2007 Market Overview
Maui Real Estate Advisor
2007 | Sales | Sales Prior Year | % Change |
Homes | 1,138 | 1,088 | 5% |
Condos | 1,179 | 1,247 | -5% |
Land | 226 | 255 | -11% |
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2007 | Median Price | Median Prior Year | % Change |
Homes | 630,000 | 693,000 | -9% |
Condos | 550,000 | 518,000 | 6% |
Land | 562,000 | 688,066 | -18% |
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2007 | Average Price | Average Prior Year | % Change |
Homes | 920,807 | 933,691 | -1% |
Condos | 816,867 | 782,915 | 4% |
Land | 841,091 | 1,045,406 | -20% |
A steady standoff results in a stable market
Despite record inventory, prices don't change much
As with much of the country, the real estate market on Maui was slower than in previous years. Unlike most of the country, the prices in Maui did not decline significantly.
While many buyers sat on the sidelines waiting for waiting for Maui prices to do what they're doing in many mainland markets, sellers held steady on their asking prices.
And "steady" might well be the best word to characterize our Maui market. Back in March we started describing the single family home market as stable. That is born out by the statistics. We said the condo market was in a standoff. That too is born out by the stats.Condo Sales
Condo sales started the year slow and ended slower. Overall condo sales were down 5% from 2006 which was a slow year compared to 2005.
That was not good news for sellers, but the news wasn't all that bad either.
The median selling price for all condos was up 6% according to the Real Estate Association of Maui (RAM). RAM reports the year as a whole for their report, so the number shown in the table above doesn't match the median selling price in December which was $626,000. The median price last December was $525,000.
Now, I'm not one to argue with the board, but when I look at the 2006 numbers and last year's, it looks like more than a 6% increase to me.
But there were bargains out there and there will be more this year.
If you are looking for a killer deal on a prime fee simple ocean view, forget about it, as they say. But if you can deal with a "garden or mountain" view there are deals to be had. If you don't get all queasy over the idea of leasehold, there may be even better deals.
Hot Markets
Kihei was the hottest market on the island and, its neighbor, Wailea was number 2. Combined they accounted for just over 60% of all condo sales on the island.
In Kihei, sales were up 21% and prices were up 5%. In Wailea, sales were up 15% and prices dipped a mere 2%.
Strange Markets
Maui's west side, consisting of Lahaina, Kaanapali, Kahana/Napili and Kapalua, was as strange as ever.
Our board reports Honokowai/Kahana/Napili as one area. It is the area where the majority of condo sales occur on the west side.
Sales in that area were down by a whopping 35% last year. Prices, however, were up. The average condo price increased by 2% and the median increased by 3%.
Where are the deals?
The real deals are showing up in:
- residential condos (no vacation rental allowed),
- developments and other locations where buyers got in late and rents haven't performed as expected;
- leasehold properties;
- properties where owners are facing some short term challenges, i.e., Kapalua and Kaanapali Shores.
Home Sales
A portrait of stability hides the true trend
Home sales showed some signs of softening, especially toward the end of the year. The first half of the year we averaged well over 100 homes sold per month. The second half of the year the average fell to the mid 80‘s each month. The decline started in July and carried through the end of the year.
Anecdotally, some realtors have stated that they are seeing more short sales and REO's. I'm not seeing them show up in any greater numbers on sources such as Realty Trac, but the public, including agents, seem to be more alert to them. Most people are forecasting that we will see an increase in the number of foreclosures on the island. In the meantime, we still rank in the bottom 3 or 4 states for foreclosures.
The overall picture is very stable Local markets varied. Home sales on Maui were up by 5% in 2007.
The central area was up 38% while prices in the area declined by 9%. It accounted for 45% of all home sales. And if we take out the affordable sales, I think we would see that prices were pretty stable there.
Declining markets
The big losers in 2007 were gainers in 2006. In the upper middle class neighborhoods like upcountry and Kiehi we saw some significant declines.
Upcountry, a haven for middle class and professionals escaping the tourist areas, enjoyed high demand and appreciation in prior years. In 2007, sales in the Kula and Makawao areas fell off 15% and 17% respectively. Prices followed, to a degree, with median price declines of 7% and 10% respectively.
Kihei was a big gainer in condos, but homes were another story. Kihei is a market where mid-income earners and professionals can afford a home. It's close to the beach and shopping. And just like upcountry, sales declined in 2007 rather significantly, off 13%. Prices, like much of Maui didn't change much, they were down by only 4%.
Rising markets
So, the lower end markets were up, the middle market was down - what happened in the luxury home markets?
Kaanapali home sales, where the median price was $2,300,875, were up by 13%.
In Wailea, homes sales were also up by 13%. The average home price there is $3,301,354.
In Kapalua, where condo sales suffered, home sales were up 200% (no, that is not a typo) and average price was $5,441,996.
Where are the deals?
The deals are almost everywhere, but they are not plentiful. There are good buys in Wailea and Kapalua, but no bargains spring to mind.
The Kaanapali hillside, on the other hand, has had and still has some surprisingly good buys.
We are seeing foreclosures, short sales and just huge price reductions upcountry, in the central area and in Kihei.
With today's low interest rates and some motivated sellers, this will be a good time,, or if you listen to Donald Trump, the best time to buy.
New Developments
The next big thing on Maui - Fractionals
On the mainland, fractionals have long been a popular way to buy a second home or vacation home. People have used this affordable way to acquire property in California, Utah, Colorado and other vacation hot spots for some time, but they really haven't caught on in Maui.
In 2007 we saw increased interest in fractionals and some new properties came to market. Now you can buy 1/6th to ½ interest in a vacation home or condo in Wailea, Lahaina, Kapalua and upcountry. Fractional ownership at luxury condos starts as low as $139,000.
In the next Maui Real Estate advisor we'll delve into some of the pros and cons of fractionals for you as a buyer, a seller and/or an investor.
Get more information and details
To get more information on property and trends, you can search the entire MLS at http://www.alohapotts.com/. If you can't find what you're looking for there, send us an email at lee@alohapotts.com, and we'll do our best to get an answer for you. As we get more requests for information, we'll add new sections to the website, newsletter or both.
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