As homeowners, buyers and Realtors, COVID-19 impacts each of us in ways that are foreign to the normal flow of life. We are facing the greatest uncertainty of our time where we lack a roadmap to forthrightly predict how we all move forward from here. Q1 Kaua'i real estate sales data reflects a strong start to the year, with sales volume up by 17% and residential and condominium sales counts at net positive, but we know that Q2 will be disastrous. With the Governor’s intelligent decision in mid-March to virtually shut down the visitor industry, Hawaii witnessed a sharp 97% drop in visitor arrivals. The proverbial drawbridge is now up, and with volatility in the financial markets prevailing, real estate sales across the Hawaiian Islands will slow to a trickle.
Year over year the first two months of Q1 generate the strongest sales data. During these months local families look for new homes, relocations swell, and visitors enter and exit the market in droves. Now, there is a stranglehold on all businesses big and small, including real estate. Shelter In Place (“SIP”) mandates here, and similar orders prevailing across the country, present sellers with the awkward choice to either remove or refrain from placing properties on the market. The drought in inventory and inability to personally view properties has ground new transactions to a halt. Yet, the COVID-19 predicament aside, we predict that the summer months will present green shoots with an abundance of inventory which has otherwise been delayed from going to market.
Properties that were under contract prior to SIP are still, for the most part, closing smoothly. Lenders, appraisers, surveyors, termite inspectors, escrow and the Bureau of Conveyances are all considered essential workers. The missing element to a robust marketplace is our ability to personally show property to our buyers. However, as they say, “necessity is the mother of inventory” and we’ve found our clients accepting suitable replacements through virtual techniques and video.
While the current SIP order expires on April 30th, we don’t know if that will be the end it. We expect that once we are able to move freely, we will see a spike in inventory that will meet high demand from buyers ready to purchase property on Kaua'i. With interest rates as tempting as ever, and price adjustments downward, these factors alone will play a significant role in housing affordability, something that Kaua'i desperately needs. If you’re an active buyer, now is the time to get ready, and if you're a seller, get ready for lots of eyes on your property.
We are hopeful. Kaua'i is a highly connected community. Coming together is our natural reflex -- it is our super strength. We’ve gone through crisis before, and we know what to do. We’ve got this.