Kauai Absorption Rates Show A More Balanced Market

Kauai absorption rates continue to move toward a more balanced market. The Lihue area leads the way with a supply of homes and condo well below 12 months. The South Shore, once a very troubled area, has also seen a dramatic recovery and now has the least supply of all of Kauai's resort areas (Princeville, Kapaa, Poipu).

The horizontal color bands in the chart indicate market health from a seller's perspective (red is ugly). Foir more information, see the color code definitions to the right of the chart.

Kauai real estate sales for 2011 presents a mixed picture that is heavily dependent on the the island region. Overall, 2011 prices were down from 2010 but the big exception was Kauai's South Shore, a major tourist destination area.

On the South Shore, large increases in sales price were seen in all 3 property types, residential, vacant land, and condominiums. This suggests a return of resort property buyers who had been absent since the market downturn began in 2006. At its worst, South Shore condo absorption rates were a whopping 10 years! Now it's a much more reasonable 18 months.

The flip side of the South Shore is the Lihue condo market, down a whopping 55%! This figure would be very misleading if one were to assume is was uniformly distributed across all condo projects. In fact, the huge driver has been Kauai Beach Resort lodging units which has been selling at prices as low as 10 cents on the dollar of initial purchase price. These units represented over half of all condo sales in the Lihue market in 2011. Additional information on Kauai Beach Resort is available from the author or by visiting www.KauaiRocks.com/kbr.

2011 Kauai sales data is summarized below.

Aloha & best wishes for 2012!

Our Kauai real estate absorption rate continues to move toward a balanced market although we're not there yet except for the Lihue condo market. There has been a huge improvement compared to a little over 2 years ago (see 2nd chart). Of course that is from a seller's perspective; for buyers it's time to act while there is still a significant tilt toward a buyer's market.

Back in 2009 practically the entire chart was red (awful for sellers but wonderful for buyers)

Aloha & best wishes!

Kauai Beach Resort between Lihue & Kapaa on the island of Kauai

View a video of Kauai Beach Resort grounds and a sample room

Kauai Beach Resort (KBR) is located North of Lihue in an area with little development other than KBR itself and the adjacent Kauai Beach Villas. While offering a relatively remote, peaceful location, it is convenient to Lihue and the airport which is only a 10-minute drive away. Kauai Beach Resort sits on 12 lushly landscaped acres featuring lagoons, waterfalls, and Kauai's longest beach. There are 345 guest rooms plus restaurant, meeting space, bar, and tennis courts. For those looking for a tropical vacation experience with the ultimate in on-site amenities, this one is hard to beat.

Units are individually-owned after conversion to condominiums in 2007. The majority of the units are in the hotel pool with on-site management by Aqua Resorts. The former Anekoa management company is no longer associated with this project after foreclosure proceedings were completed in 2009. It was operated under the Hilton flag until becoming an Aqua Resort property in 2009. Prices have tumbled from original sales prices from $1/4 million to $1/2 million and are now selling well below $100,000 as resales. According to RealtyTrac, nearly 50% of these units were bank-owned (REO) at the end of June, 2011.

Aloha!