Lee Potts

Maui Real Estate Advisor

Issue 47, January 2012

End of Year 2011 Sales Statistics

Sales up, prices down but…

Real estate starts its gradual comeback

Last month the overall theme of the market place was a trend toward stability. Looking back on 2011, you can see that Maui’s real estate market was on that road all year long.

The numbers show that median prices declined by 6% for homes and 18% for condos, although followers of this newsletter know that condo stats are dramatically skewed by one new condo development. However, the number of sales was up on all categories.

As the sales of condos and homes rises, the number of condos and homes for sale diminishes. Increasing demand with more limited supply should naturally lead to increasing prices.

As we enter 2012 the island is bustling with activity. Our associates, the serious real estate agents, are all busy and their sales are closing. Maybe it’s the economy, maybe it’s the interest rates or maybe the vast majority of buyers sitting on the sidelines have seen that the bottom is near, or maybe it’s behind us.

Whatever it is, you can rest assured that today is another day in paradise.

Is the slide in condo sales reversing?

After an up, up, up and down, down, down year - they are up again

There were 1,155 condos sold on Maui in 2011 – virtually the same number that sold in 2010.

But what was the effect of Honua Kai sales on the overall numbers? Honua Kai, west Maui’s newest major condo development, wrote sales contracts for the yet to be built complex at the top of the market. The final building was completed and 188 sales were closed in 2010. That represented 16% of the all Maui condo sales for the year.

If we take that abnormal spike into account, Maui condo sales were actually up not 1%, but 13%. That is very healthy growth for the year.

The median selling prices have zigzagged up and down throughout the year and ended up at $310,000 - 18% less than 2010. But for the year 2010 median prices peaked at $499,000 in March, but by August hit $310,000, the same as the median price for all of 2011. So, despite the zigzagging price line, the trend is flat.

Distressed properties (short sales and foreclosures) represented 34% of the sold properties in 2011 and 16% of the properties on the MLS throughout 2011.

Area Statistics – Year-End 2011

The “comeback” area on Maui may have been Napili/ Kahana/ Honokowai. The area had 201 condo sales – an increase of 32% from 2010 numbers. Despite a 17% decrease in median sales price ($250,000), the area’s sales dollar volume came in at about $58.6 million (a 16% increase).

Despite a comeback of its own in the later part of the year, Kaanapali only had 136 condo sales in 2011. This was 48% less than the number of condos sold in 2010, which was bolstered by Honua Kai closings. That also impacted the 20% decrease in the median sales price ($637,850) for the area and resulted in sales dollar volume ($102 million) at 67% of last year’s numbers.

Kapalua saw a 4% increase in the number of sales with 29 condos sold in all of 2011. A 14% decrease in median sales price ($644,000) resulted in an 18% decrease in sales dollar volume, coming in at a little under $36.2 million.

With 81 condo sales in 2011, Lahaina Town saw a 27% increase compared to 2010 numbers. Sales dollar volume went up 32% to almost $30.7 million despite an 11% drop in median sales price ($337,205).

The south Maui area of Kihei had 422 condo sales in 2011 – an increase of almost 10% compared to 2010. With a sales dollar volume of over $129.4 million, Kihei saw an almost 3% increase in total sales volume. It was not unlike the other areas of Maui – taking a 8% decrease in median sales price to $243,750.

Although it had relatively no major fluctuation in sales (103 – down 1%) and sales volume ($159.5 million – up 0.5%), Wailea/ Makena had the only increase in median sales price in all of Maui’s condo sales. The median condo sales price in Wailea/ Makena area was up 5.6% from 2010 to $900,000.

Maalaea welcomed 29 condo sales in 2011 – a 26% increase from 2010. Their median sales price of $210,000 was about 11% less than 2010’s figure. A total sales dollar volume of over $6.4 million represented a 10% increase from 2010 sales.

At 125 sales, Maui’s Central Area (Kahului/ Wailuku) saw a 12% increase in the number of condo sales compared to 2010. Sales volume was up 5% from last year at almost $25 million. The median sale price was down almost 6% to $179,000.

The island of Lanai had 8 condo sales in 2011, which is four times the number sold in 2010. Lanai boasted a sale dollar volume triple 2010 numbers at over $9.6 million dollars. However, the median sales price in Lanai has also seen an 11% drop compared to last year – coming in at $1,022,700.

The island of Molokai had exactly the same number of condo sales as last year – 16. A steep 32% decrease in median sales price to $92,500 resulted in a 16% decrease in sales dollar volume of almost $2 million.

Highs and Lows

There were quite a few extremely low priced sales on Maui this year. At the bottom of the prices was a 1^st floor 1/1 leasehold unit at Hale Ono Loa on Lower Honoapiilani Road in Honokowai. It sold for only $14,000 in September, probably due to the fact the unit had high AOAO fees, and a high payment on the fee loan.

Oddly enough, there were a total of 100 condos on Maui that sold for less than $100,000 in 2011. Some were recently updated or remodeled, and a couple had some ocean views. 64 of those units were REO sales and only 10 were short sales.

On the high end of the condo sales prices, it was equally as impressive with 98 condos that sold for over $1,000,000 in 2011. They included a $2.65 million foreclosure sale at Wailea Beach Villas in Wailea for a 2,893 square foot 3/3 condo. At the high end of the sales prices was stunning 4/4 front row oceanfront unit with panoramic views at Wailea Point in Wailea that sold in August for $8,000,000.

For more information on these or any other units send an email with your request to info@aloharealtygroup.com or, visit our website at www.aloharealtygroup.com.

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Sales of single family homes on an upward swing

We could see prices follow in 2012

There were 897 single family residential sales in 2011 – an 11% increase from 2010. Even with distressed properties dragging down the market, the median prices sagged only 6%. A 6% decline is not insignificant, but it is slowing. And coupled with increasing sales an upswing is not out of the question.

Distressed properties are having an impact, both pushing the number of sales up and simultaneously keeping prices low. Distressed properties represented 45% of the homes sold and 26% of those on the MLS in 2011.

Area Statistics – Year-End 2011

Maui’s Central Area (Kahului/Wailuku) had 268 residential sales in 2011. This went up 1% from 2010’s 265 sales. Sales volume totaled almost $104.3 million which was down almost 9% from the previous year. The median sales price also went down almost 13% to $374,950.

Kapalua, with 11 sales, saw an 8% decrease in 2011 compared to 2010. Despite having a median sales price decrease of almost 2% ($2,850,000), the total sales volume was about $46.9 million – up 15% from 2010.

The Napili/Kahana/Honokowai area seemed to have a good year in residential sales. 41 properties were sold in 2011 (a 71% increase), which equaled over $37.2 million – a 124% increase. The area did, however, have a 10% decrease in the median sales price ($600,000).

The west Maui area of Kaanapali did quite well in 2011 and ended the year with a 70% increase in the number of residential sales (34) compared to 2010. Kaanapali’s total residential sales volume saw an increase of 83% - bringing in $46.2 million in 2011. The median sales price increased 18% to $1,150,000 over the past year.

Lahaina, including Launiupoko, had 40 single family home sales in 2011 – about 9% less than 2010’s numbers. Total sales volume in 2011 was $38.3 million – down 3% from 2010. The median sales price for single family homes in Lahaina went up approximately 5% to $547,050.

South of Lahaina in Olowalu, there were 2 sales in 2011 which totaled $2.6 million. There were no sales there in 2010.

On Maui’s north shore, in the Spreckelsville/ Paia/ Kuau area, they saw an increase in the number of single family home sales – 26 sales for an increase of 24%. Sales volume also increased substantially by 144% ($31.4 million total in sales volume). The median sales price in the area also increased 9% to $597,000.

Heading upcountry, Pukalani broke even with 2010 at 59 sales. A 2% decrease in median sales price ($413,200) resulted in a decrease of sales volume totals, coming in very slightly below last year’s total with $28 million.

It was a pretty good year in Haiku, as they had 58 single family home sales in 2011 (increase of 32% from 2010). Total sales volume was $43 million (up 58% from 2010), and the median sales price went up 23% to $637,000.

Also upcountry, the Makawao/ Olinda/ Haliimaile area saw an increase in the number of single family home sales. There were 49 sales in 2011 – up 20% from 2010. The sales volume in the area was $20.3 million, which was a decrease of 12% from last year. The median sales price also decreased – 16% to $330,000.

Kula/ Ulupalakua/ Kanaio had 53 residential home sales in 2011 – up 13% from 2010. Sales volume went up 12% to $43.9 million and the median sales price went up 3% to $629,000.

Hana saw a 60% decrease in the number of single family homes sold in 2011 – just 2 sales compared to 5 in 2010. The sales volume ($467,550) was 88% less than last year. The median sales price also decreased 69% to $233,775.

On Maui’s south side, Maui Meadows had a 35% increase of residential sales in 2011 with 23 sales. $21 million in sales volume exceeded last year’s amount by 22%. The median sales price was down 9% to $770,000.

In Kihei, there was a very slight increase in single family homes for 2011. 169 home sales represented just a 0.6% increase. Sales volume rose 13% to $112 million for the area. Like many areas on Maui, the median sales price fell – 6% to $410,000.

Predictably, Wailea/ Makena area homes did well in 2011. Selling 29 homes (just one more than last year) brought the area over $120.3 million in sales volume - a 13% increase from 2010. The median sales price ($2.1 million) was the best on the island at a 24% increase.

Both the islands of Lanai and Molokai saw some increased single family residence sales in 2011. Lanai had 13 sales – an increase of 160%; total sales volume of $4.4 million – an increase of 56%; and a very slight increase in median sale price to $270,000. Molokai had 20 sales – an increase of 122%; total sales volume of $6.4 million – an increase of 22%; but a 35% decrease in median sales price to $294,500.

Highs & Lows

The lowest selling price for a home in 2011 was on Molokai. It was a 4 bedroom, 1 bathroom home for $54,000. It was bank owned, an REO that needed quite a bit of work.

The other end of the spectrum is a breath taking 4 bedroom, 5.5 bathroom panoramic oceanfront estate in Makena. This incredible, 3,060 square foot estate sold for $27 million. This was the highest single family residence sale in Maui’s history and made national headlines. The home was purchased in July by Pay-Pal cofounder, Peter Thiel.

Potts’ Picks

The Potts’ Picks feature will return next month.

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

Be sure to visit us online at Aloha Realty Group.com

A hui ho!

Get more information and details

To get more information on property and trends, you can search all properties listed for sale at www.AlohaRealtyGroup.com. If you can’t find what you’re looking for there, send us an email to 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.

About The Aloha Potts Team

Aloha Potts is a team comprised of L. Lee Potts, MBA, REALTOR® R(B) and Barbara S. Potts, MBA, REALTOR® R(B) and former California CPA. We are business people, and we treat our clients with the same care and service attitude that we would like to receive when we do business. We are in business for pleasure and profit. We expect that most of our clients will enjoy the property they own in Maui (pleasure), and it would be nice for everyone if your property performs well for you (profit). Real estate can be highly speculative, and profits are never guaranteed. So if you are buying property in Maui, it’s a good idea to surround yourself with a professional team.

Lee Potts is the former President of an international software company and former Marketing VP of a publicly traded franchise organization. Lee and Barbara are both licensed under Aloha Realty Group.

Barbara Potts was a CPA with Ernst and Young before joining Apple Computer back when both Steve’s were there (Jobs and Woz). She was also Director of Strategic Marketing for Grass Valley Group, a division of Tektronix, and a business broker in California.