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Unofficial August 2010 Maui Real Estate Statistics

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I have been taking some time over the last few days to poke through our MLS and get a better sense of the August 2010 Maui Real Estate Statistics. I have included the numbers I came up with below followed by some commentary and context. This post is my sneak peak at the county of Maui’s real estate sales numbers. I was slow to publish my statistics last month, but this month’s numbers are being posted before the official statistics of the local Realtor’s Association. These are preliminary numbers that may creep up a little based on sales that are reported tardily.

There were 66 homes sold in the month of August at a median price of $461,500. This compares to 53 homes sold in August of 2009 at a median of $500,000. This represents almost a 25% increase in sales volume when comparing the two Augusts.

There were 81 condos sold in August of 2010 at a median price of $310,000. This compares to 66 in the same month of 2009 at a median price of $371,250. This translates to an almost 23% increase in volume when comparing this year to the same time last year.

There were 7 land transactions in Maui County last month at a median price of $387,500. This compares to a scant 3 sales at a median of $999,990 in August of 2008. This is a 133% increase in sales volume.

Over the last couple of years we have seen a growing number of bank owned properties (REO) and short sale listings come on the market. I have been tracking short sale and REO closes as a part of our monthly unofficial statistics. We have seen these type of purchases gain an increasing share of the monthly closes throughout this year. This month’s sales included the greatest percentage of REO and Short Sale transactions to date. By my calculations, I counted 36 REO closes and 30 short sale transactions on the month. Of the 66 homes sold, 31 were bank owned or short sales. That translates to 47% of the home transactions. It was particularly striking that 22 home sales or 33% were REOs. Of the 81 condos sold, 33 were REOs or short sales. That translates to just under 41% of the transactions. Two of the seven land sales were REO listings. That calculates to almost 29% of the land transactions.

I think the REO and Short sale activity merits some additional discussion. This was a clear bump in activity in this segment. I think this is a trend that will have some staying power. Anecdotally, it appears as if we are starting to see an increase in REO listings. We have also heard second hand of a growing inventory of pending foreclosures on the island. This is going to provide continued pressure on housing prices. There were a couple of other things I noted with regards to short sales. The first being a shift in where short sale activity is occurring. We are starting to see more short sale activity at higher price points in the market with 44% of the home short sales priced over $700,000. We are also seeing an increase in short sale closes. I don’t have definitive evidence of yet, but it appears as if we may be seeing a higher success rate for short sale transactions. That would be good news for the large number of short sale transactions that are in limbo waiting for bank approval.

There were a few other things to note about this month’s statistics and the overall real estate market. The August statistics are hardly robust, but they do mark some improvement over both last year and last month. It is good to see some positive news after the dour national housing reports that were published in the last few weeks. I had to cringe a little bit at the hysterics surrounding the recent national housing numbers. While the numbers give pause, they should not have been unexpected. While the tax credits used as stimulus were successful in generating heightened activity, they also created a lag in demand after expiration. We saw that with cash for clunkers and we saw that with the first round of first time home buyer credits. I am not sure why people expected the housing market to buck that trend especially in light of continued overall economic weakness.

Maui outperformed national numbers last month and I would not be surprised if the August numbers for Maui look better than the national average. While this is a good news, I am not sure that we can pin point the reasons yet. I think there are two potential explanations. The optimistic point of view is that Maui’s market may be in better overall condition. Maui has seen improvements in the local economy driven by some resurgence in tourism. It also remains a very desirable location especially as a resort/second home community. The less optimistic view point would be that Maui typically lags behind the California market by a period of about six months. Considering that California’s market saw a second down turn this spring, there may be potential for Maui to experience that same down turn in the next couple of months. We will learn more as we progress into the fall.

While the uptick in home and condo numbers over last year and last month can be attributed in part to increased REO and Short Sale transactions, we are also continuing to see some interest in the luxury markets of Maui. There were a total of 11 condo and home sales over $1,500,000. That includes 1 home and three condos priced over $5,000,000. I would be reticent to call it a booming luxury market, but Maui remains desirable for affluent buyers seeking premier properties.

As with last month, condo sales are quite a bit lower than what we saw during the spring months of 2010. At least part of that can be attributed to the diminished effect of new development sales. Earlier this year, we saw as many as 50 closes per month in new developments based on contracts that were inked prior to the market down turn. This month, we only saw nine new development closes based on long term contracts.

Land sales continue to be anemic. While there was a healthy increase percentage wise over last year, it is important to note the small sample size. This is also just the second time this year we have seen fewer than ten land transactions in the county during one month.

Overall, my message remains unchanged for buyers and sellers. Buyers are going to continue to find opportunities on the market well below peak market prices. That being said buyers need to be prepared and pre-qualified as many of the better priced and better quality properties are generating multiple offers. Sellers should take particular note of the competition posed by the foreclosure listings on the market. Properties should be priced at or below recent comparable sales to better their chance at a sale. Proactive sellers are having inspections and surveys completed in advance to better identify potential issues that may arise if and when their home goes under contract. Contact the Maui Real Estate Team with questions or for assistance buying or selling a home. Stay tuned later this week for the official August 2010 Maui Real Estate Statistics.


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9/5/2010

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