Distressed Properties in Maui

I attended a Brokers Forum today with the Realtors Association of Maui where John Anderson from Na Hale O'Maui (a community land trust) presented the following information about the growing foreclosure problem on Maui.

According to John, Maui's foreclosure rates are now equal to those of CA, NV, AZ, and FL - the states with disproportionately high foreclosure rates - and pending foreclosures here are increasing by 16% per month. Maui now ranks 9^th in the nation for foreclosure rates.

At the time he prepared his presentation, there were 338 active short sale listings on Maui's MLS and 72 REO's listed. Only 15% of the shorts sales are pending (60), while 36% of the REO's (41) are pending. This makes sense, since even though REO buyers are buying ‘as-is' with no inspections paid for by the lenders, they can get answers from lenders on REO's without having to wait for many months for answers as they do on short sales - especially since some buyers are trying to take advantage of the soon-to-expire 1^st Time Homebuyers' Credit.

As of today, Maui has 494 pending foreclosures, compared to 297 in April, 389 in June and 483 in August. John stated that 60% of the foreclosures on Maui are single family residences, the majority of which are owner occupied. The areas that are experiencing the most foreclosures are Wailuku, Kahului, North Kihei and Lahaina. This is primarily work force housing, and it's a real shame in a county where affordable housing has been such a problem for so long. The next problem Maui County will face is that August 2009 REO closings are priced at an average of 41% of the current assessed value, so our tax base is seriously eroding.

The silver lining is that for buyers with cash or the ability to obtain financing, prices are lower than they have been in years, and with all the foreclosures pending it will take a while to work through this much inventory -so prices should stay low for quite some time.