A raft of wealthy buyers, including Facebook CEO Mark Zuckerberg, combined with limited supply has pushed luxury house prices in the small Hawaiian island of Kauai up by 60% over the past few years.
According to Realtor.com’s new Luxury Homes Index, the average luxury house price in Kauai, defined as the top 10% of sales, reached $1.555 million in the first six months of the year, up 19% on the year and 60% since 2013. (News Corp., which owns Mansion Global, also owns Realtor.com).
Known as "The Garden Island", Kauai is much less developed than some of its neighbors, but films such as "The Descendants", starring George Clooney, have put it on the map, leading to a rise in demand.
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"Kauai is a special tropical paradise that's so beautiful and different than the mainland US yet so accessible with direct flights daily. Hollywood discovered these qualities decades ago with more and more affluent enjoying the laid-back lifestyle here," Michael Schmidt, a broker at Coldwell Banker Bali Hai Realty, said.
"There's not much new development here as zoning is quite restrictive. Its demand of limited supply that continues drives prices upward. Keep in mind over 90% of the island is Conservation and forest reserve and we have only 1 highway around the perimeter (except for the 12 mile Na Pali Coast)."
Nearby Maui, whose celebrity residents include Oprah, has also seen hefty house price gains in its luxury sector, defined as the top 10% of sales. Average prices were up 28% since 2013, clocking in $1.436 million. The number of $1 million-plus home sales has almost tripled from three years ago to 38.
Montage Residences Kapalua Bay told Mansion Global that it has closed on $100 million worth of homes since launching in 2014, including an $8.65 million condo, a record for the island.
Both these islands made it into Realtor.com’s list of top 10 mid-tier markets with the highest luxury prices, released Tuesday, which was dominated by ski and sun vacation resorts. It tracked 277 U.S. counties.
"Vacation home classics in the east and west coast experiencing accelerated growth such as selected places in Southwest Florida and the State of Hawaii", Javier Vivas, manager of economic research at Realtor.com.
At $4.01 million, Pitkin in Colorado, home of the affluent Aspen ski resort, had the highest average prices in the secondary market in the first half of the year. This was 42% higher than in 2013, but down slightly when compared with the same period in 2015.
Pitkin was followed by the island of Nantucket, which is 26 miles off the coast of mainland Cape Cod and famous for its cobblestone streets. Nantucket has its fair share of famous owners, including former Secretary of State John F. Kerry and Google executive chairman Eric Schmidt.
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There, average prices were $2.351 million, although they were down 21.84% when compared with the previous year and 41.1% when compared with 2013.
Teton County, home of the affluent Jackson Hole skiing area, and Martha’s Vineyard, where many A-listers, including Meg Ryan have homes, also made it to the list. It is also a favorite holiday destination of various presidents.
Bill Clinton stayed at the home of Boston businessman Dick Friedman several times when he was in office, while President Obama and his family have also vacationed here.
TOP 20 SECONDARY MARKETS WITH HIGHEST LUX PRICES 2016
Graphic: Evie Liu
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