I spent a little bit of time this afternoon sorting through our local Realtor database to get a better sense of last month’s real estate sales. The numbers that I provide below are what I like to call my monthly “unofficial real estate statistics”. In general, I release these numbers about a week prior to when the Realtors Association of Maui issues their official numbers. Being that Maui is a small market, I also like to provide a little commentary to accompany the statistics. Maui’s relatively small sample size can lead to fluctuations in sales volume and median sales prices that may not reflect overall market trends. Here are my unofficial November 2010 real estate statistics for Maui County.
By my count, I have 58 home sales reported for the month of November at a median sales price of $445,000. This compares to November 2009 when we saw 67 sales at a median of $465,000. This represents a 13% decrease in sales volume between this November and last November.
I tallied up 66 condos sold at a median price of $349,900 last month. This compares to 70 condos sold the previous November at a median of $399,000. This is approximately a 6% decrease in sales between this year and last year.
Land sales totaled 6 for November of 2010 at a median price of $362,500. In November of 2009, there was a comparatively strong 17 total sales at a median of $455,000. This translates to a 65 percent decrease when comparing sales numbers years to year.
Bank owned properties and Short Sales constitute a significant part of the island’s inventory of properties for sale and an even higher percentage of real estate sales. We began tracking bank owned and short sale transactions as part of our unofficial Maui statistics last year. I counted a total of 28 bank owned properties sold and 20 short sales closed in November 2010. Almost forty-five percent of all home sales were bank owned or short sale transactions last month. Thirty-three percent of the condo transactions were short sales or foreclosures. There were no land sales that were short sales or foreclosures. These numbers are fairly close to what we have been seeing over the previous few months. I wouldn’t be surprised if we see a small dip in REO sales over the next month or two as a number of Bank of America, Chase, Fannie Mae and Freddie Mac properties were temporarily pulled from the market due to the robo-signing issue. As a side note and possibly the subject of another blog post, Fannie and Freddie appear to be putting a number of the bank owned properties that were on hold back on to the market.
Delving right into the sales numbers above, the first thing that stands out is the decrease in sales volume when comparing November 2010 to November 2009. The numbers alone might raise a few eyebrows, but this is another case where context is key. November 2009 was the original expiration date for the first time home buyer tax credit. There was a surge of closes in November of 2009 as buyers tried to close before the original tax credit deadline expired. Conversely, this years numbers may be slightly lower due in part to the same tax credits. Some economists have surmised that the tax credits will cause a lag in buyer demand into the first couple of months of 2011. The thought process here is that the tax credits accelerated buyer demand moving some buyers purchase time frames up by six months or more. After the credits expired, there was a smaller pool of potential buyers. I expected that we might see this year to year dip due to the tax credits. I suspect we may see a return to more favorable year to year comparisons in January. Early 2010 saw its own dip in closes as there was a lag in demand prior to the announcement of the next round of tax cuts.
The difference in land sales between the two Novembers can partially be accounted for by five commercial new development closes in 2009. That still leaves a 50 percent drop year to year. That number is a little less dramatic when you take into account sample size. We are seeing some bigger swings in numbers month to month due to the really low volume of sales. That being said, the takeaway should be that this remains a slow land market. Tough financing and good home buying opportunities are going to continue to eat into land transaction volumes.
Looking forward, we are approaching the start of our traditional buyer’s season. It will be interesting to see how our winter season plays out. There are a couple of factors that suggest we may see an increase in buyer activity. The Canadian dollar is almost at par with the U.S. dollar. Canadian second home buyer activity typically surges under this scenario. Overall visitor numbers for this winter season are reported to be strong with island hotel and condo reservations at their third highest number historically. More visitors generally translates to more potential home buyers. On the other end of the spectrum, it appears that we will continue to see strong a influence from bank owned and short sale transactions. Those transactions have been putting downward pressure on pricing. The global economy remains an X factor. A slightly improving or steady economy bodes well for our market. Any significant dip in the world economy could have an adverse impact.
Taking into account the above, our advice to buyers and sellers remains relatively unchanged. Sellers are still going to find a competitive marketplace. While I imagine some exceptional properties may draw a premium, there is still a pretty healthy inventory for buyers to choose from in most segments of the market. REO listings will provide tough competition and force sellers to keep their eyes on comparable sales and their pencils sharp. Buyers will find good opportunities well below peak market prices, but should expect that they may find competitive bidding on some of the better values in the market place. In some instances, well priced bank owned properties are attracting ten or more offers. Buyers who require financing are strongly advised to get pre-approved prior to entering the market place. Loans are available, but the process remains challenging even for well qualified buyers. Contact us today with questions or for assistance buying or selling Maui Real Estate.