A buyer’s market

Everyone is saying its a buyers market… good for buyers, not so good for sellers accustomed to selling quickly at asking or close to asking prices. Just what is a buyers market and when does a market become a buyers market? A quick search on Google reveals the following definitions:

“A market condition which occurs in real estate where more homes are for sale than there are interested buyers.”

“Market conditions that favor buyers ie there are more sellers than buyers in the market. As a result buyers have ample choice of properties and may negotiate lower prices.”

“A period existing in the real estate market, whereas the number of available homes exceeds the number of buyers actively searching for a home. Such a condition could potentially favor the buyer because home sellers must remain flexible in their pricing and contract requirements in order to compete with the large volume of other home sellers.”

A buyer’s market is calculated based on past sales versus the number of properties currently on the market. For example, in Princeville as of 4 14-07, there are 142 condos on the market (not counting the 50 fractionals shares.) As for sales, since 10/1/06 there were 56 sales, only 27 of which were resales. The other 29 sales were in the new Kai’ulani and Nihilani condo complexes. Since most of the new sales were pre-sales that were initiated about 2 years ago, a clearer picture is provided by using on the true re-sales number for determing the market activity. With 29 sales over a 6 month period, that averages out to 4.8 or rounded up to 5 sales a month. At 5 sales a month, we have enough inventory for 28 months. Even if the new sales are included, with 56 sales for an average of 9.3 or 10 sales a month. Even at this “inflated” perspective, inventory exists for well over a year! Generally speaking, if the inventory is enough to supply demand for over 6 months, it is considered a buyer’s market.

Aloha Elaine

A rainy morning in Paradise with calm seas

Aloha and Happy Belated Easter! Today finds light winds, overcast skies and occasional rain. I can hear the ocean crashing gently onto the shoreline although it looks relatively calm from my window. During the winter months, we often get North Shore swells which can result in monster waves and fabulous whitewater views for me. Typically, I cannot see the whitewater as the waves come to shore, but during the winter swells I am often treated to awesome whitewater views. To see the waves “marching in,” with the winds blowing spray back from the tops of the waves against a clear blue sky is a sight to behold. They even have permanent chairs out on the bluff here inviting you to just sit and enjoy.

For those of you unfamiliar with the term “Swell”, Wikipedia offers a straightforward and clear definition:

“A swell, in the context of an ocean, is a formation of long wavelength ocean surface waves on the sea. Swells are far more stable in their directions and frequency than normal oceanic waves since they are formed by tropical storms and by stable wind systems.

From a surfing perspective, swells are often created by storms thousands of miles/kilometers away from the beach where they are surfed. This distance allows the waves comprising the swells to become more stable, clean, and free of chop as they travel toward the coast. Waves generated by storm winds having the same speed will group together and travel with each other, while others traveling at even a fraction of a second slower will lag behind, ultimately arriving many minutes later due to the distance traveled. This is a well known fact for surfers, swell waves come in sets. So Catching the first wave may allow you time to also catch a wave at the end of the set.”
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I am not a surfer but definitely enjoy the majestic waves and whale watching available throughout the winter. If you are Princeville condo owner, as I am here at the Cliffs, you need only sit on your lanai to enjoy these views or walk to any of the view points throughout Princeville if your complex is not near the ocean. Here, in Princeville, ocean view is for everyone. One great aspect of the Princeville Resort is that it was laid out comprehensively with thought given to maintaining views throughout the resort for everyone to enjoy. You can also take a short walk or drive to the Princeville Resort Hotel and stand out on their bluff for incredible views of Hanalei Bay and Bali Hai. When I powerwalk in the morning, the Ocean, Mountains, Waterfalls, Hanalei Bay, and Bali Hai are all part of my scenery. Even if you have never wanted to exercise a day in your life before, you just may may find yourself overcome with the desire to get out and walk just to take in the natural beauty which surrounds you once you are here.

So how can you have a piece of this paradise? Condo ownership is one easy way for many people as it eliminates the issues of lawn care, exterior maintanence and the like. Plus, if you decide to vacation or long term rent your property, your Management company will ensure it is cleaned after each guest departs or after your long term tenant vacates, leaving you with little or no worries.

Another option which is gaining popularity is fractional ownership. This type of ownership started with those who bought vachts and jets only to discover their usage did not justfy the expense. They then started making these purchases with other “investors” or like minded individuals who also only needed a yacht or jet parttime. THis concept has now trickeled down to the second or vacation home market. Statistically, second homes are used approximately 20% of the time or 2 months. In addition, property owners were tired of coming in after not using their property for a period of time and then having to spend part of their vacation cleaning, upgrading, etc.

With fractional ownership, which is typically a set two month period, everything is set and ready to go upon your arrival. You, and 5 other “owners” pay a small managment fee to someone to make sure your property is kept in like new condition, plus, with occupancy year round, your home away from home is not left sitting collecting mildew. Fractional ownership is not for everyone, however, as it pretty much eliminates the personal touch that many homeowners enjoy. That is, you cannot come in and hang “your pictures” or paint the walls colors that you love since it is a shared property. There is something for everyone here on Kauai especially in Princeville where we have over 20 different condo complexes to choose from along with many beautiful homes. To get you caught up on the Princeville condo market, here is what happenned over the last 7 days:
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Copyright 4/11/2007 by Hawaii Information Service

NEW LISTINGS

MLS # Tp St DOM Taxkey Tnr Price Location Land area Details
193722 T A 2 4-5-4-12-2-35 FS $559,000 Hale Moi #215
194107 T A 4 4-5-4-5-30-10 FS $649,000 Princeville Mauna Kai #F20
193699 T A 5 4-5-4-5-23-62 FS $667,900 Plantation At Princeville #1612
193433 T A 7 4-5-4-12-9-15 FS $899,000 Pali Ke Kua Iii #136
193915 T A 7 4-5-4-6-1-56 FS $955,000 Villas Of Kamalii #56

BACK ON THE MARKET

MLS # Tp St DOM Taxkey Tnr Price Location Land area Details
175762 SH A 388 4-5-4-12-9-24 FS $199,000 Pali Ke Kua Iii #234 1,135 #234
175759 SH A 388 4-5-4-12-9-24 FS $199,000 Pali Ke Kua Iii #234 1,135 #234
175755 SH A 388 4-5-4-12-9-24 FS $199,000 Pali Ke Kua Iii #234 1,135 #234
175765 SH A 388 4-5-4-12-9-24 FS $225,000 Pali Ke Kua Iii #234 1,135 #234
175763 SH A 388 4-5-4-12-9-24 FS $225,000 Pali Ke Kua Iii #234 1,135 #234
175756 SH A 388 4-5-4-12-9-24 FS $225,000 Pali Ke Kua Iii #234 1,135 #234

***** Before you get all excited thinking these units are only $225K, please note that these are “shared” or “fractional” units coming back onto the market….in other words, you are buying two months at these units…..

PRICE CHANGES

MLS # Tp St DOM Taxkey Tnr Price Location Land area Details
184077 T A 190 4-5-3-11-1-36 FS $965,000- Villas On The Prince #36
194086 SH A 248 4-5-4-11-3-51 FS $325,000- Hanalei Bay Resort #J13
190750 T A 70 4-5-4-5-24-62 FS $650,000- Nihilani At Princeville Resort #21B
178779 T A 302 4-5-4-5-39-120 FS $675,000- Cliffs At Princeville #5106
177183 T A 342 4-5-4-5-13-13 FS $693,500- Kamahana #13
188655 T A 112 4-5-4-6-1-2 FS $999,000- Villas Of Kamalii #2

This information has been supplied by third parties and has not been independently verified by Hawaii Information Service and is, therefore, not guaranteed.
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There were no sales or condos that went into escrow during this seven day period. Please let me know if you have any questions about any of the condos or concepts discussed in todays blog. I am here to answer your questions and welcome comments. Still overcast but the rain stopped. Wait another half hour and you may find yourself headed to the beach with the sun blazing above. Like they say here, if you don’t like the weather, just wait a minute.

Aloha for now,

Elaine

Aloha!

Aloha and welcome to my new blog, part of the Aloha Living Blog Network. Mahalo for visiting, and stay tuned, as I look forward to sharing with you both a professional and personal perspective on real estate in this area.