Aloha from Maui!
I'm sitting at a Open House in Wailuku. It is almost new 3 bedroom, 2 bath townhouse with a small fenced backyard. Large kitchen, nice bamboo laminate floors and staged very nicely. When I started sitting opens here 2 months ago, it was priced at $424,000. Now it is down to $396,000. There are 15 active listings and 5 pendings in this same complex. Similar units are priced from $385K-465K. I'm sure the owner is asking, "Why isn't my house selling?"
In the central area of Maui, prices have stayed strong with 8% increase in last year in median condo prices. So what is wrong? The median condo price in this area is about $282,000 so these condos are "higher end". Why should that impact this market? If you think of basic segments of a market you have:
- Low end condominiums
- Middle condominiums
- Starter homes
- High-end condos, 2nd homes
- High-end homes
Starter homes have come down in price enough to be competition with the middle condominiums. Median home price in this area is $542,000. Home prices have come down in most area of Maui but in the central area (influenced by large home developments) where they are up 3% from last year.
Assuming a conventional 20% loan, a person could buy a home for $470,000 and have about the same monthly payment as they would with the association payment at this condo. It's not an apples to apples comparison but it's close enough. And yes, there are homes in Maui you can buy for <$470,000.
Know your market, and you'll understand why some segments get hit harder than other!