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Unofficial May Maui Real Estate Statistics

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June is already upon us. That means we are officially in to festival season on Maui. The Kapalua Wine and Food Festival gets underway today and The Maui Film Festival at Wailea is set to begin next week. It also means it is time to take a gander at the Unofficial Maui Real Estate Statistics. These are the numbers that I found by sorting through our Realtor MLS database. The Realtors Association of Maui should be releasing their own stats in the next few days. In the interim, here is a sneak peak at the numbers followed by a few thoughts on the market.

Table comparing Maui real estate sales volumes for May 2011 and May 2012

Maui Real Estate Sales Volumes

Chart comparing Maui Real Estate Sales Volumes for May 2011 and May 2012

Chart Comparing Maui Real Estate Sales Volumes

By my calculations, there were 61 homes sold in May 2012 at a median price of $382,500. Last May, Maui Realtors reported 71 homes sold at a median price of $418,000. That is a 14% drop in volume and approximately a 9% drop in median price.

Thus far, Maui Realtors have reported 112 condos sold at a median price of $334,500 for May 2012. The May 2011 numbers were 114 condos sold at a median price of $349,500. That’s less than a 2 percent drop in sales volume and around a 4% drop in median price.

The Maui land market saw 17 sales in May 2012 at a median price of $330,000. By comparison, there were 15 sales reported at a median price of $275,000 in May of 2011. That is a 13% increase in volume and a 20% increase in median price when comparing this May to last May.

The Maui Real Estate market is still seeing significant influence from bank owned sales (REO) and short sales. There were a total of 49 bank owned and short sale transactions last month. Of the 61 homes sold, 22 were REOs and shorts. That is approximately 36% of the volume. Of the 112 condos sold, 24 were REOs or shorts. That is 21% of the transaction volume. Of the 17 land transactions, three were bank owned.

While there has been a lot of discussion of a hot market on the street, this is another month where sales volume under performed compared to last year. That is now four out of five months this year where home sales have been lower than last year. This is the second month this year where condo volume has been lower.

There are two things that I think are worth addressing from the paragraph above. The first is the perception that the market is on fire vs. the reality of the numbers. I also think it is worth exploring why the market is seeing lower transaction volumes compared to last year. Is it a reflection of decreased market demand or is market supply starting to have an impact?

Why do people think the Maui Real Estate market is performing better than the numbers would indicate? I am sure there may be a few Realtors who might be guilty of hyping the market as a means to inflate buyer interest. That comes with the territory when you are working with sales professionals. People want you to know that their product is hot to heighten consumer interest. In this case, the product of Maui Realtors is the real estate market. That being said, I don’t think all of those hyping the market are doing it as a ploy to increase their sales activity. I do think there are more Realtors keeping busy this year vs. last year. How are more Realtors keeping busy when there is lower sales volume? The answer to that may lie in the distribution of sales. The one area where we have seen a healthy drop in transaction volume is among bank owned properties. There were 39% fewer bank owned transactions this May vs. last May. Bank owned listings tend to be concentrated in the hands of a smaller pool of agents. While this pool of agents has seen fewer transactions. We have seen more activity outside the REO market. That activity has been spread across a much broader pool of agents.

The question of why activity is lower is a little tougher to answer. I am not sure that I am going to provide definitive answers or much more than anecdotal evidence. With that caveat, I surmise that the decreased inventory is playing an important part in the decrease in sales volume. Inventory is as low as it has been in the last few years. Some buyers have been frustrated by the limited number of properties on the market. Last year, there was an abundant and well priced REO inventory that was drawing buyers into the market and increasing transaction volume. Due to national and local foreclosure moratoria, we have seen fewer bank owned listings through the first half of this year. While there were high volumes of lower end condo deals last year, the limited bank owned inventory has meant a healthy reduction in transaction volume. There has been a 24% decrease in volume for condo sales under $200,000 between this year and last year. Many of the properties that are on the market in this segment are attracting bidding wars as buyers vie over the limited inventory. We have even seen some price increases among the low end condo complexes as demand exceeds the current supply.

The luxury condo market is an area where we have seen an even bigger reduction in sales volume. Sales volume is off 56% when you compare the number of condos sold over $1,500,000 through the first five months of this year with the first five months of 2011. This segment has not been impacted by reduced REO inventory. In fact, this segment has been mostly devoid of bank owned properties. We have seen a small reduction in new development inventory. The successful Hoolei complex is mostly sold out. Also, most of the premier units at Honua Kai have sold. The reduction of inventory as a result may be a factor in some of the reduction in volume. It certainly doesn’t account for all of the dip in sales activity. The odd thing is that we aren’t seeing a similar reduction in the luxury home market. Sales volume this year is within a few percentage points of last year. It will be interesting to see if we see any upticks in the luxury condo market as the year progresses evening out some of the discrepancy we have seen thus far.

What does this all mean for buyers and sellers? The song remains the same from the Maui Real Estate Team. Buyers will continue to see opportunities in this market. That being said, most of the good opportunities are attracting multiple buyers. Buyers should be prepared to act quickly when good deals become available. Buyers that require financing should make sure to be pre-approved prior to looking. Having a pre-approval letter at your disposal will bolster the strength of your offer. Most Sellers will find that market conditions remain challenging. While bank owned inventory is down some, they continue to have a negative impact on home values. Sellers will need to closely monitor recent comparable sales when going to market. Overpriced homes aren’t getting a lot of love from home buyers. If a seller has the capital, efforts should be made to prepare your property for sale. Having a home inspection prior to listing is an excellent way to identify and address potential maintenance issues that could cost you money, or worse, become deal breakers while your home is under contract. In this market, you need intelligent, experienced and ethical representation when you are buying or selling. Contact The Maui Real Estate Team with questions on the statistics or for assistance buying or selling Maui properties.

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6/7/2012

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