Market Overview November

Tis the Season

But is anybody buying anything?

Since our last newsletter in October, things have changed significantly.  The election is, at long last, over.  We, of course, expected that.  What we didn’t expect was the economic news and fallout.  It was stunning to say the least.  And would-be buyers are stunned and waiting.

Maui real estate buyers are behaving just like our great green turtles when they sense a shark is in the area.  They hide under a rock, bring their head and limbs inside their shell and close their eyes until they sense the danger has passed.

So it might seem counterintuitive (wow, a 6 syllable word) that we would be expecting a busy winter real estate season in Maui, but we are.

There are 3 reasons why: interest rates, airlines and pent up demand.

For weeks we’ve been hearing that interest rates on home loans should be coming down.  Now they have.  A Google search of interest rates shows that Quicken Loans is advertising loans starting 4.875%.  Freddie Mac reports an average 30 year fixed rate at 5.53% down from 6.03% just 2 weeks ago. 

When oil hit $140 a barrel last summer, everyone feared the worst.  It has long been said that the only thing that can really stop real estate sales on Maui is if the planes stop flying in.  When average airfares flew up to around $1,000 it was almost like the planes stopped flying. 

Now, air fares are back to normal.  I’ve heard of rates as low as $382 round trip from Seattle and fares of $450 are fairly common from San Francisco.

And there is a sense we get from talking to potential buyers that they really want to buy, they are just afraid to take the step.  You can almost feel the frustration from those waiting and eagerness to move forward.  That is pent up demand. 

With some prices dropping back to 2004 levels, record low interest rates and low airfares…

It’s a great time to buy real estate in Maui.

Condo sales on Maui at a stand still

Serious sellers reveal deals

To see only 29 sales recorded in November is absolutely shocking to anyone watching the Maui condo market.  That is the lowest number of sales in over 13 years. In September of 1995, 29 sales were recorded at a median price of $144,950.

The median price last month on Maui rose to $399,000 up slightly from the previous month.  We haven’t seen medians that low since 2004.

Some sellers are hanging tight.  They have priced their units at 2006/2007 prices and are stubbornly hanging on to some delusional price point.

It is important to point out that those high listing prices do not affect the median selling price.  In calculating the median selling price we only use properties that actually sold.

Over the last few months in particular, we’ve seen significant declines in asking prices.  And we are seeing more price reductions daily.

As a result, there are some unbelievable deals on Maui condos right now.

The Highs and the Lows

Last month a 1 bedroom, 1 bath condo in Kihei sold for $149,000.  This is a tiny unit at only 443 square feet...But it is fee simple and only 3 blocks from Cove Beach.

At the other end of the island and the economic spectrum, you could have picked up a 3 bedroom Coconut Grove condo on the beach in Kapalua for $4.7 million.

Potts’ Picks – Best Buys

Because of what we area seeing, I’m expanding the Potts’ Picks section this month.

With so much for sale on Maui, picking the best condo buy should be a challenge.  It’s not.  The best deal on Maui is Kaanapali Shores 235 MLS #334645.  This is a 2 bedroom, 2 bath unit priced at only $499,000.  The last 2 sales of 2/2’s were at $650,000 and $673,000.

Other picks include:

• Honua Kai 2/2 asking price $899,000, original price $975,000.  This is a new complex so there are a few things you need to know before buying there.  And there are some hidden deals in there as well.

• Hale Kai 1/1 oceanfront fixer priced at $439,000.

• Kapalua Bay Villas 1/1, in the Gold Program, on the ocean, $995,000.

• Three Kapalua Golf Villa 1/1’s for $599,000 or less and a 2/2 for $750,000.

• A Masters 1/1.5 on the Kaanapali Hillside for $650,000.

• Opukea 2/2 with some concessions and/or terms, brand new, $399,000.

• Puamana 1/2 with owner financing for $500,000.

• Villas at Kenolio, 3/2 for $400,000.

Additionally, we are seeing short sales and foreclosures in greater numbers than we have before.

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

Homes sales still slow

The true picture shows sales even slower than the numbers indicate

Home sales continued their up and down trend in November.  There were only 64 sales, most in the central area of Kahului/Wailuku. 22 of those were in the “affordable” category. 

If we pull out the affordables, the median price jumps from $475,000 to $609,000.  Still median single family home prices trended steadily down since August.  

Area Sales

The Central area of Kahului/Wailuku accounted for 60% of all sales last month.  

Once you get away from the affordable sales in the central area, the rest of the sales picture island wide is bleak for sellers.

On the west side there were only 2 sales for the month: one in Kaanapali for $2.2 million and one in Lahaina for $1.6 million.

There were 4 sales in Kihei and zero (0) in Wailea. 

Potts’ Picks

There are a number of short sales on nice 3 and 4 bedroom homes in Kihei listed for under $500,000.  One is this 5 bedroom, 3 bath home priced at $500,000.  It is MLS 333711.

If you would like a white paper on what exactly a short sale is, email me and ask for the “short sale paper.”  If you would like a list of distressed properties, email me and request “Maui distressed property list.”

This home on the Kaanapali hillside has been listed for a while, but they’ve had some price reductions and are now below $1,000,000 at $995,000.  4 bedrooms, 2.5 baths, has room for a pool and has decent ocean views from upstairs. It is MLS #324222.

I love this next house.  I used to run by it almost everyday when I was training for the Maui Marathon.  The location, across the street from the beach on Lower Road, the style, everything.  It’s priced at $2.8 million.  That’s not bad in this neighborhood.  MLS  #335068.

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

Land sales suffer most

Prices are down, inventory is up

Sales are slow in every category, but land has probably been the hardest hit.  Last month there were only 4 lots sold, and there haven’t been more than 7 sold in any one month.

There are now 572 lots for sale.  They range in price from $51,000 over on Molokai, to $65,000,000 for the Hana Ranch in, where else, Hana. 

The best buy is a lot we’ve featured before.  126 Kahana Nui Rd, MLS 334250 on Kahana Ridge.  The price has been reduced to $290,000.

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

 Fractionals even slower than general market

A low cost alternative, still a new concept

Fractionals have been a popular way to own property, especially vacation property, on the mainland for some time.  But, here on Maui they are still just getting started. 

They offer good value and may be worth looking into. 

For example, The best buy for oceanfront with a wonderful ocean view is still Kealia.  Starting at $100,000 for a 60 day interval, these are hard to beat. 

See all the fractional listings at MauiFractional.tv.    

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, REALTOR® R(S) 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 Alohapotts.com Inc. in Lahaina and affiliated with Keller Williams Realty Maui, Kihei, Hawaii. 

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.