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Unofficial June 2012 Maui Real Estate Statistics

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With the Fourth of July holiday upon us, it’s time to look back on the June 2012 Maui Real Estate Statistics. June is a busy month for fun events on Maui with the Kapalua Wine and Food Festival, The Maui Film Festival and the Slack Key Guitar Festival. It also happened to be a pretty healthy month for real estate transactions. Both home and condo sales exceeded the numbers we saw during June of 2011. I will have more details on the statistics and a few thoughts on the state of the market in the numbers below. If you are a first time reader of this blog, I want to note that these are my unofficial sales numbers for Maui. They are a sneak peek so to speak before the official Maui Real Estate Statistics are released by the Realtors Association of Maui.

Table showing a comparison of Maui Real Estate Sales Volumes for June 2011 and June 2012

Maui Real Estate Sales Volumes for June 2011and June 2012

Chart comparing the sales volume for Maui Real Estate Transactions in June 2011 and June 2012

A comparison of Real Estate Sales Volumes for Maui County During June 2011 and June 2012

By my calculations, there were 86 homes sold in Maui during June of 2012 at a median price of $575,500. By comparison, the June 2011 numbers were 81 sales at a median of $429,000. That is a 6% increase in volume and a 34% increase in median price when comparing the two Junes.

I counted 121 condos sold on Maui during June of 2012 with a median price of $373,990. The June 2011 numbers were 102 sold at a median of $294,500. That translates to a roughly 19% increase in volume and a 27% increase in median price when comparing June of this year to last year.

I totaled 13 land transactions in June 2012 with a median price of $310,000. By comparison, the June 2011 land sales numbers were 14 sales at a median of $302,000. That translates to a 7% decrease in volume and around a 3% increase in median prices compared to last June.

Last month saw the purchase of 98% of the land area of the Island of Lanai by Oracle CEO Larry Ellison at an undisclosed purchase price. Needless to say, nothing comparable happened during June of 2011.

The Maui Real Estate market has seen the impact of the real estate downturn through price reductions, decreased sales volume and an increase in short sale and bank owned property (REO) transactions. There were a total of 50 REO and short sale transactions last month. Of the 86 homes sold, 25 were REO or short sales. That is roughly 29% of the sales volume. Of the 121 condos sold, 23 were REOs or short sales. That is 19% of the sales volume. Two of the thirteen land sales were bank owned.

The big news for June was the the purchase of 98% of Lanai by Oracle CEO Larry Ellison. Lanai is one of the three inhabited islands of Maui County. The island was at one time primarily owned by Dole Pineapple. In 1961 Castle and Cook bought out Dole and unveiled plans to transform the economy from an agricultural economy to a vacation / luxury resort economy.  In 1985, billionaire David Murdock acquired Castle and Cook and continued the makeover. The Four Seasons Manele Bay and the Four Seasons Lodge at Koele are the primary economic drivers for Lanai which has been hard hit by the recession. It will be interesting to see what will happen with the Lanai Real Estate market which has really struggled over the last few years. There are two segments to that market with the residential housing of Lanai City and the resort residences around Koele and Manele. My guess is that the added publicity may help boost sales volume of Lanai’s second home properties. I am not sure if it will be sufficient to generate any price increases until more is learned of Larry’s Plans. The Lanai City market will hinge more on whether the purchase will boost Lanai’s economy over the long run and provide additional buying power to the island’s residents.

The Island of Lanai as seen from Maui

The Island of Lanai as seen from Maui

As for the rest of the market, I think it is easier to say what the stats don’t mean verses what they do mean. Looking at the numbers above, we see a pretty healthy bump in median prices across the board. Is that representative of a significant increase in values? Not from what I am seeing. As reported in recent unofficial stats posts, we are seeing some modest increases in the lower ends of the condo market. The rest of the market is more murky. Some segments are clearly continuing to see price decreases. Other segments are neutral on value. While others are seeing a continued slow downward trend, with a smattering of outlier sales that may be above recent comparable sales.

Does this month’s increase in condo and home sales figures serve as a harbinger of future increases in market activity? I think that is a stretch. We have seen a fair amount of month to month to variability. We have also seen a steady drop in the number of properties that are pending over the last couple of months. That would suggest fewer rather than more closes for the rest of the summer.

If there is one dynamic that is having an increased impact on the market, it is a lack of inventory. It has been surmised that the decrease in inventory might lead to an increase in the stability of prices and/or price increases. I think that is part of what we are seeing on the low end of the condo pricing spectrum. As you go up in price range, we aren’t seeing the price increases although it seems to be helping to stabilize prices. At this point, I would suggest that the reduced inventory is having a bigger impact on sales volume. Limited inventory is frustrating some buyers. Buyers are waiting for the right opportunities that come on the market. They aren’t just snapping up anything that goes on the market or reaching on overpriced inventory. In order for sales to increase, we are going to need a broader pool of well priced inventory to meet buyer demand.

The question on everyone’s minds is when and if we may see an influx of new listings. The bank owned, shadow inventory has long been discussed, but yet to be seen. Will we see it this summer? There are a couple of factors that suggest that some of these bank owned properties might come out of the shadows and on to the market. It is thought that the banks will release more inventory this summer now that they have settled on the robosigning issues. Locally, the foreclosure moratorium associated with ACT 48 is also sun setting. Perhaps, one or both may help bolster the number of properties on the market and satisfy some of the pent-up demand.

What does this all mean for buyers and sellers? Buyers can find good opportunities, but patience and preparedness are paramount. If you require financing, get pre-approved prior to your search. That helps you establish a budget that will keep you focused on properties within your means. Even better, it puts you in a position to submit an offer quickly when the right opportunity does come on the market. Sellers reading the paragraphs above might be inclined to think that the market has shifted into their favor. I can’t say that is necessarily the case. Sellers still need to be mindful of comparable sales when determining their go to market prices. If they have the means, sellers may also want to hire home inspectors prior to listing to help identify deal breakers that could scare off contracted buyers. This market now more than ever requires expert real estate consultation. Contact The Maui Real Estate Team for prompt, professional and expert service if you are considering buying or selling Maui Real Estate.

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7/5/2012

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