The Garden Island has been in tough economic times ever since the Hawaii real estate market bubble burst towards the end of 2008, although it is not the hardest hit of the Hawaiian Islands. The number of foreclosures on Kauai has admittedly skyrocketed since the recession hit, but the situation is not quite as dire as on Maui and the Big Island. According to a July 16, 2009 article in Pacific Business News, a regional financial news publication, “Kauai had one filing per 423 housing units, which was down 11.5 percent from May but up 360 percent over June 2008.” In other words, Kauai has been in serious trouble for the last year, but has recently been improving as a possible result of the considerable injection of federal stimulus money.
Bank foreclosures have had something of a fudging role in measuring the health of the Kauai real estate market, since they tend to leave the market more quickly than conventionally listed properties. This means that the rare bits of positive news in the local news must be taken with a grain of salt - they may be more misleading than genuinely uplifting indicators of economic growth in the real estate sector. For example, the Honolulu Star Bulletin reported on July 7, 2009 that “The quest for short sales and foreclosure properties dominated real estate activity on the Big Island and Kauai last month and continued to drive property prices down in most categories.” In other words, home prices have dropped so low that even mainland investors have started to express interest in Kauai real estate properties.
The Garden Island, which is the local newspaper for the island of Kauai, reported a comprehensive review of the Kauai real estate market that was conducted by the Kauai Board of Realtors. This analysis revealed that condominium prices have declined to price levels that were average about six years ago, while home prices have receded to 2004 figures. It continued to state that “We are in uncharted territory where some of the most accomplished economic experts are having a difficult time forecasting future trends.”