February came and went in the blink of an eye. Wasn’t Valentines day just yesterday? It seemed like a busy month for the Maui Real Estate Team and the market in general. That being said, I want to provide more than just anecdotal evidence of market activity. That’s why I take the time to create our monthly unofficial Maui Real Estate statistics. This is a sneak peek at last month’s sales volumes and median prices before the Realtors Association of Maui releases their official sales numbers. In addition to the median prices and sales totals, I wanted to highlight a few other numbers that caught our eye while I was compiling the statistics. I also wanted to give my thoughts on the market and what buyers and sellers entering the market might expect. Without further ado, here are this month’s statistics.
By my count, there were 64 home sales on island in February with a median sales price of $550,000. By comparison, there were 79 sales during February 2012 with a median sales price of $492,500. That means a 19% drop in activity compared to last year with a twelve percent increase in median prices.
I counted 100 condo sales in February of 2013 with a median price of $364,950. By comparison, there were 83 condos sold last February with a median price of $287,000. That calculates to a 20% increase in activity over 2012 with a 27% increase in median prices.
There were 12 land transactions reported last month with a median sales price of $575,000. The February 2012 numbers were 12 sales with a median price of $575,000.
Here are a few other numbers that I thought were worth sharing from when I was compiling this month’s stats.
- The high sale for the month was $4,750,000 for a 5,018 square foot home in Wailea Golf Vistas.
- That high sale was one of four single family homes that closed for more than $2,000,000 last month. By comparison, there were five $2,000,000 home closes on island in February 2012.
- The high condo sale last month was $4,196,500 for a beachfront three bedroom at Coconut Grove in Kapalua.
- That was one of two condo sales over $1,500,000 last month. By comparison, there were no sales over $1,500,000 last February.
- There were 9 bank owned (REO) sales on island last month. There were 28 REO sales in February 2012. That is a 68% drop in bank owned sales activity. This is a continuation of a trend of diminished REO activity.
- There were 15 short sales that closed in February. The February 2012 sales numbers included 26 short sale closes. That is a 43% drop in short sale activity. Short sale activity has fluctuated over the last year with no clear decline like we have seen with REOs.
After looking at the numbers above, I wanted to start with my thoughts on the condo market. There was a huge surge in condo sales towards the end of 2012. Some of that was driven by sellers anxious to close in 2012 due to uncertainty over taxes in 2013. Last month, we had a post new year hangover for condo sales. The condo market rebounded in February with a healthy bump in activity. I would anticipate a continuation of strong sales for condos over the next couple of months as we continue our peak visitor and real estate season. The two factors most likely to constrain sales are economic uncertainty due to the sequester and reduced inventory. There is more demand than there is supply when it comes to low priced condos on Maui.
The home market did not fare as well this month compared to last year. I can’t provide a definitive reason why, but I surmise that some of it may be related to reduced inventories. Most Maui communities are seeing tight inventories particularly when it comes to price ranges below $600,000. Last year, there were 625 sales in Maui County under $600,000. There are currently only 103 properties active for sale in that range. Based on last year’s absorption rate, that is just under two month’s supply of property. Supplies get even tighter as you go down in price. I would surmise we might be seeing more sales with more supply. There is strong demand at this point.
The lack of inventory on the low end is also having an impact on median prices. Fewer lower priced transactions means a higher median sales price. Last February, 40% of the transactions were priced below $400,000. This year, that number dipped to 33% of the transaction volume. There may also be some upward movement in median pricing due to price increases. The limited supply of homes is helping to slowly bump up pricing in the lower and middle ranges of the market. The upward price pressure is greatest were supplies are most constrained. That being said, there are some barriers in place that should cool the rate of appreciation. Many financed transactions are having a tough time with appraisal if the purchase price is much above recent comparable sales.
What does this all mean for buyers and sellers? Inventory remains the driving force in the market. Buyers who are looking in areas of tight inventory can expect a highly competitive market place. If you require financing, get pre-approved for your loan. Sellers are looking for strong buyers and that will help your cause if you are bidding in a competitive situation. Sellers are finding that market conditions are slowly turning in their favor after the difficulties of the last five years. That being said, buyer behavior isn’t the same as it was during the real estate boom. Most overpriced properties are sitting. I have seen a few properties with high listing prices go under contract. That being said, they may have challenges closing. We are seeing more than a few properties fall out of escrow due to low appraisals.
Contact The Maui Real Estate Team if you are considering buying or selling property on Maui. We would welcome the opportunity for a free consultation to discuss your real estate needs.