No Rooms for Rent
Home and Condominum Rents Have Shot Up
It is difficult and expensive to find a place to rent on Maui or in Kona these days. There are stories of people being forced to look for roommates in order to find and afford a place to live. These two heavily visitor influenced areas have seen residential rents skyrocket the past couple of years after an extremely lackluster market for most of the 1990’s.
According to Ricky Cassiday, a real estate market consultant for Prudential Locations, both Kona and Maui posted double-digit increases in average rents for condominiums and houses in 2000 and 2001, after single-digit gains and even losses in the five years previous. Kona showed the biggest gain from 1999 to 2000, when the average rental price for a home shot up almost 24 percent from $1,124 to $1,388. Maui’s largest gain was in the condo rental market. The average rent jumped almost 22 percent from $809 to $986 from 1999 to 2000.
Cassiday attributes the jump in rental prices to the increased interest dot-comers and stock-market kings of the universe had in those areas during the boom, when the mainland people became rich and their home values were far below those of Hawaii homes. “There’s a lack of supply,” says Cassiday. “Demand shot up and the supply can’t respond as quickly to that demand.”
All of this has meant booming business for property managers in Kona and on Maui. CJ Kimberly, principal broker and owner of CJ Kimberly Realtors, says, “Excellent. It’s a great market. There’s lots of demand. It’s active. Things are turning over fairly rapidly.” Kimberly manages about 100 properties in the Kona area and says she’s just seen the best two years since the early ’90s.
“There’s definitely a problem, a (rental) shortage,” says Welsey Barut, broker and owner of Maui Tropical Realty. “I don’t know what can be done about it. We do see it here. We field about a dozen calls a day from people looking for housing.”
That has presented an opportunity for him to grow his business. Barut says he didn’t even think he was going to start a property management division when he opened up a couple of years ago, but it has become the backbone of his business. He says he did $6 million in sales in 2001 and $8 million in 2000.
“It was just crazy, I did twice as much volume (in 2000) and then the next year I wanted to scale it back a little bit. I wanted to keep it tighter and provide better service for my clientele,” says Barut. That idea of better service means that he’ll be expanding his business into areas such as cleaning and landscaping that provide services for the properties that Maui Tropical Realty manages.
With the slowing of the rush of mainland money, Cassiday says rental prices will be capped by lower visitor activity. He’s projecting rents to be either slightly down or to show low single-digit growth this year. Says Cassiday: “You won’t have the visitor demand and that will ripple down to the medium high and the medium end. The low end may benefit a little because all of a sudden when people can’t rent it to the tourists they’re going to say, ‘I don’t want my apartment staying empty.’”