Maui Real Estate Blog
2016-2017 Maui Property Tax Rates
The new fiscal year for Maui County starts on July 1 and that means new property tax rates. The Maui County Council approved a new budget that saw a reduction in property tax rates for almost every property tax classification. Some of the reduction in rates may be offset by increased assessed values for properties. This is following a general pattern with Maui County Property tax rates. When the market is going up rates are decreased. When market values go down, property tax rates go up. You can see the new rates compared to the old rates below.
- The Residential tax rate will be $5.30 per $1,000 of assessed value. That is a decrease of 10 cents from the 2015/2016 tax rate of $5.40.
- The Apartment tax rate will be $6.00 per $1,000 of assessed value. That is unchanged from last year’s tax rate.
- The Commercial tax rate will be $6.60 per $1,000 of assessed value. That is also unchanged from last year.
- The Industrial tax rate is $6.69 per $1,000 of assessed value. That is a decrease from $6.85 last year.
- The Agricultural tax rate is $5.66 per $1,000 of assessed value. That is down from $5.75 in 2015/2016.
- The Conservation tax rate is $5.80 per $1,000 of assessed value. That is a decrease from last year’s rate of $5.90.
- The Hotel and Resort tax rate is $8.71 per $1,000 of assessed value. That is a decrease from the previous rate of $8.85.
- The Time Share rate is $14.31 per $1,000 of assessed value. That is a healthy decrease from the old rate of $14.55.
- The Homeowner rate is $2.70 per $1,000 of assessed value. That is a down from last year’s rate of $2.75.
- The Commercialized Residential rate is $4.35 per $1,000 of assessed value. That rate remains unchanged.
Property tax rates are paid biannually in Maui County. The first bill comes due in August with the next payment made in February. Tax rates for the next fiscal year will be debated again in the Spring with the County Council approving new rates sometime in late May or June.
Maui Real Estate Blog
Maui 2012 Year End Market Report
We wanted to take a little bit of a different look at the 2012 year end statistics for Maui County. While we will give a brief look at the broad view. I wanted to hone in on the distribution of sales. While 2012 was a stronger year for sales overall, not all price ranges in the market performed equally. We want to show how different segments of the market performed and compare those segments to the current inventory. That may help us get a better sense of the 2013 outlook for the market. Without further ado, here are the numbers.
There were 933 home sales reported in Maui during 2012 with a median sales price of $470,000. By comparison, there were 901 sales in 2011 with a median sales price of $432,500. That calculates to a 4% increase in sales volume and a 9% increase in median sales price.
During 2012, there were 1,248 condo sales reported on Maui with a median sales price of $358,995. By comparison, the 2011 numbers were 1,157 units sold with a median sales price of $310,000. That calculates to an 8% increase in volume and a 16% increase in median price.
There were 173 land sales reported in Maui County during 2012 with a median price of $350,000. In 2011, the numbers were 134 lots sold with a median price of $310,500. That means that the 2012 land sales increased 29% over and the median increased 13% over 2011.
While the overall market showed improvements in volume for all three types of property, market performance on Maui varied by price point. The chart below compares the sales volume of homes at various price ranges during 2012 and 2011.
There were a few things that I found noteworthy about the chart above. First and foremost, luxury sales activity decreased in 2012 compared to 2011. There were 41 sales over $2,000,000 in 2012. There were 61 sales over $2,000,000 in 2011. That is a 33% drop in volume. On the other end of the spectrum, it was noteworthy that the activity dropped below $300,000. The reason for the drop in activity at the low end isn’t due to a lack of buyer interest. With record low interest rates, first time home buyers were very active. Instead, we are starting to see the impact of reduced inventory. Prices began to rise at the bottom end of the market and there were fewer bank owned properties in that price range. The middle of the market saw greater variability in performance depending on price range. Some slices of the market saw more activity in 2012 while others saw less. That being said the overall trend in the middle was an increase in activity.
The chart below compares the distribution of sales for condos between 2011 and 2012.
While condo sales were up overall in 2012, we also saw variability in performance by price range. Some of the same trends that were evident in the home market also appeared in the condo market. As with the home market, luxury condo sales were down. There were 46 condos sold above $1,500,000 in 2012. There were 65 sold over $1,500,000 in 2011. That is approximately a 29% drop in volume. The lowest price ranges in the condo market also saw a dip in inventory and a subsequent drop in sales volume. Sales under $200,000 were off 18% below 2011 levels. As with the home market, this wasn’t due to lack of demand. We just saw a shrinking of entry level condo inventory during 2012 due in part to price increases and a big reduction in the number of bank owned listings.
The chart below compares the distribution of land sales on Maui during 2011 and 2012.
The land market was a little different than the home and condo market in 2012 in that we saw improvements in the vast majority of price ranges. The low end was up and much of the middle of the market was stronger. The luxury market was down slightly with 1 less sale over $1,000,000. The land market was lagging more so than condos and homes going into 2012. It had the greatest inventory and lower levels of demand going into the year. Sales outpaced 2011 levels through much of the year with an added boost in the last couple of months. The lack of interest in this market meant more motivated sellers and comparative values.
While the charts above provide us some historical data on last year’s market, they don’t tell us a whole lot about the current market. I hope the next three charts will help to tell that story. These three charts show the current inventory of properties by price point juxtaposed against the 2012 sales volumes by price point. Assuming that demand is equal to or potentially greater than what we saw last year, this will help to show parts of the market where inventory is really constrained and the other parts of the market where there is a relative abundance of property to choose from. A few things to note about these charts. Current inventory includes active listings as of January 24th. It does not include properties under contract. The active inventory includes all of Maui County including Lanai and Molokai.
It is said that a healthy real estate market will have six months of inventory. More than six months supply is thought to be a surplus. Less than six months and you are considered to have a shortage of properties for sale. As you can see from this chart comparing current home inventory against 2012 home sales, the Maui Real Estate market is seeing very different dynamics based on price range. The low end of the market is experiencing extremely low supplies of home inventory. Based on last year’s sales rates, there is about one month of supply of homes in the $300,000-$399,000 price range. The numbers are slightly better under $300,000, but that is somewhat deceiving. The supply on the island of Maui is almost nonexistent. Most of the active homes in this range are located on the neighboring islands of Molokai and Lanai. Supplies are still constrained until you get to the $800-900,000 price range. At that point, the supply is a little more than six months of inventory. As you get higher in price, the tables turn considerably. Once you get over $1,000,000, there is over a year of inventory based on last year’s absorption rates. In the price range from $1,750,000-$2,000,000, the supply of homes exceeds two years of inventory. From that price point and higher, you have anywhere between 2 and seven years of inventory depending on price ranges.
It is clear that home buyers looking at prices below the median price point are going to find that market conditions are tight. Selection is limited and well priced properties are being snatched up extremely quickly. Those that are venturing into this part of the market will need to be prepared to act quickly when well priced properties come on the market. The recipes are in place for price increases to occur on the low end. High demand and low supply will do that. That being said, I think there are some barriers in place that will constrain prices from rising too quickly. The biggest barrier is appraisal. Appraisers are a lot more conservative then when they were in the boom market. We have already seen issues with appraisal on properties that experienced competitive bidding.
The numbers above suggest a buyer’s market for luxury homes on Maui. There should be a few caveats to that statement. Not all communities and price points in Maui have the same level of supply. For example, if you look at a place like Wailea there are three homes for sale between $1,000,000 and $1,500,000. There were eight sales in Wailea at that price point last year. That means less than six months of supply in that price range. Where there is high supply, it doesn’t necessarily mean an abundance of motivated sellers. Many of the luxury home owners have significant staying power and may well be able to ride things out until market conditions improve. While there may be some motivated sellers out there, I think the biggest advantage to being a luxury buyer in this market will be the general quality of selection. Another thing to note is that I am using last year’s absorption rate. We are starting to see some anecdotal evidence of increased activity in the luxury market this year. Luxury markets saw improvement on the mainland last year. Typically, we lag behind mainland trends by a few months. If the luxury market is in fact improving, those “years” of inventory could shrink quickly.
Looking at the chart above, the condo market is seeing some similar dynamics to the home market. There are tight inventories on the lower price ranges and robust inventories in the luxury markets. Currently, there is less than six months of inventory below $400,000. The inventory is even tighter than it appears below $200,000. A third of the properties listed in that price range are leasehold. There are also quite a few properties from Molokai and Lanai included in that inventory. The market dynamics change quite a bit as you go higher in price. Inventory between $400,000 to $1,000,000 range from a little over six months to a little over a year of inventory. Once you get over $1,250,000 and up into the luxury market, the inventory well exceeds last year’s demand. While there are more condos to choose from in this range, it can be a little more challenging finding motivated sellers. Again, many of the high end condo owners have the deep pockets that allow them to hold out for longer on pricing.
The land market has been far weaker than the home and condo market since 2007. Limited demand has allowed supplies to stay high. That is reflected in the chart above. The only price range with less than six months of inventory is below $200,000. Once you get above $300,000 there is more than a year of inventory. When you get over $500,000, you have two years of inventory or more depending on specific price points. That being said, November and December of 2012 were the two best months of sales since 2007. If the market were to sustain itself at that level, inventories could start to shrink quickly. I would not be surprised if that happened as buyers have started to explore the land market with fewer options available among the inventory of homes for sale. The other thing to note is that scarcity and abundance vary by community.
In general, the charts above suggest that we will have an interesting 2013 for Maui Real Estate. The limited supply at lower price points in the market may lead to a decrease in sales volume. The tight supply also is creating a dynamic that will result in price increases. Tight supplies and high demand are leading to a lot of bidding wars at the low end. As you go up in price, the overall supply of properties should limit the potential for any price increases. That being said, supply and demand in specific geographies may allow for price increases at higher prices. While the sheer volume of inventory suggests that there may be plenty of opportunities for luxury buyers, I would argue that their biggest advantage is going to be the selection of properties to chose from rather than highly motivated sellers. If you are interested in entering the Maui Real Estate market during 2013, we would welcome the opportunity to discuss your needs. Contact The Maui Real Estate Team today to arrange a free consultation.
Maui Real Estate Blog
Big Price Reduction! Incomparable Olinda Estate
We just had a big price reduction on our Incomparable Olinda Estate listing. This 44 acre plus Upcountry Maui estate property must be seen and experienced to be appreciated. Once you spend some time on the property, your life may very well change. With two homes, a burgeoning native forest that is being subsidized by a conservation grant, a four-lot subdivision nearing completion and gorgeous views to the North Shore and West Maui Mountains, past Kahakuloa to Molokai, opportunities abound. Private retreat. Family estate. Organic farm. The only limitation is your imagination.
The primary residence is a luxurious 2 bedroom 2 bath home with a long list of amenities. Quality details include vaulted ceilings, an enormous lanai that looks towards the North Shore and Molokai, custom kitchen cabinetry, high quality granite kitchen counters, Brazilian Cherry Floors, two spa tubs in the bathrooms and a small photo-voltaic system to subsidize the electric bill.
The 2nd dwelling is an older farm dwelling with some updates, a large 4-car carport and an office. In addition there is a small greenhouse, a water catchment building with two tanks and an auxiliary water catchment tank as well. There have been over 1200 native trees planted on the property including varieties such as Koa, Ohia and Sandalwood. The native trees subject to the NRCS grant can be expanded to over 30 acres of the estate that are protected by a gated deer fence. In addition to natives there is a healthy orchard of Citrus and Lychee as well as a few large Avocado trees on the property. Other features include a sauna, an additional building site and a “time machine” that will bring you back to when you were 8 years old.
This property offers tremendous privacy for those that seek seclusion. However, you are five minutes away from Makawao Town and a short drive to Seabury Hall and Paia. Kahului airport is only thirty minutes away. This listing price for this Upcountry estate has been reduced from $5,000,000 to $4,500,000. Check out the 1050 Piiholo Road, Olinda listing page for more photos and information on the property. Contact The Maui Real Estate Team with questions or to arrange for an exclusive showing.
Maui Real Estate Blog
Jaws Swell October 9-10, 2012
Maui’s winter surf season kicked off early with a big swell hitting the island October 9th-10th. Big wave riders from all over the world converged at the renowned big wave spot Jaws. The swell was distinguished not only by it’s very early arrival in big wave season, but also by the perfection of the waves. The conditions were a factor in the increased performance level as surfer’s took paddle in big wave surfing to new levels. Shane Dorian led the charge with arguably the biggest paddle in barrel ever ridden at Jaws on Tuesday afternoon. I was lucky enough to be on hand to watch and film some of the action on October 9th. In addition to Shane’s big wave, here is some of the other footage I was able to capture on a historic day in big wave riding.
This is another wave caught by Shane before his big barrel. It was probably the best quality shot I was able to get during my filming.
Shortly before Shane caught his big wave, a monster set steam rolled through the lineup scattering riders and their boards. I missed the first wave of the set which took out about half the lineup. Most of the other surfers were cleaned up by the following waves.
Kai Lenny, son of Maui Real Estate Team agent Martin Lenny, was one of the guys out in the lineup both days. He caught a ton of great waves. Here are a few waves ridden by Kai. I am bummed I missed some of his better waves.
There was plenty of buzz all over the Internet over this big swell. Here are some links to a few other collections of photos and video that I found online.
The Maui Real Estate Team’s Jaws photo album with a handful of photos I snapped while shooting video.
Maui Real Estate Blog
Shane Dorian at Jaws (Pe’ahi) October 9, 2012
We had an early season High Surf Warning on Maui yesterday. Waves slowly built throughout the day. By late afternoon some of the best big wave riders had congregated at Maui’s infamous big wave spot Jaws. I had the opportunity to head out to watch the action from the cliffs just before sunset. One wave ridden by Shane Dorian has already been receiving considerable buzz as one of the best waves ever ridden at Jaws. I had the video camera rolling and was able to get some footage of Shane’s ride. Don’t mind the off color commentary.
The waves are still breaking this morning. Who knows what great feats may happen today?
Maui Real Estate Blog
Unofficial September 2012 Maui Real Estate Statistics
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.