In part I of our “unofficial” October Maui Real Estate Statistics, we looked at the sales activity for the month. For the second part of our unofficial statistics, I wanted to get a closer look at current market activity. In other words, I wanted to take a look at properties going under contract that have yet to close. I would argue we are experiencing a change in market conditions. This is particularly true with homes and condos that are priced at or below Maui County Median sales prices. This is difficult to illustrate through the October sales data alone. However, the evidence becomes a lot more compelling when you look at the volume of properties that went under contract in October.
October felt a lot busier than usual. I knew it wasn’t just our office as the number of pending properties on our Realtor database climbed throughout the month. This is typically a slow time of the year when the total number of pending properties fall. There are usually more properties selling than there are properties going into escrow. That dynamic shifts when more buyers start showing up on island in December. For the month, there were 247 properties that went under contract. Many of those are still pending while a handful of cash sales have already closed. That sounded like a good number, but I wanted to compare it to other months for frame of reference. Last October, there were 157 properties that went under contract. Based on the comparison alone, you could tell why October felt busier than usual. I went ahead and looked up the number of properties that went under contract per month for the rest of 2011 and 2012. I compared the first ten months of 2011 and 2012 in the graph below.
As you can see above, Maui had a pretty busy Winter buyer’s season. Spring and Summer sales slightly outpaced the same period in 2011. However, there is a pretty big divergence in activity between this fall and last fall. While activity dipped like usual in the fall of 2011, October proved to be the busiest month for properties going under contract for all of 2011 and 2012. Our broker Billy looked back even further and found that we haven’t seen an October this busy since 2005 back towards the peak of the market.
We actually had a pretty good number of properties come on the market in October. There were 305 new listings. By comparison, there were 302 that came on the market last October. It was also the highest number of new listings for one month since March of this year. We have already seen 78 of last month’s new listings go under contract. The new inventory may explain some of the increased activity for the month, but not all of the activity. This is where I would suggest we are seeing a shift in the market. Buyers are expanding their search and compromising more. Previously overlooked listings are getting showings and offers. We are seeing a shift in buyer mentality. It may reflect an overall increase in consumer confidence that we are seeing nation wide. A few months back, there were pockets of the market that were seeing multiple offers and bidding wars, that is beginning to spread to new geographies and price points. At this time, most of the increased activity is still occurring with properties at or below the median sales prices for homes and condos. That being said, scarcity is spreading to some parts of the market above the median. The already heightened activity we are seeing this Fall may make for some interesting dynamics when we reach our peak buying season.
What does this all mean for buyers and sellers? Buyers are going to find they are entering into a competitive market place. Price increases are starting to occur among a number of properties at or below the median sales price for a home or condo. Well priced properties in many market segments are garnering multiple offers. If you identify a property that works well for your needs, it would behoove you to strike quickly with a strong offer. If you are going to need financing to assist with your purchase, get pre-approved! Do it before you even start looking at property. In competitive situations, buyers need to put their offers in the best light possible. Being pre-approved helps. If you are a seller with equity and want or need to sell, now is a good time to go to market. While there are more buyers actively looking, well maintained homes are still better received in the market. If you have the means, take the time to address deferred maintenance. A more frenetic market place demands quality representation. Contact The Maui Real Estate Team if you are considering buying or selling Maui property. We would welcome the opportunity to discuss your real estate needs.