I took some time yesterday to look through the MLS and come up with the November Maui sales numbers for Homes, Condos and Land. These are the unofficial Maui Real Estate Statistics for November based on sales that have been reported on the MLS to date. There is always the chance that we may see a few additional sales that have been slow to report on the MLS. These late entries are usually captured in the official real estate statistics which should be available through the Maui Board of Realtors later this week.
I counted 64 homes sold with a median price of $475,000 and an average of 118 days on market. This compares to November 2007 numbers of 83 homes sold, at a median of $631,900 and an average of 163 days on market.
The tally for condos was 28 sold at a median sales price of $444,500 and an average of 173 days on market. This compared to the November 2007 statistics of 86 condos sold at a median price of $640,156 and 204 days on market.
The land sales for November continue to be rather sluggish at 4 sales at a median of $507,140 and an average of 290 days on market. This compares to 2007 numbers of 16 sales at a median of $465,000 and an average of 259 days on market.
The November home sale numbers show a pretty healthy slow down from year to year. While we have seen price decreases, the difference in medians aren’t necessarily a true reflection of year to year decreases in value. A healthy portion of the decrease in median sales prices can be attributed to a shift in market activity with fewer home sales at the high end and increase in the percentage of sales occurring at the low end. Almost 1/3 of the sales this month were affordable housing closes while only two homes closed over $2,000,000. We have seen this phenomenon in the condo stats and it is becoming more pronounced in the home stats. The days on market number is artificially low with many of the affordable closes showing 0 days on market. It is also worth noting that new development sales for homes continue to constitute a solid portion of the monthly closes. National home builders like DR Horton and Towne Homes have been offering discounts, low interest rates on 30 year mortgages and closing credits as incentives to entice buyers.
The condo numbers are noteworthy for their significant decrease in volume when compared to the November 07 numbers. There was a 67% drop in volume. Part of this stems from a decrease in new development closes. After a heavy cycle of new development closes over the last couple of years, we are in a bit of a lull with only one straggler closing at Ho’olei in November. This compares to 35 new project sales in November of 2007. To be clear, a number of these 2007 projects have been completed and are now in resale mode. We should see a pretty substantial bump in January when the Honua Kai project completes its first tower and condos in this project start to close. The decrease in condo sales can’t all be pegged on an absence of new development. Condo resales have cooled considerably. This has sparked some sellers to make more significant price reductions to entice the smaller pool of potential buyers.
Land sales remain the slowest part of the market. There were only 4 parcels of land sold in the county just like in October of 2008. Also like October, one of those land sales was a commercial lot rather than a residential lot. Land owners will need to adjust pricing to attract buyers. One thing that is noteworthy is that we are seeing a pretty healthy drop in construction costs. Material costs are coming down as there is a sharp decrease in global demand for construction materials. The slow in construction island wide is also bringing labor costs down. It will be interesting to see if the decrease in construction costs entices some more buyers.
What does this all mean? As one might surmise, there are opportunities out there for buyers thanks to ample inventory, decreased competition among buyers and increasingly motivated sellers. Interest rates remain low for buyers with good credit and documented income. Sellers need to realistically assess the market and position their home accordingly to improve their odds of attracting qualified buyers. As we enter December, we are approaching our peak visitor season. This usually correlates with a bump in real estate activity. It will be interesting to see what kind of push we get towards the end of the month and early January. Any marked increase in market activity wouldn’t be really noticeable in the statistics until January at the earliest with February more likely. I will be posting the official November Maui Real Estate statistics sometime later this week or early next week. In the interim, feel free to contact us with questions or for assistance.