Tag: Bank Owned

Last week, the Realtors Association of Maui (RAM) released their official Maui Real Estate Statistics for the month of September. There was only one real change from what we posted in the “Unofficial September Statistics”. RAM reported one additional home sale above what we had reported at the beginning of the month. The RAM stats also offer a little more historical data and community level granularity.

When looking at the official RAM stats, the one thing we always hone in on is the monthly inventory. During September, Maui saw another drop in home and condo inventory with a slight uptick in land inventory. We have seen a steady decline in the inventory of properties on the market for the last couple of years. We have seen increased buyer activity and a decrease in the number of new listings coming to market each month as shown in the chart below.

There have been fewer bank owned properties coming to market and fewer conventional listings as well. A number of potential sellers are stuck in their homes due to negative equity. They don’t want to take a loss and are waiting for the market to rebound. This phenomenon is not limited to Maui. We are mirroring national trends.

We have talked about the potential influence of shrinking inventory for some time. The effect was first felt among entry level condos in Kihei .This was the first part of the Maui market that experienced scarcity and the first segment to see modest price increases. As scarcity impacts more parts of the Maui market, those segments of the market are starting to experience signs of upward price pressure. There are also still parts of the market where inventory is more abundant and prices are flat to declining. That being said, it is setting up to be an interesting Winter buying season on Maui. If we don’t see an influx of inventory and the economy holds steady, the recipe is in place for additional price increases. Contact The Maui Real Estate Team if you are in the market to buy or sell Maui Real Estate. We would welcome the chance to discuss the market and your real estate needs.

That was quick! September has come and gone in the blink of an eye. It was a busy month for The Maui Real Estate Team as we brought quite a few new listings to market. That being said, I am looking forward to October. This is one of my favorite times of year as the waves begin to return to The North Shore and night time temperatures begin to cool. The end of September also means it is time for us to post our “Unofficial” September Maui Real Estate Statistics. This is our sneak peak before the Realtors Association of Maui releases their official numbers. We also like to include some thoughts on the market and the meaning behind the numbers. Without further ado, here are our numbers for September.

By my count, there were 75 homes sold in Maui County during September. The median sales price was $425,000. By comparison, the September 2011 numbers were 80 homes sold with a median sales price of $412,000. That is a 6% decrease in volume and a 3% increase in median sales price when comparing the two Septembers.

I counted 65 condo sales in Maui County last month with a median sales price of $339,563. During September 2011, there were 83 condos sold at a median of $334,900. That calculates to a 22% decrease in sales volume and a 1% increase in median price.

I tallied 11 lots sold in Maui County during September with a median sales price of $238,000. The totals for last September were 12 parcels of land sold with a median price of $330,000. That is an 8% drop in volume and a 28% drop in median sales price.

Here are a few other numbers that I found noteworthy while looking through the sales data.

• There were a total of 16 Bank Owned properties sold last month. Most of those were single family homes. By comparison, there were 48 Bank owned properties sold last September. That is a 66% decrease in bank owned sales volume.
• There were 29 short sale transactions that closed last month. During September of 2011, there were 15 short sales that closed in Maui County. That is a 93% increase in short sale activity.
• There was one luxury home sold on Maui this September for over $2,000,000. Last September, there were six sales over $2,000,000.
• The luxury condo market had four transactions over $1,500,000 during September. In September 2011, there was one condo sold over $1,500,000.
• The high sale on island last month was $2,900,000 for a residential condominium in Launiupoko. The low sales price for the month was $8,600 for a condo at Hale Ono Loa.
• Ten of the sixty-five condos sold last month were at Ho’onanea in Lahaina. These were developer sales at this new West Maui condo complex.

Looking at the numbers above, there were a few things that stood out to me. One thing that really caught my eye was the decrease in bank owned sales compared to last year. The bank owned inventory on the island remains limited. It has been surmised for sometime that we would see an uptick in bank owned inventory this summer. After a week last month where we saw a handful of new bank owned listings coming on the market, I wondered if it was potential anecdotal evidence that the bank owned backlog was finally coming. Looking at the actual data, I was wrong. There were only 16 new bank owned properties that came on the market last month. That is well below the 30-50 new bank owned listings per month that we were seeing during the height of bank owned activity. It is clear, we still aren’t seeing the flood of shadow inventory that most expected.

Part of the reason for the lack of bank owned inventory could be traced to the increase in short sale transactions. While bank owned sales were down, short sales were up almost 100% over last year. Banks are becoming more cooperative on short sales. It is one of the primary reasons why there have been reports of a significant reduction of the shadow inventory. While I still think we may see some increases in bank owned inventory at some point in the future, I am starting to think that it won’t be anywhere close to the flood once anticipated.

Last but not least, the most eye catching numbers were the decreases in sales volume compared to last September. With many saying the market has improved, why the downturn in activity? We have been focusing on the potential impacts of a decrease in inventory for some time. In the paragraphs above, we referenced the decrease in bank owned inventory. There are also fewer conventional properties listed for sale. I will do a separate post with my data on the inventory sometime in the next week. In the interim, I would speculate that the lack of inventory is a driving factor in the decrease in sales volume. While I can only offer the dreaded anecdotal evidence, I know our own office has quite a few buyers who are struggling to find properties that meet their needs. There is demand to support more transactions, we are just lacking in inventory in many segments of the market.

As a side note, I will be interested to see how these numbers are reported in the broader media and real estate community. I have to say, I was a little disappointed in some of the breathless commentary on last month’s numbers. I saw more than a few people who portrayed the over twenty percent increase in median as representative of an equivalent increase in values. As I have said many times before on this blog, changes in medians are not always indicative of changes in values. Changes in the composition of homes sold can have an equal or greater impact on the change in monthly median.

What does this all mean for buyers and sellers? Our perspectives remain unchanged. Buyers are continuing to find good values, but constrained inventories among many property types require buyers to exhibit patience. This means you may have to wait to find the right properties to come on the market that will meet your needs. You should do all that you can to prepare yourself so you can act quickly when the right deal comes along. Many sellers require pre-approval or pre-qualification letters with offers. Get pre-approved before you start looking! It will help set your budget and won’t hold you back when it is time to make offers. Sellers have their own set of challenges. Sellers will need to look closely at their particular segment of the market when determining go to market prices. While some segments of the market lack inventory, other segments have an inflated inventory. In order to attract attention in a saturated part of the market, you really need to price well. Well priced properties are getting interest. Overpriced homes are languishing with few calls. Delving into the current Maui Real Estate market requires quality representation. Contact The Maui Real Estate Team if you need assistance buying or selling Maui Property.