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Unofficial November 2010 Maui Real Estate Statistics

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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.


6 Responses to “Unofficial November 2010 Maui Real Estate Statistics”

  1. Continuous downward pressure on home prices will hamper the economic recovery, raise foreclosures and hurt banks abilities to lend and likely tip the economy into another recession resulting in further job losses for the country…

    AN B

  2. Erwin Schuster says:

    Picking up on the comment re: Canadian buyers.
    There would be many more were it not for the ludicrous HOA fees.
    Even though having pretty much a one-seasonal climate versus a full four seasons in Canada the cost for home owners in a Condo development are twice as much in Maui as they are in British Columbia. I’d love to find an explanation for this discrepancy.
    Regards,
    Erwin

  3. AN B & Erwin,

    Thank you for the comments / participation. I wish I knew where the economy was headed. I have truly never seen so many “experts” have such disparate opinions.

    Regarding HOA fees, I hear you loud and clear. I have a couple of thoughts on the issue, but no concrete answers. First and foremost, the HOA fees include insurance, and our insurance rates skyrocketed after active hurricane seasons up until 2005. Some of the rates that appear extremely high may also include electric. Finally, those properties that are in distress have owners who are not paying their fees. Unfortunately the remaining homeowners are often left to pick-up the slack. There is one condo complex in Kihei that has already announced a 25% HOA increase and that they will most likely need to raise them 25% per year for the next two years. This economic downturn continues to “surprise” many people due to repercussions that not many folks thought of. Lastly, Maui has a very high cost of living. We have higher wages, higher utilities and higher supply costs. It is the unfortunate off-shoot of living a long way from most consumables. When you look at all the costs, some of the HOA fees are actually a bargain.

    Overall the Hawaii economy is improving more rapidly than most economists predicted. The housing and tourism data is certainly telling us that many of the affluent buyers of second homes and investment properties in Maui are feeling better about their personal financial situations and the economy. Regarding the ladder, I hope they are correct.

    All the best,

    Billy Jalbert
    Principal Broker / Owner
    The Maui Real Estate Team, Inc.

  4. Billy,

    I have noted that just before Christmas the sales of homes slow down. People get too busy with Christmas shopping and they do not want uncertainly so hopefully it is a temporary decrease and things will pick up in new year for you.

    Thanks.

    James

  5. Pete Jalbert R(S) says:

    Aloha James,
    Fall is traditionally our slowest time of year for sales. Last year was unusual in that the home buyer tax credits spurred more activity. We tend to see our activity begin to jump right around Christmas as we see more visitors. Due to transaction times, we don’t see the jump in the statistics for a couple of months after the start of the increased activity.

    Erwin,
    To add to what Billy stated, Our seasonal pattern and environment provides its own set of costs for condo associations. We don’t have the winter costs, but the summer client means no dormant season for plantings and year round pool maintenance. Oceanfront and almost oceanfront condos have their own maintenance issues. The salt air requires pretty constant upkeep. Let us know if we can answer additional questions or be of further assistance.

  6. Lance Racoma says:

    You said: “The housing and tourism data is certainly telling us that many of the affluent buyers of second homes and investment properties in Maui are feeling better about their personal financial situations and the economy. Regarding the ladder, I hope they are correct.”

    It does seem to us that our clients who are second and vacation home owners are making moves to do their maintenance. Most of our clients are talking about how happy they are that the vacation rentals were better this year and hoping for more improvement in 2011. We’re hoping that’s correct too.

    Lance Racoma
    Owner, Eurotech Stone & Tile Restoration

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12/3/2010

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