LIHU‘E — Kaua‘i’s annual median single-family home price increased by over 35% in 2021 from the year prior to hit $1.1 million, the highest in the state, according to data from Hawai‘i independent real-estate firm Locations.
With low inventory on affordable homes, the luxury-housing market is driving median home-sale prices. Of the 742 houses sold last year, 54% sold for over $1 million, compared to 2020, when just 36% of homes sold were over $1 million.
Inventory on single-family homes under $850,000 remains low in the start of 2022, with just 14 active listings on Kaua‘i, according to the Multiple Listing Service on Jan. 12. There were even-fewer residential condos in that price range, with just four listings.
Interest rates are rising.
As of Jan. 6, interest rates for 30-year-fixed mortgages were at 3.22%, their highest since May of 2020, according to a survey by Freddie Mac. Higher interest rates typically lead to a decrease in housing prices, but Locations Lead Real Estate Analyst John Jacobson does not expect that to be the case this year.
“The rise of interest rates can shrink the buyer pool somewhat, but there’s still so much demand (in Hawai‘i),” said Jacobson. “There’s a large percentage of buyers that are using assets other than a mortgage to buy, so the change in interest rates affects prices negligibly.”
With low inventory, more buyers have increasingly been offering over asking prices, with the rate reaching an all-time high of 20% in 2021. Before 2018 less than 10% of buyers offered over asking price.
This year could be even more challenging than last for home-buyers.
“I think that it’s going to be as or more competitive a market in 2022,” Jacobson said. “The aspects of demand are stronger than they were. And there’s no great increasing supply.”
Laurel Smith, staff writer and photographer, can be reached at 245-0424 or firstname.lastname@example.org.
Source: The Garden Island