Market Update 3rd Quarter
(Months of January Thru August 2007)

Sales islandwide through August 2007 are the same for residential properties and off significantly for condominiums and vacant land as compared to the same period in 2006.  The significant drop in condominium and vacant land sales this year as compared to last year was caused by the closings in several new condominium and subdivision developments that were completed in 2006.  Only one new project (the first phase of the Kukui'ula Development) has been completed this year, which is reflected in the smaller sales numbers.  A better measure of the continuing strength of the Kauai market is reflected in the comparison of residential sales (which represent principally re-sales of existing residences).  The sales of residences are the same through August 2007 for the entire island and are off slightly in the Poipu/Koloa region.

Kauai's market has generally mirrored the West Coast market because the West Coast region is the home of most of our Buyers.  The dramatic upward trend in prices which started in 2002 leveled off in 2006, and 2007 prices are holding at 2006 numbers.  For example, the median sale price of a residence on Kauai was $655,000 in August 2007 as compared to $680,000 in August 2006.

We continue to have a positive outlook on Kauai's real estate market.  Kauai is a favorite location for second home purchasers and this demand is still being handled primarily by previously owned properties in the resale market.  There are several new developments being started this year, particularly in the Poipu area which will be available in the coming months to satisfy this demand.