On Top of the Aloha Beat BLOG

Well, after 4 years of bantering back and forth, the Kauai county Council has finally passed their ordinance to put a stop to vacation rentals in single-family residences outside of the visitor destination area. Search as i might, I was unable to google a map to post here on AR, but, suffice it to say that it is primarily Princeville, most of Poi`pu, parts of Lihue and parts of Kapa`a. So for instance, the areas north of Princeville, that would be Wainiha, Hanalei and Haena are all NOT IN THE VDA.

You can read the article about some of the final ammendments that were defeated this past week in THE GARDEN ISLAND. In the short terms, I do not expect the ordinance to have much of an effect on Kauai home prices. Long term though, the passing of this bill will dampen the market for those buyers who only can qualify by adding in the vacation rental income of the property when they are not on island. If this rental income is now deemed illegal for certain areas, then the rental income cannot be considered by a lender if a buyer is getting a mortgage.

It remains to be seen, just how the County of Kauai intends to enforce the ruling and the types of fines that will be levied on violators of this newly passed ordinance, The ordinance becomes official on March 1st once Mayor Baptiste signs it.  The attorney for the Kauai Board of Realtors has determined that this ordinance is violating the rights of property owners and is illegal. It certainly will be interesting to see how this drama plays out.

As with any controversy, there are many perspectives to consider. There are so many who make their living on Kauai from the vacation rental industry. Those folks will be hurt by these decisions. And the proponents of the bill have argued that our communities are being destroyed by all the vacation renters. I am not sure at today's market prices that putting this ordinance in place will have people moving back into these oceanside communities. The simple fact of raised taxes as the land values appreciated is why so many local people chose to rent, so they could keep the land that has been in their families for generations.

I am sure these issues have gone round and round on each of the islands. We'll have to see how this issue continues to play out on the Garden Island of Kauai. on Kauai 

The Garden Island is Kauai's major newspaper. There is a weekly publication called Kauai People, which my good friend is the editor of, and the Kauai Business Report, which are weekly or monthly pubs, but TGI is the main printed news source for the island. The following article appeared in today's business section. Kauai gets lots of visitors because it is the best and most beautiful island ( I am biased of course). Interest rates are down, prices lower, sellers motivated. Is it time for you to buy or sell? Here's the article about tourism:

Kauai gets lots of visitors because it is the best and most beautiful. Interest rates are down, prices lower, sellers motivated. Is it time for you to buy or sell?

Kaua'i led state in ?07 visitor arrivals
by Blake Jones - The Garden Island

Kaua'i bucked the state trend in visitor arrivals for 2007, recording an increase in all four major markets. The Garden Isle was the only island with increased visitor traffic from the U.S. West and East, Canada and Japan compared to 2006.

Total arrivals were up 5.7 percent to 1,271,399 on Kaua`i in 2007 , a result of increased domestic visitors, not international. O`ahu, Maui and Moloka`i saw declines for the year, while Big Island and Lana`i failed to break the 1 percent mark for total arrival increases, according to early data from the state Department of Business, Economic Development and Tourism.

Total expenditures and per-person-per-day spending were a different story, with Kaua`i falling in the middle of the pack with modest increases. Visitor spending was up 4 percent on Kaua`i to $1.3 billion.

The state as a whole in 2007 saw total arrivals fall 1.2 percent to 7.3 million visitors. Expenditures for the year statewide were up less than 1 percent to $12.2 billion.

Sue Kanoho, executive director for the Kaua`i Visitors Bureau, said the growth for Kaua`i as the state flattened out was the most notable information from the state report. She attributed the growth to other businesses that have been marketing their Kaua`i projects and getting the word out about the island, in addition to continued demand for the Kaua`i experience.

However, the upward trend is not likely to continue, she speculated.

"I expect Kaua`i will flatten out in 2008," she said.

While capturing the Japanese market continues to be a challenge for Kaua`i, it grew 3.8 percent over 2006 , making Kaua?i the only island to see an increase in Japanese arrivals. The Canadian market continued to grow in 2007, wrapping up the year with five consecutive months of increases. Kanoho said the exchange rate and availability of flights are major factors for Canada arrivals, both of which turned around for our benefit.? Statewide, arrivals from Canada experienced the strongest growth in 2007, with a 5.3 percent jump over 2006. The only other market to see an increase for the state was U.S. West arrivals, at 0.1 percent.

In 2007, the state?' total visitor days decreased 1.6 percent, though the average length of stay was virtually unchanged at 9.15 days.

While not impressive figures, state Tourism Liaison Marsha Wienert was optimistic.

"Hawai`i's visitor industry remained stable in 2007, especially coming off of two robust years of growth," she said. "We continue to be encouraged by the increase in visitor spending, as well as ongoing growth in the number of visitors from markets such as Canada ... and the strong performance of Hawai`i's cruise industry.?

December 2007 stats

Visitor expenditures for the state in December 2007 rose $37 million or 3.2 percent above December 2006 to $1.2 billion, according to preliminary statistics.

The average daily visitor spending for December grew from $179 per person in 2006 to $183 per person in 2007, a 2.5 percent increase.

Total visitor arrivals decreased 2.7 percent to 649,159 visitors in December 2007. However, visitors stayed longer; 10.07 days in December 2007 compared to 9.68 days the year before.

Among the top four visitor markets, only arrivals from Canada increased (19.6 percent), while the U.S. West, U.S. East and Japanese arrivals decreased by 5.2 percent, 7 percent and 3.8 percent, respectively, when compared to the year prior.

Total arrivals from all other geographic areas increased 7.6 percent.

This type of data is significant boost to the Kauai Real estate market, especially for those wishing to vacation rent their properties when they are off island. More on that in my next post.

There's a pretty comprehensive article about our island of Kauai, its heritage, its challenges, and its future. For those of you who have an interest in our wonderful paradise called Kauai, check out this article in USA today. 

I think the article is factual, covers many of the issues, and says it like it is. Let me know what you think. This was first email i read this evening after a day of showing luxury homes that ranged from 3.8 million to 9.5 million. It's true, I am not selling these homes to Hawaiians. This is a second home for an individual whose first home is in, can you guess, California

* What is the supply of unsold homes in a particular Kauai neighborhood?
* How fast are Kauai homes selling right now?
* How do actual selling prices compare to listing prices in the kauai real estate market?
* How do I get more for the money in a changing market?

Our unique Market Snapshot Provides you up-to-the minute MLS graphical reports - automatically delivered and updated. And you can have them delivered to your email as frequently or infrequently as you wish. Give it a try and let us know what you think. Kauai Real Estate is a special place to park your investment dollars. It's one of the most beautiful places on the planet. And, its in America!

Coco Palms to become a park?

Coco Palms, the famous Kauai resort which put Kauai on the map, lay dormant for thirteen years after being demolished in Hurrican I`niki. The Coco Palms Resort was once "the" resort to stay in on Kauai. In its heyday it was filled to capacity with honeymooners, repeat visitors and numerous celebrities.

In the summer of 2005, developers, Coco Palms Ventures LLC and the county announced that Coco Palms would be developed into a mixed-use facility that was to feature 200 kauai condominium units, 104 hotel rooms and a spa on the lush 45 acre campus in Wailua. A sales office was built in the Coconut Marketplace and sales and marketing commenced in 2006. Then in Sept. of last year, the developers pulled the plug on the project and placed Coco Palms on the market. According to the developer, the price is negotiable; the company paid $12.3 million for the resort in January 2006. The total project is 32 acres, some of which is land leased from the state that cannot be developed.

In the meantime, community sentiment has been building for the county to turn the former resort site into an eastside park. This week, Senator Gary Hooser, introduced a bill in the Senate requesting an appropriation of $10 million in matching funds to buy Coco Palms Resort. The legislation calls for acquisition of the resort and converting the campus into a public historical park and cultural education center to preserve and benefit native Hawaiian culture.