Aloha from the Garden Island of Kauai,

Economic recovery is officially “knocking on Kauai’s front door” according to the Hawaii Economic Research Organization’s economic forecast released this month. Visitor arrivals have stabilized and should increase as major tourism markets begin a recovery of their own. The summer has seen full flights to the island, but high fares from the west coast have been a major complaint of visitors. Alaska Airlines which is promoting the lowest fares to the islands will add two new nonstop flights to Lihue from San Jose and Oakland beginning in March.

Unemployment is still high, just under 9%, but projections are for a gradual improvement. New business activity has been spurred by the optimism of entrepreneurs. The Kukui’ula Development which had stalled is now “charging ahead” with the construction of new homes and condos in Poipu. These luxury residences will include a golf course, pool, spa and clubhouse. In spite of this, the volume of properties on the market probably will keep prices low over the next few years. Coupled with the lowest mortgage rates in 50 years, we are truly in a buyers’ market. Those who like statistics can link to the Kauai Board of Realtors market analysis (www.kauaiboard.com). The data show a 62% increase in number of properties sold in the first half of 2010, compared to the same period in 2009, with sales prices remaining at approximately 2003-2004 levels.

In Princeville, the new Makai Course is planning a clubhouse, exercise facility and pool. The Prince Clubhouse restaurant has closed for renovations. The new restaurant opening in August will be part of the Roy’s chain. Except for some future executive homes to be constructed on the Princeville Ranch and the nearby Prince Golf Course, much of the future growth in the Princeville area will be private residences on the one hundred or so vacant lots. These lots are selling now at an 8-10 year low. Prospective buyers should take a look at some of these gems that border golf courses and greenbelts.  This month Travel and Leisure magazine named Kauai the Best Island in Hawaii and second in the World’s Best Islands, trailing only the Galapagos. Adding this to Dr. Beach’s ranking of the Hanalei beach as the #1 Beach in the US and to Fodor’s Award to Hanalei Bay Resort’s stunning pool as one of the ten best hotel pools, future visitors should be enticed!

This summer saw three movies filmed on the N. Shore. George Clooney, on island to film “The Descendants”, caused quite a stir among locals and tourists. Tahiti Nui, a popular spot for dinner and entertainment in Hanalei town, was a favorite spot for filming and stargazing. Kauai actually got to play itself in this movie rather than being a stand-in for other tropical places.

If you have been thinking of an island purchase, now is the time. Prices and interest rates will surely rise. An economist recently remarked that every point increase in rates will add 10 % to the cost of ownership.

Please checkout property inventory on my website, www.joewilliamshawaii.com. If you find something of interest, call and I will help you analyze the opportunity. Some properties do not make the active market and are sold privately. I have knowledge of the scene here and can help direct you in your search.

Mahalo,