Distressed property on Maui
Yes, we do have short sales and foreclosures in Maui
A lot of people are coming to Maui intent on getting killer deals. They've heard the stories about some of the California or Florida markets and the deals in Vegas and Phoenix. When I have to inform them that we are not experiencing that same kind of melt down on Maui, some people simply don't believe me.
That said, we do have foreclosure auctions which I attend regularly and we have short sales. The numbers are climbing, and I expect they will continue to climb well into 2009.
This time, I'm not using a crystal ball or my powers of deduction to predict the future. I have some inside information.
At a recent auction I struck up a conversation with a fellow who turned out to be a process server. He's the guy that knocks on the door and tells you your home is going to be auctioned off.
He told me he is handling just 3 banks and he is serving 30 notices per week. That struck me as a large number so I asked how that compared to last summer, June or July.
He said he is serving triple the number he was doing last summer and the number is going up.
If you are interested in learning more about distressed properties on Maui, send me an email lee@alohapotts.com and I'll send you a list and some details.
Lahaina Lee Potts
808-276-8776
Condo sales shrivel on Maui
And the market for sellers is worse than the numbers reveal - Buyers, are you sensing an opportunity yet?
While a 33% decline in condo sales seems rough enough, it is actually worse. The logical question is, "if sales are that slow, if demand is that low, why didn't prices come down." The answer is prices did come down?" They did, you just couldn't see it.
That's because a large number of sales in Wailea skewed the statistics. This has the effect of misleading us in 2 ways:
To adjust for the Wailea effect we developed the WAM (Wailea Adjusted Median).
This reveals that in 2007 the WAM was $495,000. In 2008 the median didn't remain static as indicated by the overall results, it actually declined to $433,166, down by 14%.
The other thing that is lost in the numbers is the appearance that condo sales are off by just 33%. While the stat is accurate, the trend paints a more woeful picture for Maui.
In the first third of the year there were 370 condo sales. In the second third of the year, after losing the airlines, there were only 254 condo sales. In the final third of the year, after the trifecta, there were just 164 condos sales on Maui. The final third of the year was 56% off the first third.
2009 Predictions and advice
We will continue to see selling prices decline in certain types of condominiums. There are bargains to be found in
Prices will hold in properties that are:
A word to Buyers
If you have ever been in the market for Maui property, now is one of the best times ever to be a buyer. There are certainly bargains to be had at certain properties. Your Realtor can root them out.
And even where prices are holding, now might be the time. Otherwise in 5 years you will walk into my open house and say, "Lee, I remember back in '09 when I could have picked up this oceanfront 2 bedroom unit for under a million dollars."
There's that rearview mirror again.
A word to Sellers
People are still buying. So if you are selling now you have to be smart about pricing.
If you are in the first group of properties I described, the ones where buyers are likely to find bargains, be strategic. Prices are declining, so pricing at the top or above what condos are selling for means you are going to continue the pride of condominium ownership on Maui. And worse, if you need to sell you will be doing what we call chasing the market down. You will be reducing the price over and over but you will always be just behind the price point at which your condo will sell. Listen to your Realtor and get ahead of the curve.
If you are an owner in the second group of condos I described and you want to sell don't get greedy or you too will continue to experience the pride of Maui condo ownership. Sooner or later people will pay for quality, but in this market they are deathly afraid of overpaying. Price your condo fairly, in line with the market and look for offers. If you are not getting showings or offers in a few weeks, consider a price adjustment.
Complexes to watch in 2009
Kaanapali Shores - If you are an investor, Kaanapali Shores continues to deliver high occupancy rates. And with the mandated Resort Quest renovations some disgruntled owners are wanting out and we are seeing some bargains.
Honua Kai - The first of the 2 towers is finished, and buyers are closing on their units. However, some of the closings are being delayed as buyers scramble to find financing in this post-subprime era. The developer may get some of these pre-sold units back.
Kapalua - Occupancy is down and pressure to renovate is heavier than ever. Some of the old timers are mad as hell and they're not going to take it anymore. Who can blame them? Big changes create big opportunities and Kapalua is a bargain right now.
Hoolei - This complex is new and had several closings last year. A lot of buyers wanted to get out of the deal but couldn't. Look for bargains in here from frustrated owners.
Opukea - This is a new complex still being sold by the developer. Developers need cash flow, so watch for bargains and incentives at this complex.
To read the full market report of the Maui Real Estate Advisor 2008 wrap up go to www.MauiRealEstateAdvisor.tv. For more information send an email with your request to lee@alohapotts.com or, visit our website at www.alohapotts.com .
Year End Wrap Up 2008
2008 Sales Sales 2007 % Change
Homes 907 1,142 -21%
Condos 788 1,179 -33%
Land 97 226 -57%
2008 Median Price Median 2007 % Change
Homes $577,867 $630,000 -8%
Condos $549,500 $550,000 0%
Land $700,000 $562,000 25%
2008 Average Price Average 2007 % Change
Homes 831,424 $919,942 -10%
Condos 921,063 $816,867 13%
Land 966,776 $841,091 15%
We are happy to see 2008 in the rearview mirror
But will 2009 be the Year of the Bold Buyer?
As usual, the stats aren't telling the truth. It is a fact that sales are down in all categories significantly. It is also a fact that inventories are up. Ergo, prices should be down.
Overall, we see the median selling prices of single family homes was down by 8%. But what is not evident is the impact of affordable homes sales. You'll see that the median is not down as much as indicated.
We see the median for condos didn't change in 2008, indicating stable pricing. Wrong again. We'll show you how that number is skewed, and what we really have to look at for comparison is the WAM (Wailea Adjusted Median).
At the beginning of 2008 real estate sales seemed pretty stable in all categories and held through the first quarter. In April, however, we hit the beginning of what would be an economic trifecta for Hawaii.
• In April we lost 2 airlines, ATA and Aloha. Fewer flights meant fewer visitors. Less competition led to increased airfares which again resulted in fewer visitors and real estate buyers.
• By July, the price of oil was over $140 a barrel, once again impacting the price of air travel and many other things. Would-be tourists and buyers opted to do something closer to home.
• In October, as you started to get some relief on the price for filling your tank, the economic markets tanked and would-be buyers decided it was a good time to hang on to any cash they had left and just wait and see.
Welcome 2009! With more inventory in all categories, some of the lowest interest rates ever and some prices dropping back to 2004 levels...
It's a great time to buy real estate in Maui.
Get the full story at www.MauiRealEstateAdvisor.tv or email lee@alohapotts.com
This is the November report on home sales on Maui from the Maui Real Estate Advisor. You can read the entire report on sales for homes, condos and land on Maui at MauiRealEstateAdvisor.tv.
Maui home sales still slow
The true picture shows sales even slower than the numbers indicate
Home sales continued their up and down trend in November. There were only 64 sales, most in the central area of Kahului/Wailuku. 22 of those were in the "affordable" category.
If we pull out the affordables, the median price jumps from $475,000 to $609,000. Still median single family home prices trended steadily down since August.
Area Sales
The Central area of Kahului/Wailuku accounted for 60% of all sales last month.
Once you get away from the affordable sales in the central area, the rest of the sales picture island wide is bleak for sellers.
On the west side there were only 2 sales for the month: one in Kaanapali for $2.2 million and one in Lahaina for $1.6 million.
There were 4 sales in Kihei and zero (0) in Wailea.
Potts' Picks
There are a number of short sales on nice 3 and 4 bedroom homes in Kihei listed for under $500,000. One is this 5 bedroom, 3 bath home priced at $500,000. It is MLS 333711.
If you would like a white paper on what exactly a short sale is, email me and ask for the "short sale paper." If you would like a list of distressed properties, email me and request "Maui distressed property list."
This home on the Kaanapali hillside has been listed for a while, but they've had some price reductions and are now below $1,000,000 at $995,000. 4 bedrooms, 2.5 baths, has room for a pool and has decent ocean views from upstairs. It is MLS #324222.
I love this next house. I used to run by it almost everyday when I was training for the Maui Marathon. The location, across the street from the beach on Lower Road, the style, everything. It's priced at $2.8 million. That's not bad in this Napili neighborhood. MLS #335068.
For more information on these or any other listings send an email with your request to lee@alohapotts.com, or see all of the listings on Maui at http://www.alohapotts.com.
Serious sellers reveal deals
To see only 29 sales recorded in November is absolutely shocking to anyone watching the Maui condo market. That is the lowest number of sales in over 13 years. In September of 1995, 29 sales were recorded at a median price of $144,950.
The median price last month on Maui rose to $399,000 up slightly from the previous month. We haven't seen medians that low since 2004.
Some sellers are hanging tight. They have priced their units at 2006/2007 prices and are stubbornly hanging on to some delusional price point.
It is important to point out that those high listing prices do not affect the median selling price. In calculating the median selling price we only use properties that actually sold.
Over the last few months in particular, we've seen significant declines in asking prices. And we are seeing more price reductions daily.
As a result, there are some unbelievable deals on Maui condos right now.
The Highs and the Lows
Last month a 1 bedroom, 1 bath condo in Kihei sold for $149,000. This is a tiny unit at only 443 square feet...But it is fee simple and only 3 blocks from Cove Beach.
At the other end of the island and the economic spectrum, you could have picked up a 3 bedroom Coconut Grove condo on the beach in Kapalua for $4.7 million.
Potts' Picks - Best Buys
Because of what we area seeing, I'm expanding the Potts' Picks section this month.
With so much for sale on Maui, picking the best condo buy should be a challenge. It's not. The best deal on Maui is Kaanapali Shores 235 MLS #334645. This is a 2 bedroom, 2 bath unit priced at only $499,000. The last 2 sales of 2/2's were at $650,000 and $673,000.
Other picks include:
• Honua Kai 2/2 asking price $899,000, original price $975,000. This is a new complex so there are a few things you need to know before buying there. And there are some hidden deals in there as well.
• Hale Kai 1/1 oceanfront fixer priced at $439,000.
• Kapalua Bay Villas 1/1, in the Gold Program, on the ocean, $995,000.
• Three Kapalua Golf Villa 1/1's for $599,000 or less and a 2/2 for $750,000.
• A Masters 1/1.5 on the Kaanapali Hillside for $650,000.
• Opukea 2/2 with some concessions and/or terms, brand new, $399,000.
• Puamana 1/2 with owner financing for $500,000.
• Villas at Kenolio, 3/2 for $400,000.
Additionally, we are seeing short sales and foreclosures in greater numbers than we have before.
Get details on these properties and read the entire Maui Real Estate Advisor on line. For more information on these or any other listings send an email with your request to lee@alohapotts.com or, see all of the listings on Maui at www.alohapotts.com .
Lee and the Aloha Potts Team at Aloha Realty Group are experts in distressed properties including short sales and REO'S.
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