Market Overview January

Market Overview February

Market Overview March

Astonishingly low sales through first quarter

Selling prices stay stubbornly high, with exceptions

In Maui we frequently hear that our real estate trends follow the mainland, specifically California, by about 6 months.  That is taken as gospel by many, although the devil is truly in the details.

If it is true, then we have good news, bad news, and great news.

The good news is that in the last few weeks we’ve seen indications of a turn around.  Home sales on the mainland, including California, are trending up.  Nationwide new home sales are up, new home starts are up and the stock market is moving in a positive direction.  If we get a little consumer confidence we might see this thing head in the right direction.

The bad news, with a glimmer of hope, may be for property sellers in Maui.  If we are trailing the trend in California, the glimmer of hope is that sales have picked up there.  One source reported that inventory levels, the ratio of the number of active listings vs. the consumption rate, in certain areas of Southern California are down from 16 months worth of supply to 6 months.  The 16 months of inventory indicates a strong “buyer’s market” which forces prices down.  Six months of inventory is generally considered a neutral market, meaning prices should be stable, neither increasing nor declining.  In other words, the bottom of the market has likely come and gone.  However, prices are off by as much as 40% or more in some California markets, which has served to fuel current sales.

The bad news for Maui sellers is that the bottom is still on its way here and we can still expect buyers to hold off. 

Or maybe not  - if they are smart.

The great news is that interest rates are extremely low, making good deals even better.  There is lots of inventory for comparison shoppers.  And, if the bottom has come and gone in California you don’t want to be walking into one of our open houses saying, “I remember back in 2009 when I could have bought this place for…”

Slow sales through the high season for condos

What can be ahead?

The first quarter of the year, January through March, is always one of the busiest times for real estate in Maui. The weather is cold on the mainland, the whales are back and the island is full of real estate buyers.  There is a saying in the realty community at this time of year, “whales mean sales” alluding to the number of buyers on the island.

But the first quarter of 2009 has been a major disappointment to potential sellers, as sales of condos were only about one-half the level of 2008.  Monthly sales through the first quarter averaged in the high 40’s compared to monthly averages in the 90’s in 2008 and 2007. 

One problem would appear to be prices. I say appear because there are some amazing bargains on the island.

In March the median price plummeted from February’s $572,900 to $331,000, a decline of 42% for the month. The last time we saw a drop like that was in September.  Then the median just kept climbing; defying the gravity of the markets. 

The last time we saw a median price below $331,000 was April of 2005, exactly four years ago.  Are we going back to 2005 prices?  We see similar prices, but in 2005 it wasn’t uncommon to see over 200 condo sales in a month.  I don’t expect to see that level of activity any time soon.

Highs and Lows

The low sale of the year, so far, was a one bedroom unit on the west side at Hale Ono Loa.  It went for an unbelievable $45,000 and it was not a short sale.  There were some extenuating circumstances, but $45K?

And there were short sales that closed in Maui.  In the first quarter there were 9 condos that sold for under $100,000. 

There were 10 condos that sold for over $2,000,000 during the same time frame.  The priciest was a 3 bedroom, 3.5 bath condo that sold for $4.5 mil at the new Honua Kai complex.

Potts’ Picks

There are bargains at all price points.  But we know what people come to Maui for is the great location with the killer view.  The property with the best of both is at Kuleana in Kahana on the west side.  It’s completely renovated 1 bedroom unit, the lanai is almost over the water, and it’s priced at $469,000. 

If you are looking for a deal on a bit more expansive accommodations, there are some very good buys at the aforementioned Honua Kai.  There are 3 bedroom units currently listed in the low $2 million range, and there are rumors of other motivated sellers. 

For more information send an email with your request to lee@alohapotts.com or, visit our website at www.alohapotts.com.

Homes sales tank in the first quarter

Declining prices fail to boost sales

For the last year or more, home sales statistics painted a rosier than reality realty picture due to sales in new developments including “affordable” home sales. 

That’s all over for the time being, and with a market dependent on resales we are getting a truer picture of the trends. 

And the trend is decidedly downward in both quantity and the median price of homes sold.  During the first quarter of 2009, the number of homes sold was fewer than fifty percent of the number sold in the same quarter of 2008.  And the market prices are reflecting the overall trend.  With a median of $504,500 in March, the median is down by about 20% from last year’s median. 

Area Trends

Selling prices were a bit odd in the previous month. The Central area of Kahului/ Wailuku has always been a more affordable area.  Last month, however, the median selling price in Kahului/Wailuku was higher than the median price on Maui.  And none of the sales in the central area were distressed properties.

Other parts of the island led the way in price declines and short sales.

Some years ago Maui’s upcountry gained popularity with locals for affordable prices, shorter commutes and less congested living than other parts of Maui.  The gains in popularity led to higher prices for homes.  It looks like the upcountry party is over. 

In March, the median prices for upcountry and that area of the island in general were below the median selling price for Maui for the first time I can remember. If this trend holds look for some great buys upcountry. 

Of the 53 homes sold in March, 9 were distressed properties. Kihei., normally a pretty strong market, accounted for more than half of the distressed properties sold for the month.

Distressed Properties

There are currently 109 homes listed as short sales or bank owned properties.  They account for less than 10% of all homes listed for sale and they accounted for 16% of homes sold for the month. 

We do expect to see increases in the number of bank owned properties and short sales listed in coming months.  We’ll be keeping a close eye on that trend.

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

Get more information and details

To get more information on property and trends, you can search all properties listed for sale at www.alohapotts.com.  If you can’t find what you’re looking for there, send us an email at 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,  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 and is responsible for most of the marketing for the Aloha Potts Team.. 

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. Barbara is the Principal Broker for Aloha Potts Realty in Lahaina Maui, Hawaii.