September slipped by quickly on Maui. It moved so fast, I was already five days into October before I even had the chance to look into the September 2011 Maui Real Estate Statistics. Of course when I think of September, I think of the classic Earth Wind and Fire song. Being that this song has been in my head as I wrote this post, I thought it was only appropriate to share the love.
Getting back on target, September is an interesting month for real estate on Maui in that it marks a transition between our second busy season and our quietest season. After labor day, we tend to see our visitor numbers diminish and in turn our real estate transactions decrease. Activity stays depressed until our visitor numbers begin to climb again closer to holiday season. That being said, the September stats are more of a reflection of activity in our summer sales season. Most of these sales are based on contracts penned in June, July and August. The numbers below are the unofficial stats that I came up with by reviewing reported sales in the local Realtor database. These numbers are followed by a few thoughts on the significance of the numbers and some additional items of interest that I found while searching through the database.
During the month of September, Maui Realtors Reported 77 home sales with a median price of $415,000. By comparison, the September 2010 numbers were 64 home sales with a median of $440,000. This represents a 20% increase in volume and approximately a 6% decrease in median prices.
The condo numbers for September 2011 are 76 sales with a median price of $310,000. The totals during September 2010 were 99 condos sold at a median of $302,000. This is a 23% decrease in condos sold and a 3% increase in medians when comparing the two Septembers.
Land sales continued to be anemic in September with 11 properties sold at a median of $285,000. These numbers bested the September of 2010 sales by a small margin when there were only 7 properties sold also with a median price of $285,000. This translates to a 57% increase in volume.
As their influence has remained significant in our real estate market, we have continued to track the sales volume of Bank Owned (REO) and Short Sale transactions. There were a total of 46 REO sales and 14 short sales that closed in September. Of the 77 homes sold, 35 were REOs or Short Sales. That is 45% of the home sales volume. For condos, there were 23 REOs or short sales. That is just under 30% of the total condo volume. Land sales included two bank owned properties last month.
The stand out number of the stats above is the dip in condo sales when compared to the same time last year. The 2010 numbers have outperformed the 2011 numbers for condo sales two other months this year. For those two months, the better 2010 sales numbers can be attributed to a boost provided by long term new developer contracts. I have dubbed this phenomenon the Honua Kai Effect. Honua Kai is a new West Maui Condo complex that was originally offered for sale pre-construction in 2005-2006. Over the last couple of years, we have seen a large number of those long term contracts close as construction was completed at the complex.
When I looked at the September 2010 numbers, Honua Kai sales were not a big impact. They only accounted for three of the 2010 sales. So what caused the dip? One guess I have is that we are seeing some fallout from a reduction in inventory. There was a big supply of short sale and bank owned inventory at the lower ends of the market last year. This year, the inventory has shrunk. Last September, there were 35 REO or Short sale closes closes vs only 23 this year. This will be an interesting thing to watch over the coming months. It may turn out that this month was just an anomaly.
The home sale activity was the opposite of the condo market with a healthy 20% increase in sales volume. The 2011 home sales volume has now bested the 2010 sales volume for 6 out of 9 months. While not the sole driver of the increased market activity, the ultra luxury market continued its strong run of activity with seven closes over $2,000,000. That includes a $13,800,000 sale on Keawakapu Beach in Wailea and a $7,750,000 sale for a 1.3 acre estate in Makena.
The land market this September was better than last September, but sales volumes are still really low when compared to activity back in the boom years. Limited financing options, limited spec home demand and strong opportunities in the home market have all been factors in the slower market activity. There is still at least a few years of inventory available. I would surmise that this will be the last segment of the Maui market to recover.
The big picture remains the same for buyers and sellers of Maui Real Estate. Buyers are finding good values, but certain market segments are proving to be surprisingly competitive. Limited inventory is the big driver in these competitive segments and multiple offer situations are common for quality properties. In order to prepare yourself for the competition, buyers should talk with a mortgage professional and get pre-approved before they start their search. That can be a big help if you need to act quickly to submit an offer on a home. Sellers need to price their homes well to improve their odds of a successful sale. Contrary to some reports, I have yet to see any clear evidence of price increases. There are still quite a few sellers who are priced above the market and their showing activity is suffering as a result. If sellers have the means, they should also consider home inspections prior to listing. This helps limit potential surprises when you go under contract. If you have any questions on this month’s stats or need assistance buying or sell Maui Real Estate, Contact the Maui Real Estate Team. We look forward to being of service.