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My definition of a sellers market is one in which there are very few homes for sale; those that are sell quickly and sellers oftentimes have multiple offers, sometimes above the asking price.
A buyers market, on the other hand, is evidenced by an abundance of inventory for sale, oftentimes at inflated prices. Buyers typically are able to buy at a discount (sometimes substantial) from the asking price.
The Kauai real estate market in 2006 has very definitely changed from a sellers market to a buyers market. However I'm not sure many sellers are aware of this fact. The subdivision we live in here in Kalaheo is called Kai Ikena. The main street into the tract is Kai Ikena (no surprise) and the first turn off of Kai Ikena is Pai Street where we live. When the market was hot and heavy last year, houses that came on the market wouldn't last two weeks, or four weeks tops. Now on just these two streets there are six houses for sale and all have been on the market for at least four weeks and some longer.
This is a healthy sign for the market as it allows a "cooling off" period from recent steep price increases. Sellers will need to either adjust their asking prices downward or offer incentives to the buyer, such as paying all or part of their closing costs, doing an interest rate buy-down on their new mortgage, offering a decorating allowance, including appliances in the purchase price or offering to pay for a home protection plan. Sometimes they are going to need to do a combination of many of the above.
This is the time when sellers need to be creative if they want their home to sell prior to all the others in the area. So far that hasn't happened, however as we head into the second quarter of the year, I expect to see motivated sellers awakening to the reality of the marketplace. That will be a big plus for anyone looking to purchase property on Kauai this year.
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