Lee's Blog

Is the FDIC Killing Short Sales

Lee Potts (Aloha Realty Group) — Thu, 15 Oct 2009 13:33:25 -0500

I was just sent this link, Is the FDIC Killing Short Sales , by a fellow realtor suggesting that the pursuit of short sales is a hopeless cause based on guarantees being provided to most of the large banks by the FDIC? According this source the FDIC is guaranteeing 80-95% of the original loan value to the banks on foreclosure.

This has all the look and feel of an urban legend. But it's making the rounds and I'd just as soon put a stop to it with a dose of facts.

If I'm misunderstanding this, or if you have some facts please share before I spend hours digging in to it to discredit it.

Lee

Distressed and bank owned properties take center stage in Maui

Lee Potts (Aloha Realty Group) — Sat, 19 Sep 2009 22:11:48 -0500

Distressed and bank owned properties take center stage in Maui
There are some bargains, but you need to know what you're getting into

Na Hale O Maui is a community land trust here that carefully tracks distressed properties in Maui. Part of their mission is to acquire foreclosures and convert them to affordable housing. As I understand it, their charter allows them to buy properties once they are foreclosed, but not before, as in a short sale.

According to John Anderson, executive director, there were 483 foreclosures pending on September 1. That number has been increasing at a rapid clip since April when there were only 297 pending. According to Anderson, Maui now has one of the highest foreclosure rates in the nation.

Of the 483 headed for foreclosure, only 398 are listed as short sales. Which means the remaining owners who are in default are either trying to work something out with their lender, fighting the foreclosure or hoping it will just go away. For a lot of homeowners the foreclosure process is so stressful, they opt to do nothing rather than to be proactive.

Of the 398 short sales listed, only 60 are noted as pending, meaning under contract. One reason the number may be so low is that many listing agents take the position that the sale isn't pending until the lender gives their approval. Obtaining that approval can take months upon months. So this stat should be taken with a grain of salt.

Bank owned properties are known as REO's (real estate owned). There are 113 such properties in the MLS according to Anderson. 41 of those are listed as pending. The higher percentage of REO's pending compared to short sales is partially explained by fact that buyers and agents are dealing directly with the owner - the bank.

The final stats offered by Anderson are extremely telling and I am asked about this often. The answer is about 40%. The question is, "how much below market are properties selling for?"

According to Anderson, bank owned properties are actually going for 41% less than current assessed value. These properties are having a dramatic affect on the rest of the market here in Maui. That is demonstrated by the fact that the selling price for properties that are not REO's is 37% below their assessed value. For statistical purposes those are pretty much the same number.

Buyers can expect to see more short sales and REO's over the next few months, but do not limit your search for a great value to this group. Why? I just gave one reason; non-distressed properties are going for about the same price as distressed properties.

The most important reason though, is that buying from a private owner will likely get you a better deal than dealing with a bank. A private owner is required to provide you with disclosures about the condition of the property. You can also demand items such as CC&R's, association board minutes and other documents from the owner. And the owner may agree to make certain repairs and even pay for a termite inspection.

Banks won't do any of that. In fact when buying a bank owned property you will likely be required to sign a "bank addendum". This is usually a very one sided, if not outright onerous, document that is designed to protect the bank by rescinding most of your rights.

Maui is on sale right now. If you want a list of short sales and REO's email me and ask for the list. But if you get serious and we show you a property that isn't owned or under a lien by the bank, don't get mad, it's not a trick; it's just a good buy.

Want details? We have details. Also, check the Maui Real Estate Advisor.

www.AlohaPotts.com

Lee@AlohaPotts.com

Maui Real Estate Advisor August 2009 - Home Sales Report

Lee Potts (Aloha Realty Group) — Thu, 17 Sep 2009 15:00:39 -0500

Homes sales dialed back a bit over the summer
First time buyer credit a bust for single family home sales on Maui

While summer temps heated up on Maui, home sales cooled, dropping back below 60 units per month for both July and August. The 52 units sold in August is about the average for the year so far. If the $8,000 first time buyer credit is helping, we aren't seeing evidence of it in the single family home segment.

That may be because the price of a home on Maui is still out of reach for the majority of first time buyers. At a median price of $500,000, one can argue that in terms of recent history Maui is on sale. However, a mortgage on a half a million dollar home is still going to carry too much of a monthly nut for most young workers like teachers, fireman and hospitality employees.

Area Trends

Over one third of home sales in July and August were in the Central District (Kahului/Wailuku) where the median price for the last 2 months was just under $500,000. Of the 39 sales in the Central District, only one was a short sale and six were bank owned properties. All of the bank owned properties went for near the asking price and one went for more than asking.

As selling prices Upcountry (Pukalani, Kula, Makowao) came down, sales went up. You'd think there was a relationship or something. With a median selling price of $522,000, there are some bargains up there. There were 2 short sales and 3 bank sales Upcountry, which accounted for more than 20% of the homes sold.

Kihei had only 14 sales for the two month span. There were 14 sales in Kihei in June, so that's quite a drop off for the last 2 months.

The median selling price for the 2 months was around $400,000, well below the Maui median and even well below the Central area.

Just like Kihei, the west side, Lahaina/Kaanapali/Kapalua, had 14 sales. Unlike Kihei the median selling price was $700,000 - $200,000 higher than Maui and $300,000 higher than Kihei.

Distressed Properties

Of the homes sold, 12 were bank owned and 9 were listed as short sales. Distressed properties accounted for 19% of total home sales for July and August. That's down from 24% in June.

The bank owned properties are selling near or a little above asking price. There's a reason for that. If the bank prices the property at a bargain price, it goes quickly and at around asking price. If the bank prices the property too high, nothing happens - for a while. Then the bank starts dropping the price. When it gets to the right price point, they get offers and the offers are, once again, near the new asking price.

Nine of the homes sold in the last 2 months were short sales. These also sold at close to asking price, and some higher than asking.

Highs and Lows

The lowest priced home to sell on Maui was in Wailuku. The listing for this house says it has 0 (zero) bedrooms and the agent describes it as "very aged". This charmer sold for $125,000.

The high end homes really took a hit over the last couple of months. The most expensive home in Maui went for $1,155,000. That's not even a luxury home in this neck of the woods.

Potts Picks

This month we looked at dozens of homes before coming up with this house and ohana in Kihei listed for $479,240. It's in a nice central Kihei location. It has 3 bedrooms and 2 baths in its 1,400 square feet. It also has an ohana that could be rented for a little extra income. It is a short sale, MLS 338921.

Our pick for luxury oceanfront living is on the west side. This spectacular 5 bedroom, 6 bath home offers over 5,200 square feet of living area and sits on almost ½ acre on the water. Asking price is $7.9M and it too comes with an ohana. It is MLS number 336534.

For more information send an email with your request to lee@alohapotts.com , or see all of the listings on Maui at www.alohapotts.com .

To see the report for sales of all types of property on Maui visit Maui Real Estate Advisor.

Kaanapali Shores 719 Maui video tour

Lee Potts (Aloha Realty Group) — Wed, 16 Sep 2009 02:00:44 -0500

Short sale - scoop up this amazing opportunity at one of the best properties, Kaanapali Shores, on Maui. Have you dreamt of sitting on your own lanai listening to the birds and the waves while watching a glorious Maui sunset? Have you been kicking yourself because you missed the great buying opportunities of days gone by? Well they're back, but they can't last long. Kaanapali Shores has one of the best rental programs on Maui and unit 719 is in a prime location. This is a short sale, so all offers must be approved by the lender to be valid.

Take a video tour.

Get details at www.AlohaPotts.com or email lee@alohapotts.com

Maui Real Estate Advisor August 2009 - Condos

Lee Potts (Aloha Realty Group) — Tue, 15 Sep 2009 22:53:54 -0500

Maui Real Estate Advisor

Market Overview August

Aug          Sales      Sales Prior Month      % Change       Sales Prior Year        % Change
Homes      52          57                           -9%               66                           -21%
Condos     62          69                           -10%              51                            22%
Land         3           12                            -75%              6                            -50%

Aug          Median Price      Median Prior Month      % Change      Median Prior Year      % Change
Homes    500,000          532,000                     -6%             645,000                  -22%
Condos 340,000          350,000                     -3%             625,000                  -46%
Land       999,990           322,500                    210%           422,505                   137%

Aug         Current Inventory      Inventory Last Month      % change       Months of available inventory
Homes           980                         1,012                       -3%                         17.19
Condos       1,496                          1,518                      -1%                         21.68

Prices fall, sales increase
Do you think there's a connection?

Maui condo prices fell back to earth in late summer. They tumbled back from the over achieving $500,000 + median in June to a mere $350,000 in July and $340,000 August. Unlike June, there wasn't much happening in the high end to help hold up the median this summer.

The lowest median so far this year was in April when it hit $327,000. The median has hit $350,000 twice and $345,000 once. So it seems pretty flat. Is this the bottom? We'll see.

The lower prices may be the reason for the boost in Maui condo sales. After the weak sales numbers in June, the summer offered some better results for sellers. July posted 69 sales with another 62 in August. Those are the second and third highest months this year and well above spring levels.

Seventeen of the 131 condos sold were bank owned with a median price of $150,000. Those served to pull the overall median down. Ten of the sales were short sales.

Short sales and REO's (bank owned) accounted for 21% of sales.

One of those short sales was a Hoolei unit listed for $3,675,000. It sold for $2,100,000.

Area Highlights

There were 55 condos sold in Kihei. That area accounted for 42% of all sales. The area got a boost by closings at the new development, Ke Alii Ocean Villas.

Kihei's wealthier neighbor, Wailea, had 9 sales. However, 6 of them were below $1 million.

The Central District Kahului/Wailuku, which usually has very few sales, had 18.

The west side (Lahaina, Kaanapali, Napili, Kapalua) shows 41 closings. That is bit misleading. The new sales manager at Honua Kai posted a number of sales that had previously closed to our MLS. It's good to have the information finally, but it skews the stats.

Aside from Honua Kai, there were 33 closings with a median price of $425,000. Only one was a short sale and one was bank owned.

Highs and Lows

Harbor Lights accounted for the 6 lowest priced condo sales including the rock bottom winner. The bank owned unit, listed for listed for $39,900, sold for $40,000.

The condo selling with the highest price was at the aforementioned Honua Kai. That went under contract in 2005, so we're not counting it for these purposes.

That takes us down to Wailea Beach Villas, where a nice ocean view 3 bedroom, 3 bath unit went for a cool $2,150,000.

Distressed Property on Maui

21% of the condos sold were either short sales or bank owned properties.
Of the 1,522 condos listed for sale, 175 are short sales and 27 are bank owned.

So, only 13% of the listings are distressed properties but they account for over 18% of the sales. What does that tell us?

If you would like to get a list of current distressed properties or if you would like to know a bit more about how short sales work, send us an email.

Potts' Picks

For the dream view that everyone wants to get in Maui it tough to beat Noelani 215 priced at $499,000. Both the living area and the bedroom face the lanai overlooking a great ocean view, just a few feet from the condo. It is a 1 bedroom, 1 bath unit. Get details from our website by searching for MLS 338499.

For oceanfront luxury it's hard to beat Puamana in Lahaina. In recent years, the oceanfront units there have peaked over $2 million and into the $3 million range. So, finding a 3 bedroom, 2 and a half bath for $1,775,000 can be someone's bargain. You can see it on the website. Search for 331788.

For more information send an email with your request to lee@alohapotts.com or, visit our website at www.alohapotts.com .

Come back for the report on Maui Home Sales Tomorrow

Bottom reached in Maui?

Lee Potts (Aloha Realty Group) — Sat, 05 Sep 2009 14:27:44 -0500

According to D. Leroy Laney of the Hawaii Pacific University we have officially reached the bottom. Thank goodness, I think. Does that mean that buying opportunities have passed, is it a better market for sellers, is employment rebounding NOW. See what professor has to say in the Maui News at http://mauinews.com/page/content.detail/id/523201.html.

Get Maui real estate news at www.AlohaPotts.com.

Kaanapali Shores 719 Maui condo for sale

Lee Potts (Aloha Realty Group) — Thu, 03 Sep 2009 14:12:59 -0500

Kaanapali Shores 719 is just about the perfect location for those spectacular Maui sunsets. This is a new condo for sale at Kaanapali Shores.

And Kaanapali Shores 719 isn't just a condo, it is spacious suite with a commanding view of Kaanapali Shores' grounds, the ocean and the island of lanai.

Your suite is has a generous 806 square feet of living area. Both the living room and the bedroom have windows that open to the ocean. So at night you can lie in bed and have the waves lull you to sleep. Then the songs on Kaanapali Shores' mynah birds will wake you in the morning.

See more pictures and learn about Kaanapali Shores at www.AlohaPotts.com or email Lee@AlohaPotts.com.

And stay tuned for the video tour.

Maui homes sales find moderate improvement

Lee Potts (Aloha Realty Group) — Sat, 08 Aug 2009 16:13:28 -0500

Still well below normal

The 62 homes sold in June are the most sold in any month this year. Is that good news indicating that sales activity is picking up.? It's actually a bit depressing. You see, there were only 2 months in 2008 that posted fewer than 62 sales. And we all know how bad '08 was.

The median price remained just below $500,000. So most of the homes selling on Maui cost less than most of the condos that sold last month.

With that being the reality, of the 1,015 single family homes for sale on Maui, only 260 are priced at $500,000 or less. 43% of those are distressed. While there are homes in that price range in about every community on Maui, most are in Kihei and the Central District - Kahului/Wailuku.

Area Trends

Roughly one third of June's sales were in the Central District. Kihei had 14 sales and Upcountry had 13. Maui's west side had only 5 sales.

In a bit of a reversal, the median price for homes in the Central District was above the Maui median. Upcountry homes and Kihei homes were both below median.

In Kihei the median selling price was down by 23% so far this year. That looks pretty good compared to Upcountry losses. So far, the median price in Kula is off by 56%.

Distressed Properties

Of the homes sold, 12 were bank owned and 3 were listed as short sales. Distressed properties accounted for 24% of total home sales in June. They were surprisingly evenly distributed: 4 in the Central District, 4 in Kihei and 3 Upcountry.

We are also seeing some limited short sale activity in some of the upper end neighborhoods like Kapalua and Kaanapali. There are even a couple of distressed oceanfront homes on the market.

Highs and Lows

The lowest priced home to sell on Maui in June was a 3 bedroom, 1 bath home in Kihei. It was a bank owned property REO, originally listed for $265,000, but it sold for more at $272,000.

And there is still money out there to buy nice things as someone in Wailea discovered. And sometimes you can even get bargains at the high end. The 5 bedroom, 5 baths, 5,685 square foot ocean front home was listed for $18,500,000, but it sold for a paltry $11,250,000. I have access to another home like this if you have the money and the interest ;>)

Potts Picks

This month we've picked 2 homes that offer great value.

If you are still thinking about $11 million 5 bedroom homes, how about a deal 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. MLS 332444.

But if you need to be beachfront, there are bargains to be had. This house is on Lahaina's famous Baby Beach. It is a 4 bedroom, 4.5 bath, 2,380 square foot like-new home. It was originally listed for just under $10 million. The price has been reduced to $6,450,000. If you can't quite afford this one, send it to friends with money or hui up with some pals and buy it yourself. It is MLS number 324103.

For more information send an email with your request to lee@alohapotts.com, or see all of the listings on Maui at www.alohapotts.com .

Maui condo prices rebound?

Lee Potts (Aloha Realty Group) — Sat, 08 Aug 2009 12:11:35 -0500

Maui luxury condos lead the way

The Maui median condo price bounced back in July, buoyed by closings at the luxury end of the price spectrum. These included 2 units at Hoolei in Wailea and 3 at the Palms of Manele on Lanai. The Palms units each sold for exactly the same price, $1,875,000. The asking prices on those were all over $2.3 million.

The sales median was also helped by several closings at Ke Alii Ocean Villas, a new upscale development in south Kihei.

All told, there were 11 sales above $1 million and 11 sales below $250,000.

With only 45 total sales, June was the second slowest month of the year. In June of 2005 there were 194 sales. So buyers are still being very cautious.

It will be interesting to watch the activity in the coming months. While some economists are telling us that we're at the bottom of the market, Maui condos are going to be affected by two other factors, one unique to areas like Maui, the other not.

About half the condos sold in Maui allow vacation rentals. Lenders are continuing to tighten their requirements for so-called ‘condo-tels'. Many lenders won't even make loans on condo-tels. Those who do are now requiring 30 -40% down and charging more than 1.5% higher interest rate. That will limit the pool of buyers who are willing and able to pull the trigger.

Many of our residential condos on Maui were purchased by folks who couldn't afford to buy a house. And many of them bit off more than they could chew and are part of the subprime mess. We will see many more of them going into distressed property status as short sales or foreclosures.

Distressed properties tend to be priced below the "normal" market price. When there are so many, as we have on the market today, they pull down the prices of the normal market.

So we will watch the market and see if June's uptick will stick or if it is just an anomaly driven by some high end sales.

Area Highlights

Once again Kihei accounted for more sales than any other area, with 19. Wailea had the second most sales with 8. So South Maui dominated the condo market totaling more than half the sales on the island.

In West Maui, once the king of the condo world, there were only 11 sales for the month. West Maui prices are coming down, approaching some of the perceived bargains in Kihei.

Highs and Lows

The lowest price for a condo in Maui was paid at Harbor Lights. The asking price was $90,000 and the 2 bedroom 1 ½ bath unit sold for $50,000. It was a short sale.

The second lowest selling unit was in Southpointe. It is interesting because it was bank owned, an REO. It was listed for $149,000 and it sold for more, $157,195.

At the other end of the spectrum was a Wailea Beach Villa. The 3 bedroom 3 bath garden view unit went for $3,295,000 all cash. Over three million bucks for a GARDEN VIEW in Maui? I don't get it.

Distressed Property

Of the 45 condos sold in June, 4 were short sales and 4 were bank owned. So, just under 20% were distressed.

Of the 1,522 condos listed for sale, 175 are short sales and 27 are bank owned.

So, only 13% of the listings are distressed properties but they account for over 18% of the sales. What does that tell us?

If you would like to get a list of current distressed properties or if you would like to know a bit more about how short sales work, send us an email.

Potts' Picks

The deal this month is at Kaanapali Shores unit 407. It's a nicely remodeled unit on the inner courtyard with beautiful ocean views. Our analysis says these types of units should sell for the low to mid - $500's, but this one is offered for only $475,000. Get details from our website by searching for MLS 338669.

I'm not seeing a lot of great buys at the top of the market. Our pick for the best is on Lahaina's Baby Beach. This is a 2 bedroom, 2 bath unit of 1,740 square feet. It is priced $1,000,000 less than the next lowest priced unit and more than a million lower than the last sale at $2,750,000. You can see it on the website. Search for 338148.

For more information send an email with your request to lee@alohapotts.com or, visit our website at http://www.alohapotts.com/Home_Page.html.

Hawaii's top economist says real estate has hit the bottom...Kind of

Lee Potts (Aloha Realty Group) — Sat, 08 Aug 2009 00:27:19 -0500

Last month we told you that ringing sound was the market hitting bottom. Well Paul Brubaker, Chief Economist for the Bank of Hawaii (America's #1 Bank), professor and all around smart guy, says the same thing... almost.

Paul spoke at the Realtors Association of Maui quarterly meeting. His market forecasts over the last several years have been extraordinarily accurate. It's like he's got a crystal ball or something. You can see his entire presentation at http://yourwebcast.com/ram/brewbaker09.htm. If you can't open it, send me an email and we'll figure it out.

The short version is that the single family home market has hit bottom in Maui. Paul believes that condo prices are still headed south. In either case, he is urging buyers, "if you have the money, now is the time to buy.

Just a few details before you get the rest of the report. Inventories seem to have stopped rising. The "days on market" are comparatively short. The properties that are selling are moving pretty quickly.

We are seeing bidding competition at the low end of the market. Some REO's (bank owned properties) are selling for more than asking price. On the other hand, we are seeing some HUGE price reductions on properties at the top of the market.

Want details? We have details in the Maui Real Estate Advisor.

Aloha Lee Potts

Aina Nalu H 103

Lee Potts (Aloha Realty Group) — Sat, 18 Jul 2009 21:37:58 -0500

Lahaina's premiere boutique condominium, Aina Nalu, complex at half price? No way!

WAY

See the video.

THIS IS A 50% INTEREST LISTING. This fabulous vacation home in the heart of Lahaina provides you with lots of options. Did you ever dream of owning property in Maui, but thought it was out of reach? Imagine coming to your own luxurious condominium in the heart of warm Lahaina. You can take a dip in your pool, walk to the nearby restaurants and then relax at home. If you thought it was out of reach, think again.

Aina Nalu H 103 is located on a green belt and offers easy access to the barbeques and the garden pool. It has one of the best locations on the property.

The custom interior of this unit features 2 private bedrooms and one bath, with natural stone tile showers and granite countertops. The Balinese furniture was imported specially for aina nalu. Even the carpet is custom woven for this complex. Aina Nalu is one of the best values on Maui.

Restaurants, shopping, cultural events, parades, great beaches and the annual Lahaina Halloween bash are all just a short stroll away. 2 pools, hot tub, green belts, a huge pavilion designed for relaxing and group events make this a perfect place for a romantic get away or a big family reunion spot. Bali style appointments, naturalized fountains and garden settings perfect for meditation or just relaxing generously dot this unique 8.6 acre property.

You can own 50% of this unit. Think of it. All benefits of ownership, all the fun, all the pride of your home in the islands for half the price.

Get all the details at www.AlohaPotts.com or call Lee at 808-276-8776.

Maui Real Estate Picture Unfolding

Lee Potts (Aloha Realty Group) — Sun, 12 Jul 2009 16:25:51 -0500

The local news is painting a dire picture of real estate and the economy on Maui. One story said that real estate sales were DREADFUL, http://www.mauinews.com/page/content.detail/id/520829.html . In a story entitled "Maui Wipeout http://www.mauinews.com/page/content.detail/id/520909.html , today's front page, the paper details some of the facts about foreclosures and bankruptcies on Maui.

These stories offer interesting and somewhat depressing pieces of a bigger puzzle. Is it really this bad or is there opportunity? If so, where and for whom? What does it mean and what do the actual numbers have to say? Stay tuned for the "rest of the story", coming soon to an email or blog near you.

Lee Potts

www.alohapotts.com

April - May sales figures and commentary for Maui

Lee Potts (Aloha Realty Group) — Fri, 03 Jul 2009 21:00:15 -0500

Market Overview May

May	Sales	Sales Prior Month	% Change	Sales Prior Year	% Change
Homes	56	48	17%	97	-42%
Condos	47	29	62%	84	-44%
Land	7	11	-36%	9	-22%

May	Median Price	Median Prior Month	% Change	Median Prior Year	% Change
Homes	487,500	487,500	0%	567,000	-14%
Condos	315,500	290,000	9%	512,500	-38%
Land	530,000	1,100,000	-52%	600,000	-12%

May	Current Inventory	Inventory Last Month	% change	Months of available inventory
Homes	1,027	1,104	-7%	20.14
Condos	1,609	1,756	-8%	55.48

Market Overview April

Apr	Sales	Sales Prior Month	% Change	Sales Prior Year	% Change
Homes	48	52	-8%	78	-38%
Condos	29	48	-40%	94	-69%
Land	11	7	57%	8	38%

Apr	Median Price	Median Prior Month	% Change	Median Prior Year	% Change
Homes	487,500	504,500	-3%	577,500	-16%
Condos	290,000	331,000	-12%	600,000	-52%
Land	1,100,000	1,050,000	5%	477,000	131%

Slip sliding away

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.

For more information send an email with your request to lee@alohapotts.com or, visit our website at www.alohapotts.com.

Homes sales find moderate improvement

Still well below normal

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.

For more information send an email with your request to lee@alohapotts.com, or see all of the listings on Maui at www.alohapotts.com.

3 bedroom fixer upper on the beach in Maui.

Lee Potts (Aloha Realty Group) — Mon, 08 Jun 2009 00:22:25 -0500

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 3^rd bedroom upstairs. Take our video tour of the property and contact Aloha Potts Realty for more details.

Lee Potts

808-276-8776

Walk across America for education comes to an end

Lee Potts (Aloha Realty Group) — Sun, 07 Jun 2009 15:44:36 -0500

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.

Lee Potts

808-276-8776

Top 10 to buy aina nalu now

Lee Potts (Aloha Realty Group) — Fri, 05 Jun 2009 22:16:16 -0500

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

Maui prices down according to USA Today

Lee Potts (Aloha Realty Group) — Fri, 01 May 2009 22:54:01 -0500

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.

Lee & Barb

Lee@AlohaPotts.com

808-276-8776

Napili Surf Resort Condominums

Lee Potts (Aloha Realty Group) — Sun, 15 Feb 2009 23:31:13 -0600

The place where everyone wants to be.

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.

Catch the video tour of Napili Surf Resort.

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.

Lahaina Lee Potts R(S), MBA
The Aloha Potts Team

Maui Foreclosure News

Lee Potts (Aloha Realty Group) — Sun, 15 Feb 2009 20:00:09 -0600

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.

Live Aloha!

Lahaina Lee Potts R(S), MBA
The Aloha Potts Team

Maui Foreclosures and Short Sales

Lee Potts (Aloha Realty Group) — Fri, 13 Feb 2009 22:54:14 -0600

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.

Lahaina Lee Potts

808-276-8776

Maui Condo Sales Stats 2008

Lee Potts (Aloha Realty Group) — Tue, 03 Feb 2009 12:00:56 -0600

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.

To read the full market report of the Maui Real Estate Advisor 2008 wrap up go to www.MauiRealEstateAdvisor.tv. For more information send an email with your request to lee@alohapotts.com or, visit our website at www.alohapotts.com .

Maui Real Estate Advisor - Year End Wrap-up Part I

Lee Potts (Aloha Realty Group) — Mon, 02 Feb 2009 23:11:21 -0600

Year End Wrap Up 2008

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...

It's a great time to buy real estate in Maui.

Get the full story at www.MauiRealEstateAdvisor.tv or email lee@alohapotts.com

Polynesian Shores 211

Lee Potts (Aloha Realty Group) — Sat, 31 Jan 2009 11:02:18 -0600

There's no place like home, especially an oceanfront home on Maui. Polynesian Shores is one of sweetest spots on Maui's west side. It is situated perfectly between Lahaina and Kapalua. That makes for warm mornings and cooling afternoon breezes.

And you will enjoy your mornings and your afternoons on your lanai. Polynesian Shores 211 is situated so that you have a beautiful view and privacy. It looks out over 2 acres of green tropical grounds on the turquoise Pacific.

From the lanai, you can take in the best part of Polynesian Shores 211, the view. You can relax on your lanai and look across the rolling green courtyard, over the pool and out onto the ocean to see whales leaping against a background of Molokai in the distance. And don't forget the sunsets and rainbows.

Polynesian Shores 211 is a 2 bedroom, 2 bath unit of 855 square feet. It has been completely renovated from top to bottom with new tile throughout, upgraded baths, all new appliances, new granite counter tops and new furnishings.

But don't just read this, watch the video.

Polynesian Shores is listed for $769,000. The current owner is a Certified Seller, so make an offer. You'll be glad you did.

Get more information at www.AlohaPotts.com or email me, Lee@AlohaPotts.com.

Live Aloha!

Hale Kai 213 - Beachfront Bargain

Lee Potts (Aloha Realty Group) — Fri, 23 Jan 2009 01:18:37 -0600

You could live on your lanai at Hale Kai 213.

It is the lowest priced non-ground floor 1 bedroom 1 ½ bath oceanfront, ocean view condominium on the market in West Maui.

When you close your eyes and imagine yourself sitting on your lanai in Maui, what do you conjure up? Do you hear the waves breaking? Can you peer into the turquoise water and see the outline of the reef just a few feet away? And then do you wake and say to yourself, "that is the impossible dream"?

Not so fast, dreamer.

Hale Kai 213 is reality, and it would be a bargain at $500,000 or more. But the asking price is only $439,000!

The condo for sale, Hale Kai 213, is unique. It is a 1 bedroom, 1 ½ bath that offers 600 feet of living space downstairs. There is also a small loft suitable as a reading or hobby area upstairs. It has been newly furnished and decorated with contemporary island style furniture.

Hale Kai 213 is second floor end unit. That is special because the units have additional louvered windows on the side wall for more light and to take advantage of the cooling afternoon tradewinds. The second floor location gives you the privacy that you can't get on the ground floor. And, unlike high rise locations that leave you feeling distant from the water, the second floor feels like you are right on the ocean.

Hale Kai 213 is being sold by the Matthew family. The Matthew's, like many of the current owners at Hale Kai, are the original owners. The fact that Hale Kai was built in 1966 and many of the original or second owners are still owners here, is a testament to the quality and desirability of the property. This second home holds many fond and dear memories for the family. Unfortunately, the parents are no longer able to make the trip to Maui. So, it's time to sell this unit and move on with their lives back on the mainland.

It might interest you to know that, according to the Maui Condo Book, 60% of the condos at Hale Kai are owner occupied. Many of the other units are rented out as vacation rentals. Hale Kai 213 is almost 100% booked from late December to April. So, whether you choose to live here, keep it as a second home, use it as a vacation rental property or some combination, this might be the perfect place for you.

Curious? Take a peak inside. Go to Aloha Potts.com and click on Hale Kai Main for a tour of the property, then go to Hale Kai 213 for a look at the interior and fun view of us bringing in the new furniture.

L. Lee Potts, MBA R(S)
808-276-8776
Lee@AlohaPotts.com

Huge price reduction at Honua Kai 724

Lee Potts (Aloha Realty Group) — Thu, 22 Jan 2009 02:10:19 -0600

If you have ever thought about owning a unit at Houna Kai, but were waiting for the "deal" unit 724 is now the lowest priced 1 bedroom at Honua Kai

Here is a serious seller. The price on Honua Kai 724 has just been reduced to $629,000. This huge price cut makes it your best deal at Honua Kai on a luxury one bedroom condo.

This owner/reservation holder is obligated to pay $690,000 for this gorgeous unit in Maui's best new building on Kaanapali's last stretch of open beach. This investor is willing to take a $61,000 loss, and you have a chance to buy into the market and gain instant equity.

Don't wait. This unit is scheduled to close soon. Once it does, this deal is off the table.

Get details at Honua Kai 724 or email Lee.