Lihue Real Estate Market Prices, Trends, and Forecast 2023

Buying a home in Hawaii is a dream that few people realize in their lifetime. Hawaii has several large and small islands, each with its own personality and unique real estate influences. For those who have fallen in love with the majestic Kauai Island, you will quickly find that Lihue is its heart. While the hub of commercial and government activity, Lihue still maintains a charming small-town vibe signature to Hawaiian life, with a few unique homebuying opportunities each year.

Before choosing your new home in Lihue, you may be curious about the real estate market. A little research and the expert insights of a Hawaii real estate agent like Jim Deville can help you find your golden opportunity for an island home.

The Lihue housing market trends

The Hawaii housing market is unique compared to anywhere else in the U.S. The land is not finite, as it is bordered by the ocean and has strong ecological mandates to protect the unique ecosystems that exist in the undeveloped spaces. There are only about 500,000 homes in Hawaii, including condos and apartments, and many people love living on the islands so much that they never want to leave.

Combined with other factors, this has led to a state-wide slowdown of the real estate market, with fewer homes sold in Hawaii this year compared to last year. On Kauai Island, real estate statistics from July 2023 indicate a drop. In July 2022, 63 new single-family homes, 50 condominiums, and 26 land sales were listed. In July 2023, 39 single-family homes, 60 condominiums, and 11 land sales were listed.

This notes an increase for condominiums but a drop for single-family homes and land. Median prices are also increasing in statistics comparing June 2023 to July 2023 for homes, condos, and land.

Increasing home values on Kauai Island

If you are looking for a good value on a Hawaiian home, now is a great time to house hunt. The median home price on Kauai is $1,300,000, up from $1,194,000 in July 2022. Kauai is also notoriously one of the top-priced home markets in Hawaii, with some home sales topping $10 million for luxurious Hawaiian estates. Homebuyers looking for a house or land that will provide a beautiful escape and appreciation over time will find opportunities in Lihue, Hawaii.

As in most housing markets, Hawaiian homes tend to appreciate over time. However, typical statistics can show widely varying results, as high-value estate sales can sometimes obscure average- and median-price calculations. A local real estate agent can help you get a realistic view of home values in your chosen region, excluding statistical anomalies like $10 million in home sales.

Interest rates are stabilizing

Interest rates have been on the rise over the last year as the Fed has sought to prevent a recession. This has contributed to slowing the real estate market nationwide as buyers wait to see where the interest rate will settle and seek better opportunities. The good news is that these rates have begun to stabilize, with ever-fewer rate hikes over time. For homebuyers, this means an easier time predicting your potential interest rate if you start house hunting now and potentially more stable rates if you choose a variable rate mortgage.

Now is a good time to consult with Hawaiian lenders who can help you secure financing to buy a home in the Lihue real estate market. Once you have an idea of your price range, you can begin the mortgage pre-approval process and lock in a favorable interest rate.

Reduced competition as residents leave the islands

The increased cost of living has prompted a growing number of people to leave the Hawaiian islands over the last few years. For those who can more easily afford an island lifestyle of imported necessities, this means less competition for the small number of houses on the market at any given time. While home prices are rising in Lihue, fewer buyers compete for each home. This is good news in a tight real estate market like Hawaii's.

Bidding wars are common for Hawaiian homes. Lower competition can mean less stress and lower prices when buying. Working with a local real estate agent can also help you gain access to privately listed homes, which will draw more select buyers and far less open-market competition to worry about.

Home prices on Kauai Island

Many single-family homes and condominiums make up Kauai Island's neighborhoods. For single-family homes on Kauai, the July 2023 median home price is $1,300,000, up nearly $200,000 from June 2023 and about $100,000 from June of last year. The average home price is $2,606,871. Why such a big difference? Hawaii is home to both modest family neighborhoods and mind-blowing estates, and those extremely high-end sales often skew the average (all home sale prices divided by total home sales) compared to the median (middle value). The average price is up by nearly $1 million since June 2023 but down about $100,000 from July 2022.

For condo prices in Kauai, the median sale price is $1,150,000, up about $300,000 from June and $100,000 from last year. Condos tend to have a more reasonable total price range, so average prices match the median more closely. The average condo sale price is $1,153,130 for July 2023, up about $100,000 from last month and about $40,000 from this time last year.

Buying a home in Lihue in 2023

With home prices and interest rates stabilizing, now is an excellent time to look for a home in Lihue. While the housing inventory is small, finding your dream house is still possible, as there are fewer buyers to compete with when the right home becomes available. Ensuring that you find your dream home in Hawaii involves navigating the unique and dynamic real estate market of the Hawaiian islands. To maximize your chances of success, collaborating with an experienced real estate agent who understands this distinct market is highly recommended.

Jim Deville can guide you through an enjoyable homebuying experience, from your house hunt to successful closing. Contact Jim today to begin the journey.

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