Category: Seller’s Tips
Maui Real Estate Blog
New SMA and Shoreline Rules
After over a decade of collaboration between the community and the county, Maui County’s Planning Commission approved updates to the Special Management Area (SMA) and Shoreline Rules. The updates bring more balance and flexibility for homeowners, while also improving coastal resilience for the environment. On March 28, the Maui Planning Commission voted 8-0 to approve significant changes to the rules.
Maui County originally established SMA and Shoreline Rules in the early 1970s to create shoreline building setbacks in sensitive coastal areas. However, the existing setback formula only considered historical erosion rates and did not factor in worsening conditions due to sea level rise.
The updated SMA and Shoreline Rules reflect many years of work from the Maui County Planning Department, the Maui Planning Commission, and community working groups. The new rules incorporate the best available science on sea level rise to bolster coastal resilience. When the new rules take effect, the public will be able to access the shoreline map on the Planning department’s website. The department will also hold public outreach to inform and train residents on the changes.
Highlights of the New Rules
- Creates categorical exemptions, allowing people to bypass submitting an SMA assessment or permit application if proposed work has minimal to no environmental impact. For example, repairs and upgrades to the interior of homes, with a valuation of less than $500,000 in any 24-month period, within the special management area including the shoreline area are allowed, unless they are seeking expansion or intensifying the use.
- Removes the mandatory requirement of certified shoreline surveys, which cost thousands of dollars, and instead leaves the decision to the discretion of the department.
- Reduces the permitting burden for state-required conversion of cesspools.
- Requires hazard mitigation plans that consider realignment of structures away from the shoreline if existing structures are exposed to coastal hazards.
The new rules are more balanced and flexible for homeowners, while incorporating the best available science on sea level rise to bolster coastal resilience. This represents the second major update since 2003, with future reassessments based on erosion rates and the best science available planned every decade.
The SMA and Shoreline areas, managed by state and county laws, are the most sensitive parts of the coastal zone. The Special Management Area is the area of the island that is close to the shoreline, generally beginning at the shoreline and extending inland to the nearest highway. The Shoreline area is the land between the shoreline and the shoreline setback line.
The updated rules provide a foundation for further progress and a step forward in balancing the needs of homeowners and protecting the environment. The Hawaii Sea Level Rise Vulnerability and Adaptation Report, a guiding document for coastal planning around the state, urges people to plan for 3.2 feet of sea level rise now and adjust the projection upward in years to come. The updated SMA and Shoreline Rules represent a significant milestone for Maui County in addressing the challenges of coastal resilience and planning for the future.
This should also of course provide additional clarity for buyers interested in purchasing oceanfront land or remodeling or expanding on an existing oceanfront home.
Interested in Oceanfront?
Maui Real Estate Blog
The Five Most Cost Effective Ways to Prepare Your Home for Sale
Preparing a home for sale can be a daunting task, but there are several cost-effective things you can do to improve the chances of selling your home quickly and at a higher price. Here are five of the most cost-effective things to prepare a home for sale:
- Declutter and Depersonalize: One of the easiest and most cost-effective things you can do to prepare your home for sale is to declutter and depersonalize. Clearing out excess furniture, personal items, and clutter will help potential buyers see the space and imagine themselves living in the home. Additionally, depersonalizing your space by removing family photos and other personal items can help buyers envision themselves living there.
- Clean and Organize: A clean and organized home is much more appealing to potential buyers. Cleaning your home, including windows, floors, and surfaces, will make it look more inviting and give buyers a better impression of the home’s upkeep. Organizing closets, cabinets, and storage areas can also help show off the home’s potential storage space.
- Make Minor Repairs: Taking care of minor repairs can also make a big difference in how potential buyers perceive the home. Fixing leaky faucets, replacing broken light fixtures or doorknobs, and touching up paint can all help make your home look well-maintained and move-in ready.
- Improve Curb Appeal: The first thing potential buyers see when they arrive at your home is the exterior, so improving curb appeal is essential. Mowing the lawn, trimming bushes, and planting flowers are all low-cost ways to enhance the appearance of your home’s exterior. Painting the front door, replacing house numbers, or adding outdoor lighting can also make a big impact.
- Stage Your Home: Staging your home can help potential buyers see the home’s full potential and visualize themselves living there. This can be as simple as rearranging furniture to improve flow or adding a few decorative touches to make the space feel more inviting. You can hire a professional stager or use online resources to get inspiration for staging your home on a budget.
By implementing these cost-effective strategies, you can increase the chances of selling your home quickly and for a higher price. This strategies can be effective in any market, but it is particularly important in 2023. The frenzy of the last couple of years subsided. The number of buyers are down and days on market are up. It is important to position your home for these different market conditions.
Thinking of Selling Your Property?
Maui Real Estate Blog
Well That Was Fun!
For most buying a home on Maui is a lifestyle choice. We aren’t a center of commerce. You don’t come here for shopping or night life. It takes a minimum of five hours to get here via plane. People buy homes on Maui for natural beauty, climate and for the general lifestyle offered. For the North Shore of Maui, the ocean and the world class water sports offered are an integral part of that lifestyle. We recently hosted a broker’s event that was a little unusual. With a couple of listings that really appeal to those who love ocean sports, Billy and Martin came up with an idea that highlighted the amazing attributes of these two respective properties.
The Maui Real Estate Team invited a group of ocean sport loving Realtors for a downwind coast run that started at our listing at 78 Aleiki Place on Kuau Point and ended at Sugar Cove Building 6 in Spreckelsville. Most of the participants used wing foils to go down the coast. We had one agent riding a stand up foil and Kai Lenny used his kite. Kai’s brother Ridge, who is an agent in our office, narrates the video below that shows highlights from the event.
The condominium home at 78 Aleiki is just steps from the Kuau Point launch. If you like to wing, windsurf, SUP, or surf. There are a couple of surf breaks accessible just off the point. Of course, it’s also a great spot for starting a downwind run to Spreckelsville, Kanaha Beach Park or Kahului Harbor. Sugar Cove is a great spot for pretty much any ocean sport you can imagine. Surf, SUP, kite, windsurf, wing, body board or body surf off this great little beach.
Needless to say, the participants said this was a lot more fun than any other real estate event they ever attended. Not only was it a good chance to highlight the two properties, it was also a good reminder to all participants on just how lucky we are to call Maui our home.
Contact The Maui Real Estate Team
If you have questions about either of these properties, give us a call at 1 800 579 1525. We would be happy to answers questions or provide additional service.
The Maui market is changing. Needless to say, we aren’t immune to the latest increases to interest rates. Days on market are getting longer with buyers fewer. While there will still be buyers seeking Maui’s amazing lifestyle, the easy days for sellers are coming to an end. In this market, sellers need top quality representation. The Maui Real Estate Team uses high quality photography, videography and creative marketing like the broker’s event highlighted here to help properties stand out. Contact The Maui Real Estate Team if you are considering listing your home. We look forward to a no obligation sit down to discuss your needs and our services.
Maui Real Estate Blog
2022/2023 Maui Property Tax Rates
Updated County Tax Rates for the New Fiscal Year and New Tax Classifications
On May 13, the Maui County Council approved new property tax rates for the upcoming fiscal year. There are a some particularly notable changes. The new rates decrease tax rates for owner occupied properties and apartments while significantly increasing rates on non owner occupied properties. Rates for the Short-Term Rental, Agricultural, Industrial and commercial classification also changed.
Another notable change for the coming fiscal year is the creation of a new long-term rental category. This is a lower tax rate category meant to incentivize more long term rentals. The county council created this classification last fall but this is the first fiscal year it will be in effect. Owners who qualify for this classification also get an exemption that reduces their assessed value by $200,000.
One last note, there was some modification to the tier system first implemented in the 2020/2021 fiscal year. For certain categories of property, this system created three different tiers of tax rates based on the assessed value of properties. The tier system was implemented for the homeowner, short-term rental and non-owner occupied classifications. The new long-term rental category is also part of the the tier system.
Previously, tier 1 was for properties assessed up to $800,000. Tier 1 is now for properties up to $1,000,000. Tier 2 was for places assessed between $800,001 to $1,500,000. The new tier 2 is $1,000,001 to $3,000,000 for owner occupied, short-term rental and long-term rental. The new tier 2 for non owner-occupied is $1,000,001 to $4,500,000. The old tier 3 was for properties assessed for more than $1,500,000. The new tier 3 is more than $3,000,000 for owner-occupied, short-term rental and long-term rental. The tier 3 for non owner occupied properties is more than $4,500,000.
2022/2023 Maui County Property Tax Rates
Here are the updated rates for this coming fiscal year. If there is any change in rates, last years rates are noted for reference. All rates shown below are per $1,000 of assessed value.
- Tier 1: up to $1,000,000 Formerly $2.41 now $2.00
- Tier 2: $1,000,001 to $3,000,000 Formerly $2.51 now $2.10
- Tier 3: more than $3,000,000 Unchanged $2.71
Non Owner Occupied
- Tier 1: up to $1,000,000 Formerly $5.45 now $5.85
- Tier 2: $1,000,001 to $4,500,000 Formerly $6.05 now $8.00
- Tier 3: more than $4,500,000 Formerly $8.00 now $12.50
- Formerly $5.55 now $3.50
Hotel and Resort
- Unchanged $11.75
- Unchanged $14.60
- Tier 1: up to $1,000,000 Formerly $11.11 now $11.85
- Tier 2: $1,000,001 to $3,000,000 Formerly $11.15 now $11.85
- Tier 3: more than $3,000,000 Formerly $11.20 now $11.85
- Tier 1: up to $1,000,000 New Class $3.00
- Tier 2: $1,000,001 to $3,000,000 New Class $5.00
- Tier 3: more than $3,000,000 New Class $8.00
- Formerly $5.94 now $5.74
- Unchanged $6.43
- Formerly $6.29 now $6.05
- Formerly $7.20 now $7.05
- Unchanged $4.50
About Maui Property Taxes
The new rates go into effect at the start of the new fiscal year on July 1st, 2022. Property taxes are due in two separate installments. The first installment is due in August 2022 with the second installment in February 2023. Owners should have received notification of their new assessed values in March of 2022.
Homeowner and Long Term Rental Exemptions
The deadline to file for the homeowner or long term rental exemptions and classifications passed. If you file by the end of 2022, you would be eligible for the exemption and tax rate for the 2023/24 fiscal year. Here is the link to the Long Term Rental Exemption and the Home Owner Exemption forms. The eligibility for the homeowner exemption can be confusing. It is worth reading the county Exemption FAQ to better understand eligibility requirements. Check out the county’s explanation for different property type classifications if there is any confusion on what category your current property or future property might fit into. Contact The Maui Real Estate Team for assistance buying or selling Maui property.
Maui Real Estate Blog
Maui Market Musings Volume X
We made it to Volume 10! Our efforts to keep you abreast of the Maui Real Estate Market in these dynamic times continue. As usual, this is something of a grab bag hitting on a variety of topics. We look at some of the recent data points and outlooks for the National Real Estate market. This post also looks at some of the latest numbers regarding inventory, price reductions and the speed at which properties go pending on Maui. Finally, we provide some thoughts for sellers as the subtle shift in market dynamics continues.
A Smattering of National Real Estate Perspectives
We tend to be data geeks at the Maui Real Estate Team. That means we consume a steady diet of information on the local and national real estate market. With change in the air in the real estate market, the tweets, articles and opinions are coming fast and furious. This is a curation of some of the recent articles and tweets we read we thought were worth sharing.
- Redfin came out with their latest look at the second home market a little over ten days ago. It’s worth reading past the headline. Demand for second homes in April is down substantially from its peak during the second half of 2020 and 2021. That said, it is still 9.8% above pre-Covid levels. When looking at articles talking about changes in the market, it is particularly helpful when Pre-Covid numbers are provided for context.
- This is an interesting tweet on a paper highlighting the role of remote work in the role of price increases. This clearly impacted the local market as higher income buyers working remotely entered the Maui market.
- New construction home sales are feeling the impact of rising interest rates across the country. Although John Burns points out in his tweet below that they are still above pre-pandemic levels. Locally, Maui has relatively limited new development occurring at this time. Hoku’ula in Hali’imaile is doing site work and taking reservations on market based housing. Anuhea at Kehalani is partially completed. Some phases are actively in construction with the next phase likely to come to market in late summer or fall. La’i Loa in Wailea is fully reserved with construction ongoing.
- Inventory is increasing nationally. The 8% increase this week is substantial, but not unprecedented. Mike Simonsen’s whole thread is worth a read if you are on Twitter.
- As dynamics in the market shift, the tendency is to look at past markets to find analogues to the current market. Bill McBride from the Calculated Risk Blog argues that we shouldn’t be looking at the last real estate bust for comparisons. He makes a pretty compelling case that the late 70s and early 80s is a more relevant comparison to the current market. Baby Boomer demand then is similar to Millennial demand now. The Federal Reserve found itself in a similar position due to inflationary pressure. While mortgage rates now are still well below rates from that point in time, the year over year change in rates is similar. Will we see similar pricing dynamics?
- I wanted to include this last tweet from one of my favorite real estate follows on twitter to wrap this section up. It points to one of the values of keeping an eye on statistics. I’ve noted quite a few headlines that create a different impression of the market than what they underlying statistics show. Keeping a closer eye on and understanding the stats helps to strip out some of the hyperbole.
Recent Data Points From the Maui Market
The Maui market is influenced by trends in the national market, but it doesn’t necessarily follow in lockstep with national dynamics. The high volume of second home sales and being a literal island can create different market dynamics. Here are some of the latest numbers on local inventory, price reductions and pending sales.
As of May 24th, there are 198 active home listings on the Maui MLS. At the end of April, there were 176. That is a modest 12.5% increase in active home listings for the month to date. For a little perspective, it is worth taking a look at pre-Covid numbers. In the end of May in 2019, there were 445 active listings. We are still less than half of pre-Covid inventory.
Condo inventory remains particularly limited. As of the 24th, there are 160 active condo listings in Maui County. There were 158 at the end of April. Inventory gains for the month to date remain negligible. For further context, there were 487 active listings at the end of April 2019. We are at less than a 1/3 of 2019 inventory.
Clearly, we aren’t seeing the same type of inventory increase that the mainland market is seeing. That said, Maui traditionally doesn’t see the big inventory bump that the National market sees in the late spring. Inventory decreased from the end of April to the end of May in 2017, 2018 and 2019. This modest bump in inventory for homes and condos for the month to date goes against pre-Covid trends. The Maui market’s seasonality may be masking a shift on inventory.
Pending Sales on New Listings
We’ve looked at the percentage of homes going under contract within the first ten days of going to market in Musings II, Musings XIII and Musings IX. In mid February, 56% of new listings went under contract in 10 days or less. In early April, that number decreased to 46%. By mid-late April, the number was down to 43%. Of the 76 listings that came to market between May 7th and May 14th, 27 went under contract within 10 days. That calculates to 35.5%. To give a pre-covid reference point, 21.7% of new listings went under contract in 10 days or less for properties listed between May 7th-May 14th 2019.
In our last edition of the musings, I started tracking price reductions on Maui. I looked at the percentage of active home and condo listings that reduced the price below their original asking price. On May 24th, 33% of active home listings reduced their price one or more times. That is actually down from May 5th when 37% of active home listings reduced their price one or more time. On May 24th, 18.2% of all active condo listings reduced their price one or more times. That is up from May 5th when 15% reduced their price one or more times.
Thoughts for Sellers
The good news is that by all metrics this is still a seller’s market. Inventory remains well below normal and there is still demand. That said, the dynamics now are not the same that they were six months ago or even three months ago. The “list the property, set a weekend open house schedule and offers due by Monday routine” is not quite the norm that it used to be. Here are some thoughts for prospective sellers entering the market.
It’s been a forgiving market when it came to pricing a property over the last 14 plus months. In some cases, buyers set the pricing. Seemingly well priced properties would be inundated with offers and prices would soar well over asking. In other cases, sellers priced their property at levels that seemed really high based on recent comparable sales. They would still get their number. Sometimes, that would happen quickly and others it would just be a matter of the market catching up. That said, the margin for error on pricing appears to be shrinking. As market conditions become more variable, some of the more aggressive sellers are not getting the market feedback that they hoped for.
Sellers should work closely with their Realtor to look at both recent comparable sales and the level of activity in their segment of the market. There is a lot of heterogeneity in the market so pricing a home can be a challenge. If the market is not responding to your price, you may need to adjust pricing a little more quickly.
Price wasn’t the only area where sellers had a lot of leverage in this more recent market cycle. Sellers rebuffed requests for repairs, tightened timelines and sometimes negotiated post-closing occupancy without buyers batting an eye lash. A high number of back up offers only strengthened sellers hands. Buyers with FOMO (fear of missing out) conceded to seller demands far more often than not.
Anecdotally, I have heard stories of sellers overplaying their hand during negotiations in the current market. While sellers still have some leverage, more buyers are willing to walk away. Concessions, repairs and other negotiations are likely to become more commonplace if the market continues to adjust.
Days on Market
As the numbers above indicate, the number of homes going under contract right after listing is steadily decreasing. We are also seeing more price adjustments compared to earlier in the spring. That of course means that days on market is increasing. It may take a little longer to sell in this market. If your circumstances dictate that you need to sell sooner than later, adjusting to market feedback is important.
A Little Maui Beauty
Contact The Maui Real Estate Team
Contact The Maui Real Estate Team with questions, feedback or if you need assistance buying or selling property on Maui. We look forward to hearing from you.
Maui Real Estate Blog
What Does the end of Forbearance Mean for Borrowers and Maui The Real Estate Market?
The initial economic impacts of Covid-19 included lost jobs and disruption of income for large numbers of people around the globe. With the local Maui economy largely dependent upon tourism, our small island was among the nation’s hardest hit. The original CARES act that passed in the spring of 2020 offered relief to homeowners who struggled to pay their mortgages due to job loss or depressed wages. Those struggling homeowners were able to work with their lender to pause or reduce their mortgage payments for a period time. What started as a 6 month program was extended to 18 months. A total of over 7.25 million borrowers used forbearance as a means of relief for at least some period of time. That number of homeowners in forbearance is down to approximately 2,000,000 by around the end of June.
As of September, some of the borrowers who were among the first to enter the forbearance program will come to the end of their 18 month forbearance period. At this time, it does not appear as if there will be additional extensions of the program. What does the end of forbearance mean for those borrowers and the market as a whole?
The good news is that Fannie, Freddie and FHA are saying the right things about borrowers coming to the end of their forbearance. Recent guidelines released by those entities are focused on loan modifications for borrowers struggling to make their payments due to Covid related financial struggles. If you are a homeowner faced with the end of forbearance in the immediate future, remain proactive in your discussions with your mortgage holder. Ask about loan modification programs.
For those that may not be able to get a loan modification or the terms of a modification are too onerous, selling may be the only option. During the mortgage meltdown of the 2000s, borrowers struggled with the dual challenge of economic hardship and plunging prices. The result was a wave of foreclosures. Current market conditions couldn’t be more different as prices on island and for much of the continent climbed steadily over the last twelve months. The good news is that the recent appreciation should allow the majority of borrowers who need to sell to pay off the balance of their loan. That should significantly curtail the number of foreclosures. Feel free to Contact The Maui Real Estate Team if you are trying to get a sense of the current market value of your property. We would be more than willing to help out with a free broker’s price opinion.
Based on the above, it seems unlikely that the end of forbearance will significantly change the Maui market. The impact of the end of forbearance in the Canadian market seems to reinforce that notion. About 17% of the mortgages in Canada went into forbearance. As of February, 98% of the forbearance programs expired. As of the end of June, the average home price in Canada was up 25.9% year over year.
While the end of forbearance might lead to a small bump in inventory, a drastic influx of distressed property seems less likely. Real Estate economists are predicting a gradual increase in inventories as the year progresses. Post forbearance properties should be one component of that increase.