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.