Kailua: Low Inventory, High Value
BY LISA LEE
On the eastern shores of Oahu, beneath the majestic Ko’olau range lies the quiet, relaxed beach town of Kailua. Conveniently located just 20 minutes or so from Honolulu, Kailua often serves as an escape for both tourists and locals seeking reprieve from the hustle and bustle of city life.
Driving through Kailua, one immediately notices the relaxed atmosphere, with smiling faces, plenty of sunshine, and beach cruisers navigating the paved roads. From wind surfing and body boarding to kayaking, Kailua is great for water sports. The beach parks are usually filled with family barbecues, sports enthusiasts and people just lounging in the sun.
Over the years, Kailua has remained a stable, desirable real estate market. In 2012, as the market forces across Oahu have strengthened and picked up, it is not surprising that Kailua is experiencing low inventory and days on the market.
The median days on market for Kailua is 32, which is the same for Oahu overall. The current months of remaining inventory, or the time it would take to sell all the current properties listed for sale, is a remarkably low 2.3 months. (Oahu is also low at 3.2 months.) Six months of remaining inventory is considered the turning point from a buyer’s to a seller’s market.
Says Corinda Wong, REALTOR and partner at Prudential Locations, “The market in Kailua is getting tighter, busier. In the last six months, it’s really started to change. Right now inventory is very tight and things are priced well. The listings look good. There are a lot of things selling at and above listing prices. Homes on the market sell within a few weeks, especially if they have that Kailua ‘feel.'”
When asked to describe the “Kailua feel,” Wong smiles and says, “It’s a beach town. The homes are airy, the furniture is light and vibrant. They have a relaxing, casual feel. Buyers love the local, beach-style flair.
If they can’t get a house on the beach, then they want a house that has that kind of a feel to it.”
The good news for sellers is that buyer interest is spread across price ranges.
Says Wong, “Even our high-end market is moving. In the last six months, about 43 properties have sold in the $500,000-$700,000 range. About 76 properties have sold in the $700,000-$1 million range, and 37 in the $1million-$2 million range. Only six have sold in the over-$2 million range.
She continues: “There is little inventory and there is demand. There’s a lot more sold than what’s available. This tells me that demand is very high and we’re looking at a strong market.”
Historically, when inventory shrinks while demand grows and days on market are low, these forces combine to result in pricing pressure. Wong points out that if price increases do result, buyers today can still benefit from interest rates that are at all-time lows, making higher-priced homes more affordable.
Kailua, however, benefits from having a wonderful mix of properties, which appeal to a variety of buyers.
First-time homebuyers who have set their sights on Kailua will find the best opportunity in condos and townhomes.
“It’s a good way to get into the market,” says Wong. “We also see move-up buyers within the Kailua neighborhoods who are ready to transition from a condo or town-home to a single family home.”
Wong herself is a 25-year resident of Kailua who considers it a quintessential, multi-generational Oahu neighborhood: “We have great schools, lots of parks, all kinds of youth activities and plenty of options for dining and shopping. The downtown area has been redeveloped in recent years, and new merchants and restaurants continue to open, but the small town atmosphere remains. Local people patronize the boutiques, coffee shops and restaurants.”
Wong has experienced an interesting trend this year that may reflect a number of dynamics.
“This year,” she says, “I’ve been working a lot with people who are downsizing. They are retiring or looking for something smaller or with less maintenance. I’ve spent a lot of this year helping clients who want to sell the home they’ve owned for 30 or 40 years.”
To help sellers get top value for their property, Wong works with her clients to showcase how their home fits with what current buyers are looking for.
“I meet with them and help them to maximize their home’s value. I coordinate moving things out, find resources, help to declutter and create curb appeal. Together, we figure out the best things to be done so that a home will appeal to the target buyers – whether that’s painting or resurfacing or something else. Lastly, I stage the home to show it in its best light.”
As an example, Wong describes the situation of some recent clients: “They had an older home in which they had lived for decades. They were going to remodel in order to sell, but that was such a large endeavor, and would have been costly. We focused on presentation and staging it for today’s market, and we secured a great deal. We were in escrow within a week.”
For more information on properties for sale in Kailua, contact Prudential Locations at (808) 377-4747.