Billy Jalbert

I received the latest November Newsletter from Maluaka the eco-luxury development in Makena that is under construction. Tiare Lawrence is going to be a member of the ocean / beach club staff instructing member clients on surfing, canoe paddling, snorkeling, kayaking and paddle boarding.

Tiare is a rising star in the surf world, an accomplished Hula dancer and a native Mauian. Maluaka is incredibly fortunate to have such an accomplished and wonderful ambassador for their development. For those of you interested in learning more about Tiare check the following links:

http://www.freesurfmagazine.com/She-Rips/She-RipsTiare-Lawrence.html

http://web.westsurfing.com/stories/tiareLawrence.html

http://www.c4waterman.com/team/tiare-lawrence-2.html

http://www.outsidego.com/index.php?option=com_content&task=view&id=305

Maluaka is an enclave of 69 LEED Certified (Green Building) residences situated on an 11 acre oceanfront parcel in Makena surrounded by the Makena South Golf Course. Maluaka is a whole ownership, private residential development that does not allow transient (Vacation Rentals). There are six different residence plans ranging from 3,111 sf to 6,264 sf including their lanais.

Prices range from just under $4 million to $10 + million.

Congratulations Maluaka and Tiare.

Buy? Sell? Wait? I realize that some people may be too preoccupied with job losses, stock market losses or politics, but if you are even thinking about real estate these are at least a few of the questions that are probably running through your head. I'd like to share some of my thoughts with you. If you ask 10 experts you'll get at least 11 opinions. Mine is no better than anyone else's opinion, but here goes:

Should I Buy right now? Well it depends. What is the purpose of your purchase? Flipping? Absolute love? Professional real estate investment returns? If you are buying for love, of course you should buy now. It is a buyer's market on Maui. Let me repeat that. It is a buyer's market on Maui. Inventory levels in various areas on Maui are running anywhere from about 8 months (a slight buyer's market) to 66 months or more...(a raging buyer's market). If you would like to discuss inventory and absorption rates or see some statistics I would be more than happy to provide them to you.

If you want to buy on Maui because you love Maui and you have the money...Please do. Cash is king and negotiate hard. Have we reached a market bottom? Based on the inventory levels, probably not, but remember this, no one ever knows when we've reached the bottom, until after the market is already on the upswing. In addition, interest rates are fairly low now and may not remain so. So buying today at a lower interest rate may be a better deal than buying in a year at a lower price. Planning on flipping? Probably not such a good idea. Looking for investment returns / cap rates? Worth exploring. Cap Rates are rising (that means prices are coming down). The risk here is that as the economic recession hits Maui, vacancies may become a problem. Remember the old adage, a tenant paying a lower or modified rent is better than no tenant at all.

Should I sell right now? Again, it depends. If you are trading into the same market or a less expensive market for a house that suits you better, why wouldn't you. Do you need to sell? I have extremely valuable suggestions for you. Number one. PRICE YOUR PROPERTY WELL. Number two. PRICE YOUR PROPERTY WELL. Number Three. PRICE YOUR PROPERTY WELL. If you have substantial equity or not, the longer you wait, the harder it may be to sell. The cost or pricing your property incorrectly may be the difference between a sale or no sale. If you have room to take a little less than the market, you may want to consider it.

What about waiting to buy or sell? There's an old saying about paralysis by analysis. Ready, Aim, Aim, Aim...You can do that in real estate also. If you are waiting for the market to improve significantly to sell, you may have a long wait. Some times it is better to take a smaller gain, or cut your losses and redeploy your capital / assets elsewhere. On the buy side, if you find a place you love, I recommend that you pursue it aggressively. I have seen too many buyers lose properties that they really wanted in good markets or bad. Here is one potential approach. You've done all of your research. You believe that the market has 10% or so to still fall. What's to stop you from offering the price where you believe where the market will be? I once lost an overpriced property in a rising market! How? I said, the Seller will never accept an offer at the price I perceive to be fair. 6 months later when the property sold, it was recorded at $100,000 less than I thought the value was...I will never fail to act on a property that I really want again!

For a more up to date version and happier version of that story, see my blog from last night on The Maui Real Estate Blog.

OK America. Things are a bit tough on the economic front to say the least, but the good news is that visiting Hawaii (much like furniture, cars, homes etc.) is on sale. So get out of the cold, drop the doldrums and come see us in Maui!

There was a nice article in the San Francisco Chronicle today about discount vacation destinations. The top 3 spots are Hawaii, Morocco and India. Although I find the other two intriguing, I think I'd opt for Hawaii for the family. Here is a link to the article.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/24/TRQ513JJR8.DTL

The article also mentions a few sites to visit for potential deals. The Hawaii Visitors Bureau site at: www.gohawaii.com and www.beatofhawaii.com, a travel to Hawaii site written by two Kauai based travel writers. I would also suggest checking the discount carriers and Hawaiian Airlines www.hawaiianair.com.

If you would like to look at a property or two while your visiting, please don't hesitate to call me or Pete.

Aloha and a hui hou,

Billy

Living on Maui, we sell lifestyle more than anything else. I can crunch numbers with professional real estate "investors" but quite frankly the buying decisions are driven far more by emotions and the transfer of assets from use assets to enjoyment assets. Furthermore, I do not have any power to predict the bottom of any market or the future of the US / World economy. If I did, I am sure I would have already received a call from Ben, Hank or George. That's my disclaimer.

Over the last couple of months I have encountered a few interesting data points in the Maui Real Estate market.

•· I have had two prospective buyers tell me that since they couldn't find a better place to put their money, that they were interested in purchasing Maui Real Estate. One is a very seasoned financial professional. He did a lot of his own research, drew his own conclusions and purchased fairly quickly. The other prospect is still in process...

•· I've seen a few agents "pitching" a line "Tired of stock market gyrations, invest in Maui Real Estate". That is somewhat of a paraphrase, but you get the point.

•· The number of pending sales on the MLS have been fairly steady for about 60 days now.

•· Recently Pete and I are seeing an increase in website inquiries. Many of them are somewhat uninformed or wishful thinking, but the numbers seem to be trending upward without any huge increase in the search engine rankings.

My observation from above are data points but they are worth keeping an eye on to see if they represent a trend. With the Dow's retreat, I can see where the two aforementioned buyers were coming from. Obviously real estate markets have dropped just about all over the Country and Maui is no exception. However, the Dow at its peak was just over 14,000 points. Today it closed at 10,831. That is a drop of approximately 23% in less than a year, which is above the national average for real estate. The current pain and uncertainty in the Stock Market reminds me of another adage that I've heard a few times. You can't live in your stock market portfolio :-)

I continue to remind my clients to be patient, be a tough negotiator, buy for love and think long term. With that formula in mind, it's hard to go wrong.

Stay positive, enjoy life and do your job as well as you can.