There are rumors that the Fed will raise rates a few more times this year, but that may or may not affect mortgage rates. Ultimately, if you want to buy a home, the 2017 market has taught us that you need to be prepared.Have your pre-qualification letter ready. If you are paying cash, make sure you have proof of funds. Get that personalized letter written and put together a great offer. When you work with our team, we’ll send the offer and follow up with the seller’s agent to put you in the best position in a market that’s increasingly competitive. If you have any questions for us, just give me a call or send me an email. I would be happy to help you!

What’s the final word on our 2017 market? What can you expect from the market in 2018? The 2017 Kauai market was bustling and brisk. The overall number of transactions was up over 12%, and the dollar volume of those sales rose 5%. This means more money was invested and traded in real estate in 2017. Here’s a closer look at how the median prices for single-family homes and condos played out across all five zones in Kauai: Starting in Waimea, the median price for single-family homes rose 10.67%. There were no condo trades because there are no condos in that area. In Koloa, prices for single-family homes rose 6.15% and prices for condos rose 8%. In Lihue, prices for single-family homes rose 4.8% and prices for condos rose 13.1%. For condos, that number doesn’t necessarily mean that prices went up - just that the trades were higher because of a lack of inventory. In Kawaihau, prices for single-family homes rose 9.76% and prices for condos dropped 31.16%. In Hanalei, prices for single-family homes rose 1.32% and prices for condos dropped 12.44%. Now, what can we expect from the 2018 marketplace? If things continue as they are (and there’s no reason to believe they won’t), we’ll keep seeing strong demand for property and only a limited amount of housing available. Prices should continue to rise, and tourism should continue to stay strong, so if you own a vacation rental home, you should see good returns. “2017 was a great year for Kauai, and 2018 looks to be very promising.” Prices for single-family homes in the modest price ranges will continue to trend upward. There continues to be a couple years’ worth of supply in most areas on the island for homes priced over $2 million, but down toward $550,000 and $600,000 range, buyers could find themselves competing for homes in multiple offer situations. 2017 was a great year for Kauai, and 2018 looks to be very promising. If you’re a buyer, it’s still a good time to get a toe-hold on the marketplace. If you’re a seller, the market is strong as long as your home is priced and marketed correctly. If you have any questions about our market or you’re thinking of buying or selling a home soon, don’t hesitate to get in touch with us. We’d be happy to help you achieve all of your real estate goals, and we wish you a healthy, happy, prosperous 2018. Until next time, aloha!

Aloha and happy holidays from beautiful Kaua’i! My wife and I have been very blessed to have helped people find or sell homes for the past 13 years. Whether people come to Kaua’i for retirement, to find a slower pace of life, or to find a more exciting life hiking, biking, surfing, and golfing in this beautiful area, it’s a place where families come together to make memories for a lifetime. This holiday season, we want to say thank you to those we’ve had the privilege to serve. To those of you who may one day own a piece of paradise or need to sell a property here, we value the opportunity to be of service in the future. “You have made it possible for us to give back to the community.” As we reflect on 2017, we know that you have made it possible for us to give back and serve our community in many ways. As some of you may know, Gwen and I serve through rotary. I am also an active board member of Junior Achievement, where we provide a financial education to our kids. I’m also a board member with Aloha Angels, a beautiful nonprofit which has raised over $2 million in the last four years to make lives better for teachers and students and improve education on Kaua’i. I am grateful to work with my wife, Gwen, my superb assistant, Bailey Hutton, and our transaction manager to provide the highest level of service, attention, and dedication to those we’ve had the privilege to serve. After all, this is likely the largest transaction of your life. I am proud to be part of a team that is committed to your success regardless of any challenges. On behalf of my team, I would like to wish you joy, health, peace, and abundance through the holidays and the new year. May you spend time with your family and be filled with gratitude and recognition for all that you have been blessed with. As always, if you have any questions, please don’t hesitate to reach out to us. Mele Kalikimaka me ka hauʻoli makahiki hou!

What should you do when you get multiple offers on your property? If you have a great home that’s been priced, staged, and marketed properly, you may find yourself with multiple offers. That can be scary for people because they’re not exactly sure what to do. Just yesterday, a condo came on the market in Princeville that was priced very well. I called the agent to take a buyer up there, and they said they had 15 showings already. I’m sure that seller will receive multiple cash offers today. That does happen in our marketplace when homes are priced correctly. If you receive multiple offers on your home, you have three options. First, if you get one offer that is superior to others, you can go ahead and accept the best offer. If one offer gets you the best price and the terms you want or if you’re not sure the other buyers are qualified, you may be better off accepting the best one. “You can ask the buyers to come back with their highest and best offers.” You can also counter the offer that you think is best or counter all of the offers. Let’s say that you get three offers and decide to counter all of them. In the counter, you have to have language that explains and contractually says if you receive multiple counteroffers back, you reserve the right to pick one of those offers. Finally, you can pull a Pat Benatar and tell the buyers, “Hit me with your best shot.” In this scenario, ask each agent to have their buyers bring in their highest, best, and final offer. From there, you choose which offer you want to go with. Asking for their highest and best can get you a price above and beyond what you expected. However, some buyers may respond emotionally. They won’t want to get in a bidding war, and they may pull their offer off the table. Choose which option is best for you to get your home sold for top dollar. As your real estate agent, I can guide you through this process. If you have any other questions about multiple offers or selling your home, just give me a call or send me an email. I would be happy to help you!

Let’s talk about vacation rentals. Here in Kauai, they’re known as TVRs, or transient vacation rentals. One of the first things you need to know is that the island of Kauai has specific rules and regulations regarding TVRs. In order to do a short-term rental, which by Hawaii law is anything shorter than six months, you must have a TVR licence. Usually, TVR properties are located within the VDA, or the visitor destination area. There are also a number of properties outside of the VDA with non-conforming use licenses. These properties were previously vacation rentals before the rules changed in 2009. So if you’re going to purchase a vacation rental, these are the two kinds of properties you’ll want to look at. But once you own one of these properties, how do you manage it? Fairly big resorts will generally use on-site management companies. These companies will do a great job, but will take a large percent of your revenue. If you’re interested in convenience, this can be a great option. It isn’t your best option for maximizing cash flow, though.​ You could also use a smaller boutique management company. These companies are generally specific to their geographic area on the island. These companies tend to charge about 25% of revenue. Another popular option is to self-manage by using a service like Airbnb and vacation rental by owner with www.VRBO.com. The fourth option is something called a blended model. With this, you start out using a small company as you learn more about management, then begin to book the unit yourself using self-management sites. The goal of this option is ultimately to transition into fully self-managing. I have a number of clients who get between 10% and 12% return on investment by managing their properties themselves. After all, the ultimate result of this is cash flow. People often call me looking for an income source that will “pencil out.” By “pencil out,” they mean that it will pay for itself. “When you have a vacation rental in the island, you have a business.” Whether or not your property will pencil out depends on a few factors. How often are you going to use the unit yourself? Are you buying it primarily as an investment or are you going to be occupying it frequently yourself? Also, how often is your unit going to be booked when you aren’t using it? When you have a vacation rental on the island, you have a business. Like any other business, it will be more successful the more attention you give it. Make sure your clients are happy so that you can garner positive reviews on websites like Yelp! and Zillow. Another thing to consider is how you will pay for the unit. By calculating your mortgage and monthly maintenance fees for the property along with insurance and taxes, you can determine what your cash flow will look like. For your convenience, I’ve got a buy-and-hold spreadsheet you can use to calculate your return on investment.If you’re interested, let me know and I can send it over to you. If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

I’m sure you know by now that 90% to 95% of homebuyers begin their home search online. That is why professional photography is so important, especially in an island market like ours. Kauai is a vacation destination and many buyers are not here, so photography is even more important. When preparing your home for the market, make sure that you use professional, high-definition photography. Have you ever taken a photo on your cellphone outdoors only to have the sun wash the photo out? With professional photography, you totally eliminate that issue. We use HDR (high-definition realty) photography by taking three different exposures: underexposed, normally exposed, and overexposed. We then composite the exposures together so that the pictures look absolutely beautiful. This is the optimal way to showcase your property. “Drone photos will highlight your property and the surrounding area.” Some properties may also benefit from the use of a 3-D Matterport camera. This camera creates a virtual model of your home so that online buyers can tour your property from the comfort of their own home. This way, potential buyers can get a good feel for what the property is like in real life. Of course, here on gorgeous, tropical Kauai, drone photos are an essential part of highlighting your property. Drone photos allow the buyer to see the neighborhood, how private the location is, and its proximity to the ocean. Drone photography can also showcase views from the home and how the property is situated near the mountains. When you sell a property, make sure you work with an experienced agent who will use state of the art photography to highlight your home in the very best manner. Buyers definitely appreciate stunning photography and beautiful drone footage, so make sure you put your best foot forward in your listing photos so that buyers will see what a valuable asset you are offering. If you have any other questions about professional photography or selling your home, just give me a call or send me an email. I would be happy to help you!

Buyers and sellers alike want to know the true value of their home. Sellers want to be able to get the highest price possible and buyers don’t want to overpay. Having an accurate market valuation is important. Many people turn to Zillow and their Zestimate, which is a computer algorithm that does a statistical comparison with similar properties. However, there are a lot of ways in which this automated estimation can be inaccurate.Zillow properties tend to be off anywhere from 5% to 15% of the home’s true value. Zillow isn’t able to determine the property’s location, which can have a huge positive or negative impact depending on what the location is. They don’t take any upgrades into account either. “Don’t put your faith in Zillow or the county assessor.” Assessed values are pretty similar. While some states reassess home values based upon the sale of a home, Kauai’s assessed values are based on the county’s formula alone. They reserve the right to be off by 20% in either direction. If buyers just look at assessed values, it could cause them to draw unfair conclusions about a home. Especially in the luxury home market, where we’ve seen a home that was assessed at $4.8 million sell for $16 million. The county assessor is about as limited with their valuation as Zillow is. The best way to find what the true value of your property is by calling professionals like us. We understand the market, so we understand home values. We will be able to get you a much more accurate valuation than you’ll ever get online. If you have any questions for us or want to know what your home is really worth, give us a call or send us an email. We look forward to hearing from you soon.

We’re a little over halfway through 2017 and our real estate market in Kauai continues to be strong. We’ve recovered significantly from the market crash and for the last five years we’ve had appreciation of about 10% per year in the condo market and 6.5% per year in the single-family home market. Economists are saying that over the next few years, we can expect appreciation to drop a bit to 4% or 5%. I want to take a few minutes to explain a little bit more about our market in greater detail. There are some underlying dynamics in our market that are creating these conditions. First, let’s talk about demand. Anything under $600,000 is in heavy demand from buyers. We have first-time buyers, folks in the mainland looking to retire, investment buyers, and more. We simply don’t have enough inventory for these people. This is creating a situation where prices are continuing to rise at a rapid rate. If you’re looking to buy a home, you’ll need to be prepared to act quickly. There are a little less than 800 total properties on the market right now. If you’re looking in the luxury market between $1 million and $3 million, you have a few more options and can expect a 4% to 6% discount on the list price. I’ve got some historical data to share with you, courtesy of Paul Brubaker. Paul was the Chief Economist for the Bank of Hawaii for 12 years and has been tracking market appreciation. He’s provided a few graphs for us that you can see in the video above. Back in 2000, things were much more affordable. When we get to the peak of the bubble in 2006 and 2007, you can see the market correction and subsequent recovery, which brings us to today. “Anything under $600,000 is in heavy demand.” As you know, our island is divided into five different sections: Lihue, Koloa, Waimea, Hanalei, and Kapaa. Today, we want to talk about Kapaa in particular. This is an area where we have the most demand for homes priced under $600,000. Sales have definitely gone up, but the median price has gone down. What’s going on here? The key word here is median. Even though the median price has gone down, it doesn’t mean prices have gone down overall. It just means that the demand for homes in lower price points is far outpacing the demand in the higher ranges. This results in a lower median price, but sale prices are up across the board. I hope this gives you an idea of what’s going on in the market. If you have any questions for us, don’t hesitate to give us a call or send us an email. We look forward to hearing from you.