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Kathy Becklin

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Options in Paradise: Home or Condo?

12-01-08
Kathy Becklin
I haven't met a single visitor to Maui who doesn't dream of owning a home here at some point. Who can blame them? Our lovely beaches, lush flora, cool trade winds and abundant sunshine are enough to make anyone want a vacation to last forever. There are ways this dream can become a reality. This is the first in an ongoing series called Options in Paradise, where I will offer things to consider when buying your island home in small, digestible segments to ponder over a mai tai. Condominium vs. Single Family Residence
  • Condominium
    • Pros:
      • Don't have to do yardwork, as much of the maintenance handled.
      • Some condos have as much living space as a single family home.
      • Amenities such as pools, workout rooms, etc.
      • Locations are often close to shopping areas and beaches.
    • Cons:
      • Close proximity to neighbors.
      • Maintenance costs.
      • Rules and regulations
      • Often limited outdoor living space.
      • Some older condo's have special assessment costs to cover items such as roof replacement and elevator upgrades.
  • Single Family Residence
    • Pros:
      • More flexibility in features.
      • Ability to make change and upgrades easily.
      • More outdoor living space.
      • In Hawaii, many residential homes have attached or detached Ohana units (extra space for guests, offices, rental units, etc.)
    • Cons:
      • Responsible all maintenance and yardwork.
Future related blogs will compare short-term (vacation) rentals to long-term condominium living, discuss timeshares, fractional ownership and compare fee-simple to leasehold properties. Don't let the beauty of Hawaii allure you without having the knowledge to make great decisions.
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If the market is appreciating by 8%, why are my condo prices plummeting?

04-20-08
Kathy Becklin

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:

  1. Low end condominiums
  2. Middle condominiums
  3. Starter homes
  4. High-end condos, 2nd homes
  5. 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!

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