The November 2011 month end Kauai real estate sales data resembles more of what we’ve seen since the notion of settling became widely embraced. In other words, virtually everyone has now  bought into a slow paced recovery where the strategy is “protect your downside”. Of the Buyers who are closing on Kauai real estate purchases in 2011, the data shows great resistance to being the leader of the pack. That is… unless you are acquiring world class real estate here, where the prices are jumping as the elite properties see more showings and interest.
 
The month end November island wide sales shows 2011 tracking 10% above 2010. While the individual sales figures are less dramatic, seeing a gradual increase in volumes is very positive and shows that the market is active with Buyers. More importantly, if 2012 follows the same trend, then others will buy into Kauai Heritage Properties LLC’s assertion that the Kauai real estate market hit bottom last year.
 
December has already delivered a wave of real estate activity with the island wide escrow count favoring residential selections. Thus far there are 92 residential escrows, 19 land escrows, and 69 condominium escrows. Purportedly the high point is a $20+ million dollar escrow on the northshore.

We have a special surprise announcement heading into the New Year. Beginning in 2012, Kauai Heritage Properties LLC will partner up with Kauai Design & Architecture to offer regular design posts. Each post will feature elements that are unique to living in the Hawaiian Islands from architecture, landscape architecture, to interior design and entertaining. The best of the best will be shared by Hannah Sirois, Peter Sirois, Frances Simons and Ginny Latham with each of us diving into our many years of rolodex entries!

If there are particular areas of interest, please comment here and know that your request will be taken seriously.

We recently completed the arduous task of complying with the requirements to be considered as a Tier 1 bidder for one of the 17 cabins available for lease within Kokee. Suffice it to say that these requirements were probably equal to the requirements needed to be considered for any federal law enforcement organization.

December 4, 2011 was the first day that the interior of the cabins could be inspected. Thus, with print outs in hand, preliminary analysis complete, and map at the ready, we took off and went hunting. The day could not have been prettier, and in Kokee, where the colors are particularly brilliant and can then become instantly misty and subdued, the day unveiled all seasons.

We’d previously read through the 127 page bid packet and were aware that the lease rent as well as all taxes, maintenance, insurances, utilities, and maintenance would be our responsibility. Yet, for the opportunity to care for a historic cabin and spend time within the park as a long term lessee, these are small factors to consider.
Coming from a real estate background where one seeks to maintain/drive values, we were amazed that the State chose to avoid marking the homes, offering signage, providing maps to interested bidders, cleaning out the mess left in many cabins, and generally electing to make it “easy” on the potential bidder. Even tagging the cabins with orange tape would have sufficed. Instead we found ourselves repeatedly criss-crossing roads, hoping that we were at the right cabin, calculating the cost to cure the clean up, repairs, dump runs, and possible hurdles to shore up historic structures in disrepair. It seems as though the Department of Land & Natural Resources and all of its good intentions directed its efforts toward defining the “process” of securing a cabin but forgot the potential bidder’s experience in that equation.

We hope that the eventual bid winners are thrilled, but in the end, we hope that Kokee is the biggest winner of all. The place is a treasure to be preserved for many, many generations to come.

Over the last three years Buyers and Sellers want to understand the direction of the market. Downtrend? Uptrend? Flat lining? We ended last year with the following paragraph:

“With the clean up well underway, 2010 shall pave the way for a noteworthy uptick in 2011 buying activity. Contrary to 2010, 2011 will provide for more sales above $800,000 with Buyers still remaining conservative and keeping a watchful eye on zoning (i.e. offsetting expenses with vacation rental revenue), expenses (i.e. the presence of dues, utility costs, real property taxes), and a commitment to never pay retail. Loans above $625,500 bump into the jumbo category, and although we will see cash transactions, Hawai‘i’s regional banks will continue to be the lenders of choice. The only exception in this regard will be on condo-tel loans (condominium properties with front desk operations) where the lending pool shall remain small and discretionary. As construction completes, and dust screens come down, the beauty of the environment moves back to center stage, tempting Buyers to consider purchasing a slice of heaven on one of the most beautiful places on earth.”

Moving into 2011, despite the ever present negative news across the airwaves, our little micro climate here has made great strides. Just as the paragraph above forecasted, from high end sales to conveyances of developer lands, the smart money continues to grab the low hanging fruit. Banks are coming around, and sure enough, it’s the Hawai‘i banks who are the stars here with their local knowledge. The local banks are even swinging toward funding loans on commercial and jumbo loans, plus leasehold condominiums, all true non-starters in 2009 and 2010.

A solid finish to 2011, and more importantly, a good start to 2012 will rely upon a steady visitor environment. We’ve written about the emergence of the Canadian investor as real. Although the Chinese vacationers have more than doubled their numbers into the state, the Chinese buying of Hawai‘i assets is at the premier commercial level and has not truly filtered into single family purchases on the outer islands. Although foreign buying is on the upswing, Buyers are moreover domestic and continue to predominantly reside in west coast and now midwest locales.

Buyers find that their lives are demanding; they seek a balance to these constraints by increasingly deferring to living with ease. Gone are the requests for oversized and too many rooms and vast square footage dedicated to hallways. Replacing excess is a need for style and comfort in a pared down home. The net effect is a lasting look.  Hawaii’s best architecture provides a lasting look that never tips the balance between form and function. We asked local architect, Ginny Latham, of Kauai Design & Architecture www.kdanda.com to design our home. Her art and appreciation for designing around living in the tropics makes coming home the highlight of our day!

In closing, for those of you who want to have a basis for understanding the architecture of the islands, we strongly encourage all to go on  The AIA Honolulu Chapter’s Architectural Walking Tour of Downtown Honolulu. http://www.aiahonolulu.org/displaycommon.cfm?an=1&subarticlenbr=29 We took this tour years ago (the first time with our architect, Ginny) and enjoyed it so much that we took it again. A dear family friend, Frank Haines, the former President of Architects Hawaii, took us on both tours. Frank’s near 60 year architectural career and writings are a gift to this state and his eloquence and knowledge is impressive. Consider requesting 90 year old Frank Haines as your guide….you’ll never forget it!!

Hot Topic

On October 5, 2011 the Kaua‘i County Council unanimously passed legislation to remain consistent, over time, with the 2008 Charter Amendment’s acceptable rate-of-growth standards.

Specifically, back in 2008, Kaua‘i County voters approved, by a near 70% margin, a charter amendment to keep Transient Accommodation (i.e. vacation rental units) growth restricted to an annual increase of 1.5% percent per annum of the then existing (i.e. December 2008) transient vacation inventory or consistent
with the acceptable growth standards in any future General Plan. According to the Planning Department, the number of properly accounted for and approved TAU is 9,200, and in addition to the existing TAU, an additional potential 4,650 TAU exist (i.e. land typically within the Visitor Destination Areas where the zoning allows for a TAU). Under Bill 2410 the 4,650 will be “exempted units”, and the final bill has different scenarios for allowing these units to proceed. If many act upon their permits in a short period, the allocation of TAU certificates could drop. Conversely, if the exempted units decide to refrain from pulling a TAU permit, the TAU allocation could increase, but not over the 1.5 percent cap.

Both the County, developers, constituents, and authors of the 2008 Charter Amendment are satisfied with the outcome. It is now up to the Planning Department to properly manage.

Remember These Important Dates

We received more calls this year regarding property owners’ disagreements with their real property assessed valuations. Recall that properties here are assessed annually and it is your responsibility to stay close to the true valuation of your property as of the last day of the calendar year. If you are entitled to an exemption, file for it by December 31st!!
    
The tax year begins on July 1 and extends until the following June 30.

Dec. 31  Deadline for filing exemption claims and recordation of ownership documents
Jan. 1  Assessment set for use during next tax year
March 1  Assessment notices mailed
April 9  Deadline for assessment appeals
May 1  Certified assessment roll to County Council
June 20  Tax Rate set by County Council
July 1  Tax Year Commences
july 20  First half year tax bills mailed
Aug. 20  First half tax payments due
Dec. 31  Deadline for applying for additional home exemption based on income and for filing dedication petitions
Jan. 20  Second half year tax bills mailed

Courtesy kauai.gov

The true sense of island design that reaches back into Hawaii’s legendary and relaxed style is anchored in deep lanai space. A spacious lanai typically offers a gracious overhang that protects the home from the elements. The outdoor room functions as the preferred location to dine and has recently extended beyond a place to dine and visit into a place to live. Designers throughout Hawaii and across the globe are increasingly rethinking home requirements that were previously programmed into indoor spaces and pushing them outdoors. The dining room, living room, outdoor kitchen, bar and more are finding their way outside. Where better to live this way all year than in Hawaii?

Hannah Sirois, Principal Broker of Kauai Heritage Properties LLC recently placed into escrow 1211 Milia Street, Kalaheo, HI, 96741. Asking $765,000, the two story residence immediately went under contract after receiving multiple offers. Comparatively speaking, neighboring properties have not sold and exhibit extended days on market.  While Puuwai Design & Construction displayed its customary attention to superior design, they consciously sought to blur the lines between indoors and out. An impressive NanaWall system achieved the desired result. Now, the new owners will comfortably dine, live, and probably office off of the lanai with the tradewinds at their back and the blue Pacific in the foreground. Buyers of Kauai real estate are increasingly demanding the option of extending their living to what has traditionally been an outdoor area. We now call it the  living lanai!

You'll wait a long time to find a property this inviting - Listed For: $1,950,000

Located at 2880 Milo Hae Loop at Kiahuna Homesites in Poipu Beach, the fairway residence delivers dynamic views over the pool, golf course, ocean, coastline and mountains.

The quality environment shares the best of Hawaiian living where blending the indoors with the exterior surroundings comes easily. Large windows and doors create a seamless experience, and the vistas are enjoyed from dawn through dusk.

With an attractive single level floor plan, inclusive of 3 bedroom suites and 3 baths, a separate study, dining room, living room, and media room, elaborate kitchen, and finishing touches that create elegance within. The exterior’s attractive roofline and elevations combine with immaculate landscaping and a poolscape that offers an ideal entertainment zone.

Features are Innumerable and Include the Following: • Fairway and Ocean Views • Expansive Windows and Doors throughout • Spacious Pool and Professional Landscaping • High End Appliances, Cabinetry, and Counter Tops • Custom Maple Flooring in Living and Sleeping Areas • Stone and Granite Complement Each Bathroom • Built-in Bose Sound System • Spacious Garage and Ample Storage.

Call Hannah Sirois (PB) Kauai Heritage Properties for a showing at: 808.742.1191 

As the Kauai County Council, Planning Department, and Kauai's constituents passionately engage over Bill 2386, which seeks to define the proper implementation of the 2008 county charter amendment, it requires a brief description on the passion behind both sides of the issue.

Section 3.19 of the County Charter is captured below, and if you want to start there, it may be worthwhile. It’s always been clear that Kauai does not want to be a leader in growth. In fact, one of the more popular bumpers stickers here reads, If you like Kauai, send your friends to Maui. In order to contain growth, and specifically the growth of transient accommodation units (TAU), in 2008 an amendment to the county charter was passed by an overwhelming majority of voters.

At the end of last year, the council proposed Bill 2386 which transfers the responsibility to act upon Section 3.19 back to the planning department. The bill is in a re-draft status and currently floats between the council, public hearings, and the planning department.

In this economic downturn the County of Kaua‘i has not received innumerable requests for new Transient Accommodation Use. Keep in mind, that in order for a property to be approved in the first place, it must be located within the Visitor Destination Area (VDA). The concern from the voters are the many properties that currently consist of vacant land, fall within the Visitor Destination Area (VDA), are likely to become improved properties in the future, and may seek TAU status. These properties particularly fall within developments, and therein lies the quandary. There are those who believe that the amendment must be followed - period, and there are others who believe that developers, who already paid their dues to the county, deserve a break and should have their properties pre-approved for TAU status.

According to Walter Lewis, a well respected northshore resident and advocate for transparent government, “Much of the responsibility of the un-built backlog falls to the Planning Commission which failed to conform to General Plan standards, failed to require orderly timetables for use of authority conferred and failed to establish a time for commencement of construction." Lewis believes that the Developers are, however, partially responsible for sitting back and failing participate in the process over the last few years. 

On the southshore, the developer's concern is highly visible, for within developments such as Kukui'ula and Poipu Beach Estates, where all properties fall within the Visitor Destination Area, and where the Developers complied with many County conditions of entitlement, the stakes are high. Rather than mothball thier projects, these Developers completed them, opting to refrain from leaving dustscreens as relics and symbols for what could have been. Needless to say, thier attorneys are working overtime and believe that their rights were vested ages ago.

Kauai never seems to understand that the START defines the FINISH. Read Section 3.19 below and get involved...regardless of where you stand on the issue.

"SECTION 3.19 Kauai County Charter Implementation of the General Plan

A. The power to process and to issue any zoning, use, subdivision, or variance permit for more than one transient accommodation unit shall be vested in and exercisable exclusively by the council. As used in this Section, “transient accommodation unit” shall mean an accommodation unit or a portion thereof in a hotel, timeshare facility, resort condominium, fractional ownership facility, vacation rental unit or other similarly-used dwelling that is rented or used by one or more persons for whom such accommodation unit is not the person’s primary residence under the Internal Revenue Code.

B. Any applicant seeking the issuance of a zoning, use, subdivision or variance permit for more than one accommodation unit shall certify to the planning department whether any use of the units as a transient accommodation unit is projected by the applicant. Prior to granting any such permit for a transient accommodation unit, the council shall conduct a public hearing and make a finding that granting such permit would be consistent with the planning growth range of the general plan and in the best interest of the county and its people. Approval of any such application shall require a favorable vote of two thirds (2/3) of the entire membership of the council. Appeals of any decision by the council relating to such permits must be instituted in the circuit court within thirty (30) days after entrance of the final decision of the council.

C. The council may by ordinance authorize the planning commission to process and issue such permits, or certain of them, on terms and conditions as the council may deem advisable, only upon the council’s enactment of a rate of growth ordinance that limits the rate of increase in the number of transient accommodation units in the county to no greater than one-and-one¬half percent (1.5%) per annum on a multi-year average basis, or such growth rate that is within the planning growth range of afuture general plan adopted pursuant to Section 14.08.

D. The council shall adopt such ordinances, laws, rules and regulations as are necessary to carry out the terms and intent of this amendment to the Charter.

E. If any provision of this amendment shall be held by a final order of a court of competent jurisdiction to be invalid, all of the other terms of the amendment shall remain in full force and effect. (Amended 2008)

As Kauai real estate agents, we often rely on both architectural and aerial photography.  A high quality aerial photographer is indeed far more challenging to locate, and we are fortunate to have the best in our own back yard. While showing property to Brad and Pamela Dawber in the 1990’s, we were introduced to their artistry and passion for sharing Kauai’s best views from the air. You may take in their art online, at their gallery, Nani Kauai Gallery in Princeville, and at Kauai Heritage Properties’ office at 3417 Poipu Road, Suite 111, Koloa, HI 96756 where their imagery fills our work spaces with beautiful views. The following is a snapshot of their story.
 
We moved to Kauai full time in 2001 , we had bought 2 condos at Kiahuna through Hannah in the 90's and fell in love with Kauai. After 28 years of living in a ski resort, we were tired of the snow and cold. We were traveling the world going to tropical locations so I could surf and Kauai again lured us in.
 
I have been a professional photographer for 38 years and opened my own gallery in 1985.  I started by working as a photographer at Surfing Magazine in the early 70's. I then worked for Powder Magazine in the 70's and into the 80's. We have owned galleries non -stop since then. We were looking for a major lifestyle change and a new area to photograph. Part of my job description is that I have to live somewhere beautiful! In our Mammoth galleries we carried 10 world class photographers, the talent was surreal. I felt that Kauai was not saturated with landscape and aerial photographers so it seemed like a great opportunity to use the formula we used in Mammoth.
 
Kauai has everchanging light and shadow, it seems weather wise that each day is like 5 different days. You wake up to pouring rain, then a rainbow, then hot and sunny, cloudy, windy, rainy. All of those features makes it truly unpredictable and offers lots of photo opportunities. My passion and my niche has become aerial photography.
 
I had been shooting the Sierras from the air for many years and that aspect continues to enthrall me. I was a heli-ski guide for many years and skiied and photographed phenomenal terrain. Kauai is so unique because of lot of the terrain is unaccessible except by helicopter. Shooting from the air is extremely challenging, mostly because the weather dictates when to go out. I literally wait months for a great day . For what I pay for my charters I cannot afford to go out on mediocre days. My clients want to see the properties or scenes on prime days. Then of course the Napali coast is like stepping into another world and I will never stop trying to come up with a unique angle or lighting situation. I truly love my job and it is so rewarding to capture the beauty of Kauai that brings such joy to myself and my clients.
 
 I show my work in our Nani Kauai Gallery in Princeville. We also have websites, www.braddawber.com and www.nanikauai.com & of course Facebook, www.facebook.com/nanikauai. I also have a selection of images on display in Kauai Heritage Properties in Koloa www.KauaiHeritageProperties.com
 
 My favorite areas to shoot are Napali and the north shore. This one of Napali, titled "Magical Napali " is one of my favorites as it really shows how wild and spectacular the light can be. This shot was looking towards Honopu and Kalalau. I shot about 300 images this day and this one had such of great mix of light and shadow , cliffs, ocean. I am a lucky guy to see this kind of thing!

So called experts have talked about the recovery, trying to convince the buying public that solid opportunities were out there for quite some time. Buyers simply waited for Sellers to capitulate and finally agree that the time to buy is now. The improvement in the bulk numbers referenced above are significant and represent that Buyers and Sellers are beginning to agree on valuations. Yet, for those who prefer to drop down a layer into the real signs of a recovery we encourage a keen view of the condominium market. For, condo sales are the single best barometer to measure the health of this second home market where a healthy tourism market represents the backbone of a stable economy.  Condominiums are the most challenged class bearing the brunt of adjustments in lender guidelines and consequently a diminished lender pool with stiffer interest rates. If the trend up in sales continues through the first quarter of the year consider the dimmer switch to be working just fine.

To demonstrate our uptick in optimism,  Kauai Heritage Properties kicked off 2011 by representing the Sellers of Kauai’s strongest year to date condominium sales. Both condominium sales occurred at Whalers Cove, which many consider to be Poipu’s luxe oceanfront condominium address. The Penthouse, Unit 138, closed escrow in February for $1.4 million and Unit 134 closed escrow for $1.1 million.  

        Five Year Condominium Sales History

               Year       # Sales             Volume

·       2006    698 sales          $353m

·       2007    295 sales          $208m

·       2008    169 sales          $108m

·       2009    161 sales          $64m

·       2010    239 sales          $73m