Maui Real Estate October 2011 Sales Statistics

What is Act 48?

A well intended law with plenty of unintended affects

Everyone has heard at least one story of a home owner badly hurt by the down economy. They struggle to keep their heads above water and try to work with their lender to find a way to keep their home. You’ve heard the rest of the tale as well. Their bank, at first, refuses to talk with them. When they finally get through, the bank wants a complete financial history and it seems like the homeowner is always missing one more piece of paper.  Then the bank representative they were working with disappears and the next person they get says there is no record of ever having received any paperwork to begin with.  Start over. 

The Hawaii electorate cried, “Foul! Somebody do something!”  So the Hawaii legislature did.  In an effort to force communication, Act 48 went into effect in May of this year.  Among the variety of things that it did was to require that any homeowner facing a non-judicial foreclosure could demand a face-to-face meeting with their lender.  It added some seemingly complicated and fuzzy procedures to the non-judicial foreclosure process that made some banks and their attorneys leery of what they could and couldn’t do and seemed to levy some heavy penalties if they did it wrong.  The capper is that it implemented a moratorium on non-judicial foreclosures until July of 2012.

The unintended consequences are that banks are shifting to judicial foreclosures.  Judicial foreclosures take much longer, are much more expensive for the bank and leave the homeowner open to a deficiency judgment.

Ultimately the law may help some people stay in their homes, but it will also keep this economy’s numbing foreclosure hangover dragging on for the foreseeable future.

There is plenty of inventory and prices are the lowest since 2003

So why are sales declining steadily?

There were 74 condos sold on Maui in October – continuing the downward trend of sales for this year.  There has been a steady decline in sales every month since March of this year.  The median selling prices have zigzagged up and down since the beginning of the year when the median selling price was $295,000 compared to $310,000 in September.

Perhaps one reason that sales are declining is that some buyers may be anticipating yet another drop in prices.  There is no evidence that prices are going to be dropping significantly anytime soon.

Another reason that sales may be slowing is that there is less inventory.  That’s right, less inventory.  In November of 2010 there were 1,347 condos on the market.  At the beginning of this November inventory was down to 1,104.  At the current rate of sales we have enough condos to last more than 14 months. That should indicate a strong buyer’s market.  So why are sales slumping?  With all the people who are seriously looking, it is still difficult to impossible to find what picky buyers want.  My colleagues say that the condos feel “picked over”, and well priced properties sell quickly, many times with multiple offers.

Area Highlights

There were a few peaks and valleys.  The Napili/Kahana/Honokowai area had 21 sales in October, more than double the number sold in August when the median selling price was over $100,000 less. That’s 31% more volume than this time last year.  Sales prices had a vast range from $50,000 for a 1/1 leasehold foreclosure unit at Maui Sands to a $950,000 2/2 oceanfront unit with panoramic ocean views at Royal Kahana.

Kaanapali was hard hit last month, with declining numbers across the board. With only 2 sales in October, they are down 80% on sales volume from September and down 85% from this time last year. The median sales price is down 46% from September and 54% from last year.

Central Maui (Kahului/ Wailuku) area condo sales are making a small comeback across the board.  Median sales prices went up 37%  compared to September, but are standing at 46% of October 2010’s median prices. Sales volume was also up 133% from September but down 35% from October 2010.  Prices bottomed out at $80,000 for a 1/1 short sale unit at Puuone Terrace and went all the way up to $492,500 for a brand new 3/2.5 unit at the Villas of Kehalani in Wailuku Heights. This was one of three areas on Maui that had an increase in median sales prices as compared to September.

Although median sales prices were down compared to September in all areas except Central Maui, Molokai and Wailea/Makena, selling prices in Kihei and Napili/Kahana/Honokowai were higher than they were in October 2010. Median sales prices in those areas were up 15% and 21% respectively, from this time last year.     

Highs and Lows

More of the same shocking low sales prices as last month.  A nicely updated, 1/1 REO leasehold unit at Lahaina Residential on Front Street in Lahaina sold for only $18,000, probably due to the fact there were possible serious plumbing issues in the unit.  There were a total of 8 condos on Maui that sold for less than $100,000. Most were recently updated or remodeled, and a couple had some ocean views.  Seven of those units were REO sales and one was a short sale.

On the higher end of the condo sales prices, there were 5 that sold for over $1,000,000 in October. They included a $2,800,000 sale at the Residences on Kapalua Bay for a 3,000+ square foot 3 bedroom, 3.5 bathroom condo; a 1 BD unit at Kapalua Bay Villas for $1,225,000; two 3/3.5 units at Hoolei in Wailea/Makena for $2,600,000 & $2,415,000 respectively; and a 2/3 unit at Kapalua Ironwoods for $2,300,000.

Potts’ Picks

For some time now we’ve talked about the investment potential of Kapalua. Now there is a 2 bedroom 2 bath Kapalua Golf Villa that is an REO.  It is fully furnished, updated and it’s priced at only $534,900.  In the MLS it’s 348805.

At the high end there is nothing better than the views from a Mahana 2 bedroom villa. This direct beachfront unit offers the best view you’re going to get.  It is completely renovated and a good buy at $1,225,000. This Mahana unit is 342109 in the MLS.

For more information on these or any other units send an email with your request to info@aloharealtygroup.com or, visit our website at www.aloharealtygroup.com.

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The roller coaster continues for single family homes

Who says there’s no financing?

2011 has been a bit of a roller-coaster ride for single family homes.  54 sales in January, 59 in February, 89 in March, 89 in April, 71 in May, 81 in June, 68 in July, 81 in August, 78 in September, and 74 in October.  Up, down, up, down, hang on to your hat.  However, the overall trend is an upswing as sales of single family homes are up by 9% compared to the first 9 months of last year.

Just as the number of sales is in a state of flux this year, so are the sales prices.  What may point towards a more frugal trend is that the median price is $435,000, down 5% over the same period.  That may mean that first time home buyers and investors are taking advantage of bargains. But also keep an eye on the upper end as the average selling price so far this year is $797,475, up by 4% over the same period last year. 

Area Highlights

A new trend seems to be the raising median sales prices of homes in the upcountry areas of Maui. Sales dollar volume in Haiku is up 20% from September (18 times last year’s numbers) and the number of sales rose 67% from September. Makawao area sales volume is up 48% from September and up over 7 times the sales volume this time last year. The number of sales is up five-fold from this time last year. 

This month’s roller coaster ride proved to be no different in the high-end markets.  Kapalua has had no single family sales the past two months, as in zero. In Wailea the sales volume is down by 26% and the number of sales is down by 25% from September.  Kaanapali sales volume is down by 34% from September, and Sprecklesville sales volume is down by 15%, and

Lahaina Town may have been the star of the show in October, as the sales volume went up almost 5 times that of September, and twice the number from this time last year. The median sales price is almost 6 times September’s price of $360,000 and over 4 times the median sales price of last year.  Kihei seems to be struggling as the median sales price for the 8 homes sold in the area was $350,000 – down 25% from September and 16% from last year. The sales volume is down 79% from September and 77% from this time last year. 

In Wailea there were only 3 sales, but the median selling price was over $2,400,000.

Highs & Lows

The lowest selling price for a home in Maui was a 2 bedroom, 1 bathroom home on a small lot in Haliimaile that closed for $100,000.  It was bank owned, an REO, that needs work – lots of work.

The other end of the spectrum is a 4 bedroom, 3.5 bathroom beachfront home in Makena.  This 3,300 square foot beauty went for $7 million.

Potts’ Picks

There is a nice looking 4 bedroom, 3 bath house with an ohana priced at $395,000.  The house is 1,935 square feet.  The ohana is a 2 bedroom, one bath unit of 600 square feet.  It’s located in central Kihei, walking distance to the ocean, number 350228 in the MLS.

Kapalua is known worldwide as a luxurious destination resort.  And while it lost some of its shine under the previous management, the resort is on the comeback and there are some uniquely lavish homes. 

One is this 7,687 square foot estate on ½ acre at Kapalau’s Pineapple Hill.  It features 5 bedrooms, 5 ½ baths, a studio (a celebrity musician would need a studio, right?), beautiful finishes and broad views of the Pacific and Molokai.  Oh, it’s priced at $7,495,000 and it’s MLS #349675.

For more information send an email with your request to info@alohapotts.com, or see all of the listings on Maui at www.aloharealtygroup.com.

If you are coming to Maui this year, let us know, we would love to say hello.

A hui ho!

View past MREA Issues:

Mid-Year 2011, 2010 Wrap Up, August 2010, July 2010, 2009 Wrap Up, September 2009, June 2009, May 2009, Q1 2009, 2008 Wrap Up, November 2008, September 2008, August 2008

Get more information and details

To get more information on property and trends, you can search all properties listed for sale at www.AlohaRealtyGroup.com.  If you can’t find what you’re looking for there, send us an email to lee@alohapotts.com, and we’ll do our best to get an answer for you.  As we get more requests for information, we’ll add new sections to the website, newsletter or both.

About The Aloha Potts Team

Aloha Potts is a team comprised of L. Lee Potts, MBA, REALTOR® R(B) and Barbara S. Potts, MBA, REALTOR® R(B) and former California CPA.  We are business people, and we treat our clients with the same care and service attitude that we would like to receive when we do business.  We are in business for pleasure and profit.  We expect that most of our clients will enjoy the property they own in Maui (pleasure), and it would be nice for everyone if your property performs well for you (profit).  Real estate can be highly speculative, and profits are never guaranteed.  So if you are buying property in Maui, it’s a good idea to surround yourself with a professional team.

Lee Potts is the former President of an international software company and former Marketing VP of a publicly traded franchise organization.  Lee and Barbara are both licensed under Aloha Realty Group. 

Barbara Potts was a CPA with Ernst and Young before joining Apple Computer back when both Steve’s were there (Jobs and Woz).  She was also Director of Strategic Marketing for Grass Valley Group, a division of Tektronix, and a business broker in California.