The nearer your destination the more you're slip sliding away.
With the April median condo price off 52% compared to the same month last year and the median home price off 16%, lots of people looking - LOTS of people looking, what are buyers waiting for? With median prices down to 2004 levels, the last time Maui's median condo price was below $300,000 was July of 2004, what are buyers waiting for.
Buyers, in unison, "We're waiting for the bottom!"
Well May saw more sales for both homes and condos and the condo prices went up again.
One of the most common refrains we've heard at open houses comes from that couple wandering through and whimsically reminiscing, "I remember looking at this 5 years ago when we could have bought it for..."
Well today, you can buy it for what you could have 5 years ago. With interest rates down and expected to rise, prices at 2004 levels and lots of people "shopping," what happens next?
Well usually, whether you are waiting for the bottom to buy or waiting for the top to sell, while we are waiting to be sure, the bottom or top comes and goes and, once again we missed it by that much.
In the words of Paul Simon, "the nearer your destination, the more you're slip sliding away".
Maui condo prices down
For the ones that are selling, that is
Do you hear that ringing sound? Those are the real estate gods letting us know that the bottom of the market is near.
And the bargain hunters are snapping up bargains.
Through the first 5 months of 2009 the average selling price is off by 31% and the median is off by 28% compared to 2008. Both the median and the average may be skewed by some of the short sales and foreclosures. However, there haven't really been that many distressed property sales compared to the rest of the country. But they are coming.
The bargain sales, along with a smattering of short sales and foreclosures, are pulling asking prices down.
And the actual selling prices are adding more pricing pressure.
Consider that the current median asking price is $500,000 on the button. However, the actual median selling price for the last 2 months was $290,000 in April and $315,000 in May.
And the top end of the market isn't immune to price erosion either. Two examples are a Kapalua Bay Villa, originally listed for $2,395,000, eventually lowered the asking price to $1,575,000 and sold for $1,505,000. An ocean front unit at Kaanapali Shores was originally listed for $1.7 million. They reduced their price to $1,195,000 and settled for $970K.
So, are we at the bottom of the market? Maybe, maybe not. But are we at least close? Like I said, a lot of people who are smarter than me think so. At any rate, we are close enough that if you are a serious buyer you don't want to be looking in the rearview mirror a few months from now thinking, "I shoulda, coulda, woulda."
Highs and Lows
During the last 2 months we've seen more short sales closing. Twenty-five of the 76 sales made in the last 2 months were short sales or bank owned.
The low sale on the island was a Harbor Lights condo. This 1 bedroom, 1 bath unit was originally listed for $115,000. The price was lowered to $39,000 and it sold for $35,000.
A 3 bedroom, 3.5 bath condo at Hoolei topped the market. This 2,619 square foot unit was listed for $2,450,000 and sold for $2.3 million, or 94% of asking price.
Potts' Picks
This month we have 3 picks that offer great value.
First is an oceanfront property, with spectacular views, just steps from the water. It could use a little TLC which is reflected in the price. The one bedroom, 1.5 bath unit with all new furnishings is listed for $359,000. It is MLS #334908.
We also like a short sale at the Kapalua Bay Villas. This oceanfront unit has been upgraded to the Kapalua Resort Gold Standard. It was originally listed for $1,275,000. Now they are asking $799K. This unit is #328962 on the MLS.
Finally, offered for your consideration, a 2 bedroom, 2 bath, 1,269 square foot ocean view unit at the Masters. This unit is a short sale, listed for $695,000. Over the last 2 years the median selling price for 2 bedroom units at the Masters was $1,165,000. How low will this one go? Stay tuned. MLS# 336903.
If you would like to get a list of current short sales or if you would like to know a bit more about how short sales work, send us an email.
Home sales seem to have stabilized for the moment, if you can consider sales 35% - 40+% lower than a year ago stable. Last year's sales numbers were lifted with the addition of "affordable homes". However, when we correct for that anomaly, this year's sales are still well below last year.
If fact, for the year single family homes are off by 45% through May and the median price is down by 12%.
The average days on market for homes was 159 days in May which includes an average of 60 days for escrow. That indicates that what is selling is doing so in a very reasonable amount of time. So, if you are a seller and you are not getting any action you need to consider a price change. We are seeing an increase in first time home buyers who are finding more affordable homes and taking advantage of the IRS credit.
Area Trends
Maui's Central area of Kahului/ Wailuku had 22 sales in May. Kihei had 9 sales and no other area had more than 4.
In the Central area the median price of $453,500 was off just slightly from May of 2008. That is a bit surprising considering that a year ago about 20% of the Central area homes sold were the lower priced affordables. This year, however, about 33% of the homes sold in Kahului/ Wailuku were distressed properties.
In Kihei, the median selling price rebounded back to $676,000 in May from April's low of $425,000. That is still well off prices from a year ago.
Maui's Upcountry prices continued their downward trend. The upcountry had shown steady increases as locals escaped to the cooler temps and comparatively lower prices. Median prices in May for all upcountry areas were in the high $400's.
Distressed Properties
The number of short sales and bank owned properties is up to 196. That is almost double the 109 homes listed at the end of March.
In March distressed homes accounted for less than 10% of all homes on the market. They now account for 19.4% of homes listed for sale and a substantially higher percentage of homes sold for the month.
About 1/3 of the homes sold in the central area were distressed properties: either short sales or bank owned properties. Over half of the homes sold in Kihei were distressed properties.
We do expect to see increases in the number of bank owned properties and short sales listed in coming months. We'll be keeping a close eye on that trend.
If you would like a list of short sales and/or banked owned homes, send an email to request the list.
Potts Picks
This month we've picked 2 homes that offer great value.
The top of the top is 104 Woodrose Place in Kapalua. This 4 bedroom, 3.5 bath, 3,314 square foot home in the exclusive Pineapple Hill gated community was originally listed for $2,995,000. The price has been reduced to $1,995,000.
The next bargain is a short sale on the Kaanapali Hillside. 30 Kui Place features 5 bedrooms, 3.5 baths and 3,526 square feet of living space. It has ocean views and has been partially renovated. It was originally listed for $1,787,000. It has been reduced to $1,000,000.
This is an extremely rare opportunity. It's hard to find any 3 bedroom oceanfront condos that allow vacation rental for sale in Maui for less than $1,000,000. So, get out your paint brush, your tool belt and turn this into your own personal show place and/or a great rental property at the bargain price of $400,000. That's right, a realistic seller on Maui.
This unit is at Hale Kai, a low rise oceanfront property between Kaanapali and Kapalua. The resort offers snorkeling and diving in front of the property and has access to a small beach. It has an oceanfront pool, barbeques and gorgeous grounds.
Restaurants and shopping within walking distance. The best beaches on Maui, in fact some of the best beaches in the world, like Kaanapali, Kapalua and Napili are just minutes away. The world famous golf courses of Kapalua and Kaanapali are also just a short drive.
And then there is all of that year around warm sunshine.
The unit itself has 2 bedrooms downstairs and a full loft that is used as the large 3rd bedroom upstairs. Take our video tour of the property and contact Aloha Potts Realty for more details.
On September 1st of 2008 Skip Potts, my son, began his walk across America for People for Educational Equality (PFEE). The aim of PFEE is to bring awareness, resources and support to under performing, underfunded schools.
Skip's trek took him down the eastern seaboard to Florida and across the south through Texas and the desert southwest. He ended at the Santa Monica Pier yesterday, June 6 where the event was covered by ABC.
Along the way Skip had the opportunity to stop and speak to students at a number of schools about the doors and opportunities education can open. He was met with kindness and generosity throughout country.
To learn more about the walk and PFEE, visit http://www.pfee.org/. And feel free to make a donation to support education.
Top 10 Reasons to buy an aina nalu condominium now:
1. Location, location, location - easy walking distance to Front Street, shopping, restaurants/bars, wharf, dive shops, galleries, theatres/shows, library, banyan tree with frequent events/craft fairs, etc. You can walk to any location downtown or to the bus stop a few minutes away and not have to rent a car or spend money on gas! (price/value)
2. Gorgeous rooms with full kitchens, spacious stone showers, Bali-style furnishings, TV and air conditioning in each bedroom and living room and washer/dryer combination in each unit.(price/value)
3. Beautiful landscaping with lush foliage and bamboo trees right outside your windows - feels like a spa location tucked away in Lahaina Town. (price/value)
4. Two pools (one saline lap pool), a hot tub and spacious and well appointed pavilion that can be used for entertaining or special events. (price/value)
5. Wireless internet in pool and lobby locations, complementary coffee and newspapers. (price/value)
6. Expedia representatives onsite to provide additional amenities for guests and revenue to the AOAO. (price/value)
7. It's a short drive to the best snorkeling beaches in West Maui. (price/value)
8. The AOAO is making positive changes that should result in lower expenses for utilities and a 'Green' resort location for us all.
9. Prices are at a new low - lower than original developer prices - and quite possibly the lowest they will be for the foreseeable future.
10. You can really enjoy ownership now , while we have lower visitor counts, little traffic and great parking!
Here are some of the best buys at aina nalu today:
1 bedroom upstairs unit - short sale priced at $275,000
2 bedroom, 2 bath downstairs unit - short sale priced at $330,000
2 bedroom, 2 bath downstairs unit - short sale priced at $335,000
2 bedroom, 2 bath upstairs unit facing the saline lap pool, hot tub and pavilion - priced at $398,000
This article appeared in USA Today yesterday. That's confusing.
In any event, University of Hawaii economist, Byron Gagnes, and the executive director of the Realtor's Association of Maui, Terry Tolman, are quoted in a discussion of what's happening to prices in paradise.
The Reader's Digest version is that Maui prices are down and Gagnes and Tolman appear to be in agreement that prices are not yet at the bottom. In a follow up telephone interview Tolman claimed he was misquoted.
It's news reports like this that usually indicate we are at or near the bottom. In fact it's these kinds of reports that create the bottom.
Keep a close eye on the kind of property that suits you. If you are not getting automatic notifications from us now, let us know so you can be sure not to miss "the deal." Remember, no one is going to ring a bell to let us know we've hit bottom.
Napili Surf Resort sits on the southern tip of Napili Bay, the best bay on Maui. The architects who designed this complex positioned to take full advantage of the views. You look out across the bay and onto the ocean. So you get a sweeping view of the ½ mile long sandy beach and a spectacular view of the ocean with Molokai on the horizon.
From your condo at Napili Surf, you can walk down the stairs to the beach. From there you can explore the tide pools, enjoy a snorkel or just kick back on the sunny sandy beach. Whatever you choose, you can't miss seeing Maui's great green sea turtles, which are abundant at this end of the bay. But remember, they are wild and it is illegal to get too close to them.
Napili Surf, or "the Surf" as some of us refer to it, consists of 55 privately owned condominiums on 1.087 acres. The grounds are beautifully manicured and include a pool, oceanfront barbeques and a unique sandy seating area above the beach. The owners and guests frequently gather there to watch the kids boogie board and take in one of the spectacular Napili Surf sunsets showing daily.
Get details on Napili Surf 105 the first condo for sale at the Surf in 2 years. Call us about other properties for sale on Napili Bay or anywhere else on Maui.
New Report says foreclosure rates in Hawaii nearly triple.
We learned this week that there 337 filings in Hawaii in January according to Realty Trac. This was the 6 consecutive month in which foreclosure fillings exceeded 300. Prior to August we were averaging about 150 per month. In September there were 594 and in December 499.
More important to us is that Maui had the highest rate of fillings per household of all the islands. However, we are still seeing far fewer filings than the rest of the country on average.
Contact us to find out more about distressed properties in Maui. Contact Lee for a list of short sales and REO's.
Distressed property on Maui Yes, we do have short sales and foreclosures in Maui
A lot of people are coming to Maui intent on getting killer deals. They've heard the stories about some of the California or Florida markets and the deals in Vegas and Phoenix. When I have to inform them that we are not experiencing that same kind of melt down on Maui, some people simply don't believe me.
That said, we do have foreclosure auctions which I attend regularly and we have short sales. The numbers are climbing, and I expect they will continue to climb well into 2009.
This time, I'm not using a crystal ball or my powers of deduction to predict the future. I have some inside information.
At a recent auction I struck up a conversation with a fellow who turned out to be a process server. He's the guy that knocks on the door and tells you your home is going to be auctioned off.
He told me he is handling just 3 banks and he is serving 30 notices per week. That struck me as a large number so I asked how that compared to last summer, June or July.
He said he is serving triple the number he was doing last summer and the number is going up.
If you are interested in learning more about distressed properties on Maui, send me an email lee@alohapotts.com and I'll send you a list and some details.
Condo sales shrivel on Maui And the market for sellers is worse than the numbers reveal - Buyers, are you sensing an opportunity yet?
While a 33% decline in condo sales seems rough enough, it is actually worse. The logical question is, "if sales are that slow, if demand is that low, why didn't prices come down." The answer is prices did come down?" They did, you just couldn't see it.
That's because a large number of sales in Wailea skewed the statistics. This has the effect of misleading us in 2 ways:
First, a large number of the Wailea condo closings were the result of contracts executed in a prior year. That made sales activity appear more robust than that dictated by current demand. I'm told a lot of people who were committed to those deals wanted to get out, but couldn't.
Second the median price of those closings was well in excess of $2 million, which resulted in skewing both the average and median prices up.
To adjust for the Wailea effect we developed the WAM (Wailea Adjusted Median).
This reveals that in 2007 the WAM was $495,000. In 2008 the median didn't remain static as indicated by the overall results, it actually declined to $433,166, down by 14%.
The other thing that is lost in the numbers is the appearance that condo sales are off by just 33%. While the stat is accurate, the trend paints a more woeful picture for Maui.
In the first third of the year there were 370 condo sales. In the second third of the year, after losing the airlines, there were only 254 condo sales. In the final third of the year, after the trifecta, there were just 164 condos sales on Maui. The final third of the year was 56% off the first third.
2009 Predictions and advice
We will continue to see selling prices decline in certain types of condominiums. There are bargains to be found in
Oceanfront garden view units
Properties where maintenance fees have gone up and occupancy has gone down
Properties in which owners are being pressured to implement expensive renovations
Anywhere that the 4 D's are in play: death, divorce, disease and desperation.
Prices will hold in properties that are:
Newer
Renovated already
On the ocean with great views
In a unique location (think Napili Bay, Kapalua Bay, parts of Makena)
A word to Buyers
If you have ever been in the market for Maui property, now is one of the best times ever to be a buyer. There are certainly bargains to be had at certain properties. Your Realtor can root them out.
And even where prices are holding, now might be the time. Otherwise in 5 years you will walk into my open house and say, "Lee, I remember back in '09 when I could have picked up this oceanfront 2 bedroom unit for under a million dollars."
There's that rearview mirror again.
A word to Sellers
People are still buying. So if you are selling now you have to be smart about pricing.
If you are in the first group of properties I described, the ones where buyers are likely to find bargains, be strategic. Prices are declining, so pricing at the top or above what condos are selling for means you are going to continue the pride of condominium ownership on Maui. And worse, if you need to sell you will be doing what we call chasing the market down. You will be reducing the price over and over but you will always be just behind the price point at which your condo will sell. Listen to your Realtor and get ahead of the curve.
If you are an owner in the second group of condos I described and you want to sell don't get greedy or you too will continue to experience the pride of Maui condo ownership. Sooner or later people will pay for quality, but in this market they are deathly afraid of overpaying. Price your condo fairly, in line with the market and look for offers. If you are not getting showings or offers in a few weeks, consider a price adjustment.
Complexes to watch in 2009
Kaanapali Shores - If you are an investor, Kaanapali Shores continues to deliver high occupancy rates. And with the mandated Resort Quest renovations some disgruntled owners are wanting out and we are seeing some bargains.
Honua Kai - The first of the 2 towers is finished, and buyers are closing on their units. However, some of the closings are being delayed as buyers scramble to find financing in this post-subprime era. The developer may get some of these pre-sold units back.
Kapalua - Occupancy is down and pressure to renovate is heavier than ever. Some of the old timers are mad as hell and they're not going to take it anymore. Who can blame them? Big changes create big opportunities and Kapalua is a bargain right now.
Hoolei - This complex is new and had several closings last year. A lot of buyers wanted to get out of the deal but couldn't. Look for bargains in here from frustrated owners.
Opukea - This is a new complex still being sold by the developer. Developers need cash flow, so watch for bargains and incentives at this complex.
2008 Sales Sales 2007 % Change Homes 907 1,142 -21% Condos 788 1,179 -33% Land 97 226 -57%
2008 Median Price Median 2007 % Change
Homes $577,867 $630,000 -8% Condos $549,500 $550,000 0% Land $700,000 $562,000 25%
2008 Average Price Average 2007 % Change Homes 831,424 $919,942 -10% Condos 921,063 $816,867 13% Land 966,776 $841,091 15%
We are happy to see 2008 in the rearview mirror But will 2009 be the Year of the Bold Buyer?
As usual, the stats aren't telling the truth. It is a fact that sales are down in all categories significantly. It is also a fact that inventories are up. Ergo, prices should be down.
Overall, we see the median selling prices of single family homes was down by 8%. But what is not evident is the impact of affordable homes sales. You'll see that the median is not down as much as indicated.
We see the median for condos didn't change in 2008, indicating stable pricing. Wrong again. We'll show you how that number is skewed, and what we really have to look at for comparison is the WAM (Wailea Adjusted Median).
At the beginning of 2008 real estate sales seemed pretty stable in all categories and held through the first quarter. In April, however, we hit the beginning of what would be an economic trifecta for Hawaii.
• In April we lost 2 airlines, ATA and Aloha. Fewer flights meant fewer visitors. Less competition led to increased airfares which again resulted in fewer visitors and real estate buyers.
• By July, the price of oil was over $140 a barrel, once again impacting the price of air travel and many other things. Would-be tourists and buyers opted to do something closer to home.
• In October, as you started to get some relief on the price for filling your tank, the economic markets tanked and would-be buyers decided it was a good time to hang on to any cash they had left and just wait and see.
Welcome 2009! With more inventory in all categories, some of the lowest interest rates ever and some prices dropping back to 2004 levels...
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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