Aloha Potts- Maui Real Estate Advisor

Maui Real Estate Advisor

Presented by Aloha Realty Group

Issue 41, July 2010

May 2010

May	Sales	Sales Prior Month	% Change	Sales Prior Year	% Change
Homes	81	88	-8%	60	35%
Condos	104	158	-34%	52	100%
Land	16	15	7%	8	100%

May	Median Price	Median Prior Month	% Change	Median Prior Year	% Change
Homes	442,000	477,500	-7%	482,500	-8%
Condos	412,500	455,000	-9%	399,000	3%
Land	547,500	540,000	1%	665,000	-18%

May	Current Inventory	Inventory Last Month	% change	Months of available inventory
Homes	840	875	-4%	10.37
Condos	1,252	1,282	-2%	12.04

June 2010

June	Sales	Sales Prior Month	% Change	Sales Prior Year	% Change
Homes	77	81	-5%	65	18%
Condos	105	104	1%	55	91%
Land	9	16	-44%	8	13%

June	Median Price	Median Prior Month	% Change	Median Prior Year	% Change
Homes	499,000	442,000	13%	495,000	1%
Condos	430,000	412,500	4%	469,000	-8%
Land	360,000	547,500	-34%	441,000	-18%

June	Current Inventory	Inventory Last Month	% change	Months of available inventory
Homes	855	840	2%	11.10
Condos	1,253	1,252	0%	11.93

The 2010 Mid-way report

Property sales are increasing, but prices are not

Both condo and single family home sales are up significantly compared to 2009. Prices in both sectors remain at all time lows or at least the lowest numbers we’ve seen in quite a while.

Short sales and REO’s are the tail wagging the dog, not to say that any one property is a dog. They account for only about 14% of our total listings on Maui. However, they account for a disproportionate 25% - 30% of sales.

Why? Easy - people are looking for bargains, and everyone is afraid of paying too much. So, the distressed properties continue to hold the rest of the market down. And, with a back log of properties headed for foreclosure, there is no sign that prices will turn any time soon.

For sellers it isn’t a pretty picture. The GOOD NEWS is that for folks who really need or want to sell, there are buyers. So, if you are considering selling you should do one of 2 things:

1. Don’t sell and wait for the market to improve ,- or if you have to sell

2. Price it right and get it over with.

If you know anyone who is having a hard time making their mortgage payments and don’t know what to do, encourage them to find out what their options are at http://www.alohapottshelpsmauihomeowners.com/.

Lucky we live Maui, aloha!

Maui condo sales up, prices down

Are we at the “bottom” or still sliding?

Developer sales that are closing on some old contracts are distorting the condo sales picture in Maui, but not as much as one might think.

Even without the Honua Kai closings the market is definitely recovering volume wise compared to last year. Individual condo sales are up 64% compared to 2009.

Prices are another story. The stats show that condo prices are down some 34% from $630,000 last year to $427,750 this year. And that $427K number is being propped up by Honua Kai closings.

It would make sense that total sales should be up, if prices are down by over 30%. The next question is, “are condo prices in the Maui market headed for continued sharp declines in 2010?”

The answer is a flat NO.

While the first 6 months of ’09 maintained a high median price level, there were very few sales. And after that big $600K + median price number at the end of 6 months, sales prices tanked in the second 6 months of ’09. They only topped $400,000 twice in the final 6 months of the year and were in the $300’s the other months, dipping to as low as $307,500 in September of ’09.

2010 has not seen a single month in the $300’s and, in March, the median got all the way to $499,000.

So while it still may be too early to tell, it looks like the “bottom” probably came and went at the end of ’09.

However, we certainly don’t see prices spiking up, and with almost a year’s worth of inventory on the market, more short sales and foreclosures on the horizon and a current average selling time of 187 days, it is and will be a “buyer’s market” for quite some time.

Highs and Lows

Last month’s low price for a condo on Maui was a Hale Ono Loa in Honokowai that sold for $20,000. This month a Hale Ono Loa sold for $18,000. It is leasehold, but you can buy the fee for only $234,960. There’s always a catch. It is oceanfront with an ocean view, so that’s still a good price.

The other end of the spectrum was at the other end of the island in Wailea. At Hoolei, a 3 bedroom, 3.5 bath ocean view condo, across the street from the ocean, was listed for $1.8 M and sold for $1.75M cash.

Area Highlights

Despite the 22 Honua Kai sales posted in Kaanapali, Kihei is still king when comes to the number of sales for the month.

Kihei had 34 sales, but the median price was a modest $260,250. Kihei and Wailea combined for 43 sales. Wailea’s median was $1.7 million.

Kihei condo sales for the first 6 months, 203 condos sold, are more than double the first 6 months of 2009. The median selling price of $276K is off by 11%.

Wailea is a similar story, but it sure looks different. The number of condos sold the first 6 months of 2010, 64, is more than double last year.

The median selling price of $975,000 is down by 47% compared to the same period last year. However, the average selling price is actually UP by 4%, indicating some very high end sales, $10 million plus, which pulled the average up compared to the truer picture presented by the median.

Sales for the first half of the year in Wailea in ’09 were $50,419,500. This year’s first half came in at $111,851,764.

Condo sales in Kaanapali have been driven by Honua Kai closings in 2009 and 2010. Last year they were closing the Hoku Lani building. This year they are closing the Konea building, or not. Either way, if we were to pull out the Honua Kai closings, Kaanapali condo sales would look pretty anemic. (Numbers?)

Sales in the Napili/Kahana/Honokowai district, as it is reported in the MLS, are up 125% this year. The median price of $295,000 is off 21% from last year.

Potts’ Picks

There are currently 35 condos on Maui priced at under $100,000. Some even claim ocean views, which in this case seems to mean if you stand in just the right spot and lean a certain way you can see some water. Most are leasehold, short sales or in some other way distressed. But for a first time home buyer or investor, there might be some gems in the group.

Some of the developers, not Honua Kai, are offering some amazing values. Opukea, a D. R. Horton development in Lahaina, is one. Unit D 302 is a 3 bedroom, 2 bath condo of 1,269 square feet. Near shopping, these condos have covered parking, a pool, workout room and 3.875% fixed rate financing with no points. This one is 342642 in the MLS on AlohaRealtyGroup.com.

And if you want something that looks and feels new, is vacation rentable and has one of the most spectacular views you’ve ever seen, check out Royal Kahana 911. At $999,000 this 1,287 penthouse oceanfront unit is a best buy. It is 336367 in the MLS.

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.

Maui’s homes sales bounce back to near “normal” levels

Prices remain at historic lows as the buyer’s market continues

In January of 2009, only 31 homes were sold in Maui. The following month only 34 homes were sold. Since then, sales of single family homes have risen, approaching near “normal” sales volume.

So far, sales of single family homes are up 43% on Maui.

Even with these gains selling prices are still at historic lows, and it is still a buyers market. In April of 2009, median prices dipped below $500,000 and have stayed in that mid to high $400K range ever since, hitting $499,000 last month.

The 3 factors I’ve cited previously indicate this stable trend should continue.

1. The new home buyer credit is still having an impact on closings. While it is no longer available to new buyers, those who were under contract at the end of April now have until the end of September to close.

2. Many builders are trying to work their way through inventory by offering aggressive pricing, in-house financing and other new home incentives to attract buyers. But, as their inventories decline so might their deal sweeteners.

3. Shadow inventory – There are a lot of homes still going into foreclosure and a lot of foreclosed homes that aren’t back on the market yet.

Area Highlights

While it’s no surprise that the central area of Wailuku/Kahului accounted for the most sales, Maui’s Upcountry showed surprising growth.

Upcountry has been a favorite retreat for residents seeking to escape the heat of Lahaina and Kihei. It also attracts people who want a little more space for “country living” and commuters who work in Maui’s central district. But Upcountry sales ground to a halt over the last couple of years as prices shot up with demand.

This year Kula, Pukalani and Makawao have had sales increases of 42%, 21% and 77% respectively. All have median selling prices of under $500,000.

In Kihei and Wailea, home sales are up 53% and 100% respectively. Wailea even had a 2% bump in median selling price.

Kihei, however, is showing an 11% price decline with a median selling price of $450,000, down from $505,000 for the same period last year.

The other major area of interest is Maui’s West Side, Lahaina, Kaanapali, Kahana, Napili and Kapalua. The growth percentage in each of those communities is stunning. But when you consider that they were averaging about only 1 sale per month last year, it’s not nearly as impressive.

Highs & Lows

The lowest priced house selling in Maui in June was a little REO (bank owned) house in Wailuku; little being the operative word. This is a 2 bedroom, 1 bath house of 672 square feet. It is cute and clean. It was listed for $189,900 and sold for $203,000, $13,100 OVER asking price.

The house fetching the most money was in Kapalua’s Plantation Estates. It was a 5 bedroom, 5.5 bath home, including an ohana. It was listed for $8.25 million, but went for only $7.125M.

Potts’ Picks

This 3 bedroom, 3.5 house with an ohana, is looking like a pretty good buy. It has a bit of an ocean view, some very nice finishes and a decent yard. They were originally asking $939,000, but the price has been lowered to $798,000 and who knows what one can buy it for. It is 339309 in the MLS.

The other house I like a lot has great space. In fact 3,236 square feet with 4 bedrooms and 3.5 baths. It is across the street from a beach park and some great surfing. I would like to see it priced a bit lowere, but at $1,395,000, it is worth a look, 343618 in the MLS.

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.

Distressed property

Maui takes its place among the hardest hit foreclosure markets.

The foreclosure picture in Maui isn’t changing much on a month to month basis. Each month I look at the month end totals expecting something, but they tend to look the same month after month.

What I keep expecting to see is a significant increase in the number of short sales and REO’s listed. I’m being told by people who track such things that the number of foreclosures is growing at a rapid pace.

Realty Trac, a company that watches and reports on foreclosure activity across the country, reports 889 properties headed for foreclosure. We currently have 199 short sales listed. I would expect many more people to take a proactive approach and list their properties as short sales.

Realty Trac also shows 542 bank owned properties on Maui. There are currently 77 listed for sale. As a long time Realty Trac subscriber I know they aren’t as timely as I would like when it comes to updating their data. So there may be fewer bank owned properties than they show, but that’s still a big discrepancy.

That is also an illustration of what many refer to as shadow inventory. These are properties that are owned by the banks but that the banks are just holding back from the market for any number of reasons.

Last month, 21 of the homes and condos sold were bank owned. At that rate, it should take just over 3 months to work through the 77 properties that are currently listed. You can do the math to figure out how long it could take to work through 542 properties.

From the chart below it appears that not much has changed for the last 2 months, that is if you still have the last news letter. However, REO’s as a percentage of listings did creep up to 4% from 3%. Percent wise, that is a pretty big increase. Maybe I spoke too fast.

Homes as a percent of MLS

Short sales listed Short sales sold

10% 14%

REO’S listed REO’s sold

4% 15%

Condos as a percent of MLS

Short sales listed Short sales sold

9% 13%

REO’S listed REO’s sold

3% 13%

To keep track of short sale and foreclosure trends on Maui, you might want to log into Short Sales and Foreclosures on Maui – Trouble in Paradise.

To get an up-to-date list of short sales and foreclosures, log onto Aloha Realty Group’s distressed properties page.

If you are interested in learning more about distressed properties on Maui, send me an email info@alohapotts.com and I’ll send you a list and some details.

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(S) 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.

Statistical information in this newsletter is based on actual sales information reported to the Realtors Association of Maui, Inc. While this information is deemed reliable, it is not guaranteed. This newsletter is for informational purposes only and not intended as advice for investment or any other purposes. Real estate is considered to be highly volatile, and purchasers and sellers of real estate should always seek expert outside advice before investing.