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.

February is off to a busy start for the Maui Real Estate Team. That has translated into less time available for blogging. I have been in the process of working on our “unofficial” stats for over a week. In the meantime, the good folks at the Realtors Association of Maui beat me to the punch when they released their “official” January Maui Real Estate Statistics. This isn’t the first time that RAM was first out of the gate and it won’t be the last. As a result, I am going to do something of a hybrid official/unofficial post for this month’s stats. In addition to the link to the official stats above, I want to point out a few more numbers that I thought were interesting and provide some context and analysis to this month’s sales data.

There were 63 homes sold in Maui County during January with a median sales price of $550,000. Last January, there were 50 sales at a median price of $399,000. That is a 26% increase in sales volume and a 38% increase in median price.

I counted 61 condo sales on Maui this month with a median price of $287,000. That is actually one more sale than what was reported by RAM. The January 2012 numbers were 91 sales at a median price of $330,000. That is a 33% drop in sales volume and a 13% drop in median price.

There were only 7 land sales reported in Maui County during January 2013 with a median sales price of $615,000. The January 2012 numbers totaled 9 sales at a median price of $350,000. That is a 23% drop in sales activity. I am reticent to comment on the change in median price for fear that it will be misconstrued as a sign of a massive appreciation in land values.

Here are a few other numbers of note Maui’s January Real Estate Sales.

• There were 6 REO or bank owned sales in Maui County during January of 2013. By comparison, there were 29 REO sales in January of 2012. That calculates to a 79% drop in activity.
• The lack of REO activity may have contributed to some of the more frenzied bidding activity I have seen on a property. An entry level REO in Napili was listed for $225,000. By the time the smoke cleared, the sales price for the property was $390,299. That sales price was 73% over the original asking price.
• There were 14 successful short sales that closed during January of 2013. There were 19 short sale closes during January of 2012. That is 24% drop in short sale activity.
• The highest sales price for a home last month was $9,200,000 for a beachfront residential condo at Makena Place. This was the only sale over $2,000,000 last month.
• The highest sales price for a condo was $3,500,000 for a three bedroom/three bath beachfront unit at Honua Kai in the Kaanapali area. This was the only condo sale over $1,500,000. In fact, the next highest condo sale was $790,900.

There were quite a few interesting numbers above. That being said, I wanted to delve into the condo numbers first. Since we were late to the presses with our stats, I have the advantage of seeing some of the local headlines for this month’s stats. One local publication had a sensationalistic headline proclaiming a big drop in condo sales. Was this dip in activity headline worthy? Better yet, what caused this drop? Well, it is hard to say definitively but it is worth noting that the previous two months saw significant condo sales activity. Many sellers were anxious to close before the end of the year to avoid potential tax increases. I would surmise that this may have accelerated the condo activity at the end of the year at the expense of sales after the first of the year. As RAM executive Terry Tolman pointed out in the official stats, when you average the December and January Sales totals you come out to around 100 sales which is in line with what you might expect for an average month this time of year. I do not think the drop in sales numbers is in any way a reflection of future market trends. There have been 171 condos that have gone under contract since the first of the year. That is a pretty healthy number.

The drop in medians is also out of line with recent trends. I think part of that stems again from sellers trying to close before the first of the year. This was a particularly slow month for condo sales in the luxury market. It was pretty eye opening when I saw that the second highest condo sale for the month was $790,900. There are usually a few sales over $1,500,000 each month and quite a few more over $1,000,000.

While the median condo price plummeted, the home median was up substantially over January 2012. If you are a frequent reader of our stats, you will have read about the inventory crunch occurring at the lower ends of the market. Entry level homes are particularly scarce. There were only 14 sales under $400,000 this January. Last January, there were 24 homes sold under $400,000. I would imagine we are going to continue to see elevated median sales prices unless there is an influx of lower priced home inventory.

The land market regressed after a strong close to 2012. Perhaps, that may have been due to my over exuberance in the Unofficial December stats. More likely, we may have seen a similar scenario to the condo market with some sellers trying to close before the end of the calendar year resulting in fewer sales right after the new year. Again, I don’t necessarily see this as a sign of decreasing activity in the land market. As it stands, there are already seven land sales that have been recorded since February 1.

What does this all mean for buyers and sellers? Limited inventory continues to have a significant impact on the Maui Real Estate market. Entry level homes and condos are particularly scarce, but there are shortages of listings in some communities going all the way up to the $1,000,000+ range. Buyers need to be prepared to act quickly when the right opportunities come on the market. If you require financing, getting pre-approved on your loan is a must. It helps you determine your budget and it improves your standing in the eyes of sellers. Sellers are facing an interesting market place. While the situation for sellers is improving, there are things to be aware of if you are listing your property. I have seen a few properties go on the market well above recent comps. The Limited inventory has created enough of a frenzy that buyers are willing to submit offers at or near these premium prices. The challenge comes with appraisal. Appraisal standards are a lot tougher than they were in the boom times. If the comparable sales aren’t there, you won’t get the appraisal you need to move forward on a sale. Other listings that are going on the market for well over recent comparable sales aren’t getting as much interest. Market dynamics are proving to be complex. Either way, well priced properties are going to have a much higher chance of closing successfully.

We would welcome the opportunity to talk to buyers and sellers who are interested in entering the Maui Real Estate market. We look forward to discussing how we can assist you in achieving your goals in the Maui market. Contact The Maui Real Estate Team for a free consultation today.

This is a quick post looking at the impact of bank owned properties in the 2012 Maui Real Estate Market. Starting in 2009, bank owned properties (REOs) were an important force in Maui. On the negative side, bank owned properties were one of the bigger drivers of price decreases. Sellers had to adjust their prices to compete with the bank owned properties which frequently entered the market below comparable sales. On the positive side, REOs helped to provide some much needed inventory as conventional sellers waited on the sidelines hoping for improved market conditions. They also provided opportunity for buyers looking for values. In 2012, we saw the influence of bank owned properties decline in the Maui Real Estate market.

As you can see by the chart above, the volume of Bank Owned homes coming to the market came down significantly in 2012 from what we saw in 2011. There was a 39% drop in the number of REO homes coming on the market. There was a 61% drop in the number of REO condos that came on the market compared to 2011. Land is the only segment of the market where we saw more bank owned properties in 2012 than 2011. There was a modest increase of 8% more REO land listings than there were in 2011.

As you will see in the chart below, the decline in the total number of bank owned homes and condos coming on the market becomes more pronounced when you break 2011 and 2012 down into six month intervals.

The bank owned condo market has really dried up. The inventory went from 146 REO condos listed in the first half of 2011 to only 33 listed in the last half of 2012. That is a 77% reduction in new listings. The REO inventory for single family homes experienced a less drastic cut, but still decreased significantly through 2012. The 72 REO homes listed in the last half of 2012 is 51% lower than the 146 listed in the last half of 2011.

What should we expect for bank owned inventory in 2013? Early signs suggest that 2013 may see similar trends to 2012 with even fewer REOs. As of today, there have only been eight bank owned homes, four bank owned condos and one bank owned lot listed since January 1. Discussions with agents who list bank owned properties suggest that their pipelines are relatively dry. To be clear, that doesn’t mean that there aren’t any pre-foreclosure properties on Maui. In fact, if you look at sites that track potential foreclosure listings, there appear to be quite a few properties in the process of foreclosure around the island.

If there are lots of properties potentially facing foreclosure, why won’t we see lots of bank owned listings? The answer goes back a few years to when Hawaii passed legislation hoping to aid residents facing foreclosure. ACT 48 was designed to give home owners facing non judicial foreclosure an opportunity to go through mediation with the bank. The goal was to facilitate loan modifications. Unfortunately, well intended legislation can have unintended consequences. Almost all of the banks were wary of the uncertainty of the mediation process. Instead of agreeing to this new process, the majority of the banks opted to start handling their foreclosures judicially. This process is longer and more cumbersome for the lienholders, but it still was more of a known entity than the mediated non-judicial foreclosures. There were relatively few properties in the judicial foreclosure pipeline prior to ACT 48. Even then, it was usually a 14 month process from start to finish. With a much bigger supply of potential judicial foreclosures, the process appears to be taking considerably longer.

The longer process has also led some banks to be more proactive about short sales. Bank of America has a significant number of the delinquent mortgages on the island. They have been proactively encouraging some delinquent owners to participate in a cooperative short sale program that has cash incentives for move outs. More importantly, they are not pursuing the deficiency balance on the loans. That means the bank isn’t trying to recover all or even any of the balance between what is owed and the proceeds of the short sale.

What does this mean for buyers looking for that outstanding bank owned value coming on the market? Well, you may need to be really patient. Perhaps some of these judicial foreclosures will be resolved in the second half of the year. Others think 2014 is looking more likely for the next wave of bank owned properties. We frequently get inquiries about bank owned vacation rentals. They were a small percentage of the bank owned inventory even when the inventory of REOs was significantly larger. The bank owned vacation rental friendly condo is especially elusive in the current market. Buyers may want to readjust their expectations and focus on other types of inventory. While an overall shrinking inventory has meant fewer rock bottom prices, there are still good values to be had among the conventional and short sale properties. If you are a determined REO shopper, be prepared to act quickly and strongly when these properties come on the market. Well priced REOs are frequently drawing multiple offers and sales prices that can exceed asking price. Contact the Maui Real Estate Team if you are considering buying a home, condo pr piece of land on Maui in 2013. We would welcome the opportunity to sit down to discuss your real estate needs.

June is already upon us. That means we are officially in to festival season on Maui. The Kapalua Wine and Food Festival gets underway today and The Maui Film Festival at Wailea is set to begin next week. It also means it is time to take a gander at the Unofficial Maui Real Estate Statistics. These are the numbers that I found by sorting through our Realtor MLS database. The Realtors Association of Maui should be releasing their own stats in the next few days. In the interim, here is a sneak peak at the numbers followed by a few thoughts on the market.

By my calculations, there were 61 homes sold in May 2012 at a median price of $382,500. Last May, Maui Realtors reported 71 homes sold at a median price of $418,000. That is a 14% drop in volume and approximately a 9% drop in median price.

Thus far, Maui Realtors have reported 112 condos sold at a median price of $334,500 for May 2012. The May 2011 numbers were 114 condos sold at a median price of $349,500. That’s less than a 2 percent drop in sales volume and around a 4% drop in median price.

The Maui land market saw 17 sales in May 2012 at a median price of $330,000. By comparison, there were 15 sales reported at a median price of $275,000 in May of 2011. That is a 13% increase in volume and a 20% increase in median price when comparing this May to last May.

The Maui Real Estate market is still seeing significant influence from bank owned sales (REO) and short sales. There were a total of 49 bank owned and short sale transactions last month. Of the 61 homes sold, 22 were REOs and shorts. That is approximately 36% of the volume. Of the 112 condos sold, 24 were REOs or shorts. That is 21% of the transaction volume. Of the 17 land transactions, three were bank owned.

While there has been a lot of discussion of a hot market on the street, this is another month where sales volume under performed compared to last year. That is now four out of five months this year where home sales have been lower than last year. This is the second month this year where condo volume has been lower.

There are two things that I think are worth addressing from the paragraph above. The first is the perception that the market is on fire vs. the reality of the numbers. I also think it is worth exploring why the market is seeing lower transaction volumes compared to last year. Is it a reflection of decreased market demand or is market supply starting to have an impact?

Why do people think the Maui Real Estate market is performing better than the numbers would indicate? I am sure there may be a few Realtors who might be guilty of hyping the market as a means to inflate buyer interest. That comes with the territory when you are working with sales professionals. People want you to know that their product is hot to heighten consumer interest. In this case, the product of Maui Realtors is the real estate market. That being said, I don’t think all of those hyping the market are doing it as a ploy to increase their sales activity. I do think there are more Realtors keeping busy this year vs. last year. How are more Realtors keeping busy when there is lower sales volume? The answer to that may lie in the distribution of sales. The one area where we have seen a healthy drop in transaction volume is among bank owned properties. There were 39% fewer bank owned transactions this May vs. last May. Bank owned listings tend to be concentrated in the hands of a smaller pool of agents. While this pool of agents has seen fewer transactions. We have seen more activity outside the REO market. That activity has been spread across a much broader pool of agents.

The question of why activity is lower is a little tougher to answer. I am not sure that I am going to provide definitive answers or much more than anecdotal evidence. With that caveat, I surmise that the decreased inventory is playing an important part in the decrease in sales volume. Inventory is as low as it has been in the last few years. Some buyers have been frustrated by the limited number of properties on the market. Last year, there was an abundant and well priced REO inventory that was drawing buyers into the market and increasing transaction volume. Due to national and local foreclosure moratoria, we have seen fewer bank owned listings through the first half of this year. While there were high volumes of lower end condo deals last year, the limited bank owned inventory has meant a healthy reduction in transaction volume. There has been a 24% decrease in volume for condo sales under $200,000 between this year and last year. Many of the properties that are on the market in this segment are attracting bidding wars as buyers vie over the limited inventory. We have even seen some price increases among the low end condo complexes as demand exceeds the current supply.

The luxury condo market is an area where we have seen an even bigger reduction in sales volume. Sales volume is off 56% when you compare the number of condos sold over $1,500,000 through the first five months of this year with the first five months of 2011. This segment has not been impacted by reduced REO inventory. In fact, this segment has been mostly devoid of bank owned properties. We have seen a small reduction in new development inventory. The successful Hoolei complex is mostly sold out. Also, most of the premier units at Honua Kai have sold. The reduction of inventory as a result may be a factor in some of the reduction in volume. It certainly doesn’t account for all of the dip in sales activity. The odd thing is that we aren’t seeing a similar reduction in the luxury home market. Sales volume this year is within a few percentage points of last year. It will be interesting to see if we see any upticks in the luxury condo market as the year progresses evening out some of the discrepancy we have seen thus far.

What does this all mean for buyers and sellers? The song remains the same from the Maui Real Estate Team. Buyers will continue to see opportunities in this market. That being said, most of the good opportunities are attracting multiple buyers. Buyers should be prepared to act quickly when good deals become available. Buyers that require financing should make sure to be pre-approved prior to looking. Having a pre-approval letter at your disposal will bolster the strength of your offer. Most Sellers will find that market conditions remain challenging. While bank owned inventory is down some, they continue to have a negative impact on home values. Sellers will need to closely monitor recent comparable sales when going to market. Overpriced homes aren’t getting a lot of love from home buyers. If a seller has the capital, efforts should be made to prepare your property for sale. Having a home inspection prior to listing is an excellent way to identify and address potential maintenance issues that could cost you money, or worse, become deal breakers while your home is under contract. In this market, you need intelligent, experienced and ethical representation when you are buying or selling. Contact The Maui Real Estate Team with questions on the statistics or for assistance buying or selling Maui properties.

May is off to a busy start for The Maui Real Estate Team. Sales activity and other obligations put us a little bit behind schedule for our “Unofficial Maui Real Estate Stats.” This is one of the months where the Realtors Association of Maui (RAM) beat us to the punch with the release of their official numbers. As a result, this is going to be something of a hybrid between an unofficial and and official stats post. I will provide the same data, thoughts and commentary as one of our traditional unofficial posts with a link to the additional data of the RAM stats. Without further ado, here are the monthly numbers.

There were 79 home sales reported on Maui during April of 2012 with a median sales price of $469,000. There were 87 sales reported last April with a median price of $488,000. That is a 9% decrease in volume and a 4% decrease in median when comparing this year to last year.

There were 128 condos sold last month with a median price of $399,000. That compares with 120 sales with a median price of $336,102 for last April. That is roughly a 7% increase in volume and a 19% increase in median price when comparing the two Aprils.

There were 8 lots sold in Maui county during April with a median price of $365,000. By comparison, there were 14 sales at a median of $382,500 last April. That is a 43% decrease in volume and a 5% decrease in median value when comparing the months of April.

Here is a link to the full Official RAM April Maui Real Estate Statistics.

One thing that you won’t see in the RAM stats is specific data on Bank Owned (REO) and short sale transactions. We have been keeping track of these types of transactions as they have had a major impact on market dynamics since 2008. There were a total of 53 bank owned or short sale closes during April of 2012. Of the 79 homes sold, 24 were REOs or shorts. That is 30% of the sales volume. Of the 128 condos sold, 29 were REOs or shorts. That is approximately 23% of the total sales volume. There were no bank owned or short sale land transactions this month. It is also worth noting that there were more short sale closes than REO closes this month. This is something of a recent trend that I will discuss a little more below.

There were no earth shaking stats this month. The thing that stood out to me was the decrease in REO sales and the relative strength of short sale transaction volume. As noted in other unofficial stats posts this year, we have seen a shrinking REO inventory over the first half of 2012. Banks also seem to be more open to short sale transactions than they have in the past. That has led to this shift where short sale transaction volume is equal or greater to bank owned closes. This may well be something of a temporary shift. While I suspect banks will remain more open to processing short sales, it is likely we will see more bank owned inventory coming to market this summer. The foreclosure/robosigning settlement between the banks and the federal government is likely to unclog a portion of the bank owned pipeline. We may also see some of the foreclosure inventory that has been backlogged due to Hawaii’s ACT 48 fallout.

Home and condo sales were very similar to last month. As with last month, condo volume is slightly outpacing last year’s totals while home volume is down a little compared to last year. While land sales saw a brief day in the sun last month with 20+ closes, this month’s numbers regressed to 8 total sales. I may have been premature when I speculated that we could coming out of the worst of the land market doldrums in the March unofficial stats post. It will be interesting to watch the land market to see if March truly was an anomaly.

My advice for buyers and sellers entering the Maui Real Estate market varies based on your price point and property type. The Maui market is not monolithic. The biggest differentiator between market segments is inventory. This month’s official RAM release indicated that home, condo and land
inventory shrank across the board. The inventory at the entry level of the market is extremely tight. Home buyers entering into this market will find prices way below peak prices, but they will also find that the limited inventory is leading to upward price adjustments and competitive bidding. Buyers who want to get into the market should be pre-approved for a loan prior to beginning their search. That will put the buyer in a better position to move quickly when the right home or condo comes on the market. Land, East Maui and the luxury market are a few areas where inventory is higher and you will find more of a true buyers market.

Sellers will need to closely evaluate their segment of the market place prior to listing. Sellers at the lowest priced segments of the market will find a ready pool of buyers albeit they will likely be disappointed with sales prices when compared to the peak. In the market segments where buyers are fewer, sellers need to look closely at recent comparable sales when determining their price point for market entry. Sellers should also be aware of recent changes to the Hawaii Purchase Contract. Sellers now have greater disclosure obligations that are further incentive to do a home inspection or even a survey prior to listing. Keep an eye peeled for more discussion of the new purchase contract and it’s implication for sellers on The Maui Real Estate Blog and www.MauiRealEstate.com. Contact The Maui Real Estate Team with questions on the market or for assistance buying or selling Maui Property.

April is here and that means it is time to check in on how the Maui Real Estate market performed in March. Market activity is a frequent subject of conversation on our island. I have had more than a few interactions this month where people have asked, “Is it true the market is on fire?” Others have stated unequivocally that the Maui Real Estate market is booming again. Needless to say, there appears to be quite a bit of hype about Maui property sales. The question I have is whether the market meets the hype. That’s what I am hoping to answer with this month’s Unofficial Maui Real Estate statistics. Without further ado, here is what I found after sorting through the Maui MLS data for the month of March.

By my count, Maui Realtors have reported 80 home sales for March 2012 at a median price of $432,500. That compares to 89 homes sold in March 2011 at a median of $450,000. That is around a 10% dip in volume and a 4% dip in median prices when comparing this March to last March.

Maui Realtors have reported 128 condo sales last month at a median price of $370,000. By comparison, there were 124 condos sold at a median of $289,000. That represents a 3% increase in volume and a 28% increase in median prices for March 2012 over March 2011.

Land transactions for March 2012 stand at 21 sales at a median price of $455,000. Last March, there were 10 sales reported at a median of $517,500. That is a robust 110% increase in sales volume and a 12% decrease in median price.

The Maui Real Estate market continues to be impacted by the sale of Bank Owned Properties (REOs) and Short Sales. There were 66 bank owned or short sale closes on Maui last Month. Of the 80 homes that sold, 34 were REOs or Short Sales. That is 42.5% of the sales volume. Of the 128 condos that sold, 30 were REOs or Short Sales. That is 23% of the condo sales. Of the 21 land sales that closed, 2 were REOs. There were an additional four bankruptcy sales among the 21 closes.

Looking at the numbers above, the land sales volume is the big stand out for the month. The ugly step child of my unofficial stats posts is getting a day in the sun. Land sales started to slump from a volume stand point in the middle of 2007. Over that span of time, there had been only one month with 20+ sales. That was in early 2008 when there were 24 sales. The majority of those sales were a bulk purchase in a single development. What drove the market resurgence and is this the sign of increasing health in the land market? I would venture that value and opportunity are what drove an upswing in buyers. We are starting to see sellers adjust their pricing to levels where buyers are willing and able to purchase. The question remains whether March will start the beginning of an improved land market or if it is just an anomaly. There is still between 4 and 5 years worth of land inventory on the market so there is quite a ways to go before we see the dynamics in place to substantially raise values.

The condo market produced the second most eye catching number of the month with a 28% increase in median over March 2011. To be clear, this jump does not mean condo values have increased 28% over the last year. The biggest reason behind the change relates to where market activity is occurring. During March of 2011, much of the sales activity was lower priced bank owned properties. This year, there is less bank owned inventory and tighter entry level inventory. This has actually led to some modest price increases for some entry level condos. This shouldn’t come as too big a surprise as this segment of the market was the first to see prices decrease and was the hardest hit segment of the Maui market.

While lower priced activity has slowed due to lack of inventory, we have seen more activity in the middle ranges of the condo market. The increase in middle range sales is helping to push up medians. Buyers appear to be responding well to new development properties with 30 sales that were new developer offerings last month. Much of this new development activity is happening in the middle price ranges of our market. We are also seeing a little more activity in the middle ground of the second home and vacation rental market. This is part of a national upswing on vacation rental properties and second homes. Canadian buyers continue to have an impact as currency exchange remains favorable. While the middle ground has been stronger, the ultra luxury condo market is off a little over last year. There were 4 sales over $1,500,000 this March compared to 7 sales last March.

The dip in home sales numbers may just be a reflection of monthly variability. Home sales have been alternating between better than the year prior and a little slower than the year prior for the last few months. While the numbers are by no means poor, they do contradict the word on the street. The Maui market appears to be making some strides to a slow recovery, but it may not meet be experiencing the booming recovery that some are proclaiming. It will be interesting to see what the next few months bring us. We are rapidly approaching the end of peak buying season for Maui which should lead to a decrease in demand. On the other side, we continue to see tightening inventories in some segments of the market.

For those that are thinking of sticking their toe in the Maui market, my advice hasn’t changed. Buyers who want to enter the market will find that there are properties priced well below peak market values. The best opportunities can be competitive with multiple offers and above asking sales prices on some of the better values. With that in mind, buyer’s who need assistance with financing should take the time to get pre-approved with a bank up front. It is best to get approval with a bank with experience lending in Hawaii. Buyers should be prepared to strike quickly when they see properties that meet their needs at good prices. Sellers will find that there is still competition via lower priced REOs, short sales and motivated conventional sellers. The Maui Real Estate team works closely with their sellers to look at comparable sales and evaluate their niche of the market. Sellers who have the means should address deferred maintenance and other issues that could deter buyers. If you are interested in buying or selling property on Maui, Contact The Maui Real Estate Team for market knowledge, professionalism and responsive service. Aloha!