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!