Market Overview May

Market Overview April

Slip sliding away

The nearer your destination the more you’re slip sliding away.

With the April median condo price off 52% compared to the same month last year and the median home price off 16%, lots of people looking – LOTS of people looking, what are buyers waiting for?  With median prices down to 2004 levels, the last time Maui’s median condo price was below $300,000 was July of 2004, what are buyers waiting for. 

Buyers, in unison, “We’re waiting for the bottom!”

Well May saw more sales for both homes and condos and the condo prices went up again.

One of the most common refrains we’ve heard at open houses comes from that couple wandering through and whimsically reminiscing, “I remember looking at this 5 years ago when we could have bought it for…”

Well today, you can buy it for what you could have 5 years ago.  With interest rates down and expected to rise, prices at 2004 levels and lots of people “shopping,” what happens next?

Well usually, whether you are waiting for the bottom to buy or waiting for the top to sell, while we are waiting to be sure, the bottom or top comes and goes and, once again we missed it by that much. 

In the words of Paul Simon, “the nearer your destination, the more you’re slip sliding away”.

Maui condo prices down

For the ones that are selling, that is

Do you hear that ringing sound?  Those are the real estate gods letting us know that the bottom of the market is near.

And the bargain hunters are snapping up bargains.

Through the first 5 months of 2009 the average selling price is off  by 31% and the median is off by 28% compared to 2008.  Both the median and the average may be skewed by some of the short sales and foreclosures.  However, there haven’t really been that many distressed property sales compared to the rest of the country.  But they are coming. 

The bargain sales, along with a smattering of short sales and foreclosures, are pulling asking prices down.  And the actual selling prices are adding more pricing pressure.

Consider that the current median asking price is $500,000 on the button.  However, the actual median selling price for the last 2 months was $290,000 in April and $315,000 in May. 

And the top end of the market isn’t immune to price erosion either.  Two examples are a Kapalua Bay Villa, originally listed for $2,395,000, eventually lowered the asking price to $1,575,000 and sold for $1,505,000.  An ocean front unit at Kaanapali Shores was originally listed for $1.7 million. They reduced their price to $1,195,000 and settled for $970K.

So, are we at the bottom of the market?  Maybe, maybe not.  But are we at least close?  Like I said, a lot of people who are smarter than me think so.  At any rate, we are close enough that if you are a serious buyer you don’t want to be looking in the rearview mirror a few months from now thinking, “I shoulda, coulda, woulda.”

Highs and Lows

During the last 2 months we’ve seen more short sales closing.  Twenty-five of the 76 sales made in the last 2 months were short sales or bank owned. 

The low sale on the island was a Harbor Lights condo.  This 1 bedroom, 1 bath unit was originally listed for $115,000.  The price was lowered to $39,000 and it sold for $35,000. 

A 3 bedroom, 3.5 bath condo at Hoolei topped the market. This 2,619 square foot unit was listed for $2,450,000 and sold for $2.3 million, or 94% of asking price. 

Potts’ Picks

This month we have 3 picks that offer great value. 

First is an oceanfront property, with spectacular views, just steps from the water.  It could use a little TLC which is reflected in the price.  The one bedroom, 1.5 bath unit with all new furnishings is listed for $359,000.  It is MLS #334908.

We also like a short sale at the Kapalua Bay Villas.  This oceanfront unit has been upgraded to the Kapalua Resort Gold Standard.  It was originally listed for $1,275,000.  Now they are asking $799K.  This unit is #328962 on the MLS.

Finally, offered for your consideration, a 2 bedroom, 2 bath, 1,269 square foot ocean view unit at the Masters.  This unit is a short sale, listed for $695,000.  Over the last 2 years the median selling price for 2 bedroom units at the Masters was $1,165,000. How low will this one go?  Stay tuned.  MLS# 336903.

If you would like to get a list of current short sales or if you would like to know a bit more about how short sales work, send us an email.

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

Homes sales find moderate improvement

Still well below normal

Home sales seem to have stabilized for the moment, if you can consider sales 35% - 40+% lower than a year ago stable.  Last year’s sales numbers were lifted with the addition of “affordable homes”.  However, when we correct for that anomaly, this year’s sales are still well below last year.

If fact, for the year single family homes are off by 45% through May and the median price is down by 12%.   

The average days on market for homes was 159 days in May which includes an average of 60 days for escrow.  That indicates that what is selling is doing so in a very reasonable amount of time.  So, if you are a seller and you are not getting any action you need to consider a price change. We are seeing an increase in first time home buyers who are finding more affordable homes and taking advantage of the IRS credit.

Area Trends

Maui’s Central area of Kahului/ Wailuku had 22 sales in May.  Kihei had 9 sales and no other area had more than four.

In the Central area the median price of $453,500 was off just slightly from May of 2008.  That is a bit surprising considering that a year ago about 20% of the Central area homes sold were the lower priced affordables.  This year, however, about 33% of the homes sold in Kahului/ Wailuku were distressed properties. 

In Kihei, the median selling price rebounded back to $676,000 in May from April’s low of $425,000.  That is still well off prices from a year ago.

Maui’s Upcountry prices continued their downward trend.  The upcountry had shown steady increases as locals escaped to the cooler temps and comparatively lower prices.  Median prices in May for all upcountry areas were in the high $400’s.

Distressed Properties

The number of short sales and bank owned properties is up to 196.  That is almost double the 109 homes listed at the end of March.    

In March distressed homes accounted for less than 10% of all homes on the market. They now account for 19.4% of homes listed for sale and a substantially higher percentage of homes sold for the month. 

About 1/3 of the homes sold in the central area were distressed properties: either short sales or bank owned properties.  Over half of the homes sold in Kihei were distressed properties.

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.

If you would like a list of short sales and/or banked owned homes, send an email to request the list.

Potts Picks

This month we’ve picked 2 homes that offer great value. 

The top of the top is 104 Woodrose Place in Kapalua.  This 4 bedroom, 3.5 bath, 3,314 square foot home in the exclusive Pineapple Hill gated community was originally listed for $2,995,000.  The price has been reduced to $1,995,000.

The next bargain is a short sale on the Kaanapali Hillside.  30 Kui Place features 5 bedrooms, 3.5 baths and 3,526 square feet of living space.  It has ocean views and has been partially renovated.  It was originally listed for $1,787,000.  It has been reduced to $1,000,000.

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.