I spent a little time today looking up the June sales figures for Maui Real Estate. In my post on the May unofficial Maui Real Real Estate Statistics, I mentioned that we might start to see a slow down in the market. A decrease in pending listings foretold of a future decrease in sales. This was evident with the June stats as we saw our slowest month of 2008.
There were 74 homes sold in the month of June at a median price of $616,000. These homes averaged 133 days on market. This compares to 112 homes sold in June of 2007 at a median price of $667,000 with an average of 186 days on market.
The condo numbers saw the biggest hit this month. There were 53 condos sold at median price of $580,000 and an average of 160 days on market. This compares to 2007 numbers of 113 condos sold at a median of $475,000. The 2007 condos averaged 152 days on market.
Vacant land closings continue to be slow. This month we had 11 closings at a median of $667,000 and an average of 186 days on market. This compares to the 2007 numbers of 26 closes at $682,000 and an average of 314 days on market.
Before I discuss these numbers, I need to give my usual disclaimer. These are not the official stats. We may see a few late reporting sales. That being said, I think these numbers are sufficiently close to actuals so that they give some indication of the market. I will post the official numbers as they become available sometime in the next week. I tend to focus on sales volume when reviewing the stats. Median prices tend to fluctuate month to month in our smaller market due to project sales. This makes it a challenge to show market price trends through medians. Days on market tends to be grossly under reported again due to new project sales. Many of these listings will show zero days.
As for the stats themselves, the condo numbers stand out. After staying within 10% of last year’s volume of sales through the first five months of the year, we saw a pretty dramatic drop of 53% between June of 2008 and June of 2007. When I see this type of change, I need to do a little digging to get behind the numbers. Were the 2007 numbers inflated due to new project sales? Were 2008 numbers lower due to a lack of new project closes? Taking out new project sales, the gap between 2007 and 2008 closes a little. We saw 24 new projects close in 2007 vs. 7 for new project sales in June of 2008. That still leaves us at a 48% decrease in volume this year.
What caused the big drop? It is tough to say definitively, but I imagine we might be able to attribute some of change to fallout from the airlines. The loss of ATA and Aloha Airlines has had an impact on the number of visitors on the island. Both carriers closed shop right around the beginning of April. Considering that Maui real estate transactions generally take 45-60 days, it is not surprising we saw some fall out. We are also seeing some pressure on visitor numbers due to airline ticket prices. The decrease in visitors to the island means fewer potential vacation rental condo buyers. The continued credit crunch and overall weakening economic forecast are also likely to be dragging our numbers down.
The home market saw a little greater dip in volume than what we had seen thus far for 2008. According to official RAM stats, sales volume had decreased 26% through May. The June numbers appear to be off roughly 34% from last Junes’s numbers. I figured it might be worth taking a look at new project sales for homes as well. Twenty four of the June 2008 sales were associated with new projects while 39 home sales were new project related in June of 2007. When you subtract the numbers for new project sales, the delta between 2007 and 2008 closes a little. That being said, there is a difference between new project sales in condos and new project sales in homes. Many of the condo sales are coming from contracts that were written a couple of years ago. That makes me a little more likely to discount new project condo sales as a current market indicator. I have noticed that with some of the more recent home developments, pre-construction sales have been more limited. Many of the new homes sales are based on contracts written in the last couple of months. These contracts have also been pretty incentive laden with home builders offering better financing and rebates.
There is not much new to discuss on the land market. This segment is following market trends that we have seen through the first half of 2008 and the latter half of 2007 for that matter. This is one area where I thought the days on market stat was of interest. We saw some really high days on market numbers in 2007 as seller’s slowly adjusted to the changing prices. It seems like we are seeing more land sellers entering the market priced to sell. While the numbers have been small, there have been some well priced land deals that have sold quickly.
What does this mean for buyers and sellers? It is pretty clear that we are in a buyer’s market. We are seeing price reductions through all but the most exclusive properties on the market. The condo market in particular is seeing some solid price reductions with a few condos seeing closes at prices that had not been seen since 2005 and even 2004. So is this a good time to buy? If you can afford Maui Real Estate now, the current buyer’s market may offer a good time to look. On the other side of the fence, seller’s will need to enter the market at or below recent comparable sales to maximize their chance of selling. Based on continued decreases in the number of pending sales, it looks like current market trends are apt to continue. We will continue to provide updates on the Maui Real Estate market on the blog.