Tag: Larry Ellison

It’s the most wonderful time of the year according to Andy Williams. I can’t argue with Andy. December is off to a beautiful start on Maui with sunny skies, calm winds, glassy waves, more whale sightings and clear views of Haleakala and the West Maui Mountains. That also means November is done and it is time for me to crunch some numbers and come up with our unofficial November Maui Real Estate Statistics. November was another surprisingly busy month for island real estate. While the fall months are typically the slowest for real estate activity, that hasn’t been the case this year. Here are the numbers I came up with after looking through the sales data followed by some context and analysis of the current Maui Real Estate market conditions.

By my count, there were 83 homes sold this November at a median price of $470,000. Last November, there were 76 homes sold at a median price of $422,500. That calculates to a 9% increase in volume and a 13% increase in median prices when comparing the two Novembers.

There have been 96 condos reported sold this November at a median price of $390,945. By comparison, 77 condos were reported sold last November at a median price of $265,000. That is a 25% increase in volume and a 48% increase in median prices between this November and last November.

I counted 22 land sales in Maui county during November of 2012 with a median price of $455,000. By comparison, there were 9 land sales during November 2011 with a median sales price of $505,000. That calculates to a 244% increase in sales volume and a 10% decrease in median prices.

There were quite a few other numbers that I thought were worth sharing from my research compiling these statistics.

• There were 21 bank owned sales last month. Most of those sales were single family homes, but surprisingly 9 of the 21 were land sales. By comparison, there were 39 bank owned sales in November of 2011. That is a 54% drop in bank owned sales. The lower number of bank owned sales should be a continuing trend with limited numbers of bank owned properties coming on the market.
• There were 24 short sales that closed successfully last month compared to 22 sales that closed in November of 2011. We are continuing to see a steady supply of short sale closes as banks are working more proactively with homeowners who are delinquent with their mortgage payments.
• The highest sale for the month was over on the Island of Lanai. A buyer paid $4,150,000 for a 5,227 square foot ocean view home in the Manele Bay area of the island. I will have a little more on Lanai’s market in the discussion below. Last November, the high sale was $3,000,000 for a home in the Pineapple Hill area of Kapalua.
• There were two homes sold over $2,000,000 in Maui County including the one on Lanai. There were 10 condos sold in Maui County over $1,500,000 this November. By comparison, the November 2011 numbers were 2 homes sold and 4 condos sold above those respective price points.
• Buyer activity remained strong with 249 properties going under contract during the month of November. This means November 2012 trumped October 2012 for the title of busiest month for new escrows this year. This is actually one of the busiest months in several years. As discussed in Part II of our Unofficial October Stats, this increased activity is a reflection of a shift in the market.

There are quite a few things worthy of discussion in this month’s Maui statistics. First things first, I want to provide a little context on some of these stats. The increase in condo medians is a number that jumps off the screen. This is a dangerous stat that is easy to misinterpret. To be clear, condo values on Maui have not increased by 48%. This is a classic case of medians changing due to big shifts in sales activity at different price ranges. In November 2011, there were ten sales under $100,000. This November, there was only one sale under $100,000. Shrinking inventory at the lowest price ranges combined with modest price increases translates to far fewer sales below $100,000. Conversely, there was an increase in luxury condo sales this month with ten sales over $1,500,000. That compares to four sales over $1,500,000. More high end sales and less low end activity means a bump in median value regardless of what is going on with property values. While there have been some price increases between this year and last in segments of the Maui condo market, those increases in value have been far less than 48%.

The land market is another place that produced eye catching numbers with a 244% increase in sales volume. It is important to keep in mind that part of the reason for the dramatic increase can be attributed to the low number of sales in November 2011. There are some other factors in play as well. We have seen a few small spikes in land market activity over the last couple of years. Most of the spikes could be attributed to buyers responding to values in the market. There were a total of nine bank owned sales in the land market last month, and it can be argued that each of these sales were good comparative values. If the market stays true to recent form, we might expect to see land sales volume dip again next month. That being said, there is a part of me that wonders if we might see more sustained activity in the land market in the coming months. With inventory shrinking on the home market, there may be more buyers looking for alternatives in the land inventory.

As noted above, the high sale of the month for Maui County occurred on the Island of Lanai. In addition to that home sale, three of the ten condo sales over $1,500,000 were in the Manele Bay area of Lanai. When it was announced that Larry Ellison had purchased the island of Lanai, I speculated that there may be an uptick in the Lanai second home market. It appears that this may be coming to fruition and there is something of a Larry effect in play. In the first six months of the year, there was only a single close over $1,000,000. After Mr. Ellison’s purchase, there have been five sales over $1,000,000. Overall, there were 14 properties sold in the first six months before the Ellison announcement, there have been 18 closes in the five months after the announcement with a healthy volume of properties under contract.

So what is the big picture on Maui? As it stands, it is clear that our slow season has been anything but slow. We are in a period of heightened buyer activity. Limited inventory, low interest rates and improved consumer confidence have stoked the fires of the market and resulted in increased sales volumes. The tighter inventory and increased demand has also resulted in some modest price increases in a lot of different market segments. Homes and condos priced at or below the median sales price are more likely to have seen some upward price pressure. With December marking the start of our peak tourism and real estate seasons, it would appear that the dynamics are in place for a continuation of current trends. In other words, we should see more sales and modest price increases. That being said, there is a pretty big caveat. While it is likely that inventories will remain relatively tight, consumer demand could shift with any economic challenges. With fiscal cliff negotiations still outstanding, there is an air of uncertainty in the economy.

What does that mean for buyers and sellers? If we see a continuation of current conditions, buyers should expect a competitive landscape. Well priced properties will often attract multiple offers. Over asking sales prices are common. Buyers that require financing should absolutely get pre-approved with a lender prior to looking at properties. That will give you a better sense of your budget, and a pre-approval letter is a big help when competing against other buyers. Many sellers are asking for pre-approval letters with offers. Sellers will find an interesting market place. Well priced, well maintained properties are selling quickly. Overpriced properties are languishing with little interest. Sellers should look closely at recent comparable sales when determining go to market pricing. This type of market demands professional, experienced representation. Contact The Maui Real Estate Team for assistance buying or selling Maui Real Estate.

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.

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.

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.