As high season commences in Maui and visitors flock to enjoy what the Valley Isle has to offer, the most common question becomes: “So how is the market?”. With many sectors of the market being segmented and experiencing significantly different levels of sales activity and valuation, it would be overly simplistic to paint broad statements across the marketplace. But as always, looking at data can show trends on which to base educated opinions.
For example, the Maui real estate market has seen a significant reduction in the amount of properties listed. In 2010, there were a total of 1,809 single family residences (SFR) listed, whereas 2011 decreased by 16.6% to 1,527. And the condo inventory saw an even more drastic decline, from 2,362 in 2010 to 1,821 in 2011, a decrease of almost 23%. The Wailea/Makena market experienced a similar decline, with SFR’s decreasing from 77 to 62 and condos going from 253 listings to 201.
Maui Real Estate Inventory Comparison
In addition, volume of sales is a good metric to gauge how well the market is absorbing inventory. In 2010, there were 812 sales of SFR’s, increasing in 2011 to 896. Condominium sales remained virtually flat, from 1,148 in 2010 to 1,152 the following year. The Wailea/Makena district remained flat, with 2010 having 28 SFR’s and 104 condos sold, compared to 2011′s 29 SFR’s and 103 condominium sales.
Furthermore, one of the key aspects of analyzing the real estate market is seeing the average and median sales prices. In 2010, SFR average sales price was $745,367 with a median of $460K, compared to $788,115 average and $432,250 median in 2011. Condominiums show a decrease from an average of $647,582 and median of $377,500 in 2010 to $486,212 and $310K, respectively, in 2011. The Wailea and Makena market experienced marked improvements, with 2010′s $3.796M average and $1.699M median for SFR’s increasing in 2011 to $4.146M average and $2.1M median; condos remained somewhat flat with 2010′s $1.525M average and $852K median comparing to 2011′s $1.548M average and $900K median. However, as a caveat, it is important to note that average/median sales price are not altogether reflective of declining or increasing values, as they are more indicative of the type of properties selling and can be swayed by a handful of sales (such as the Honua Kai effect and the record-breaking sales in the past 2 years).
Lastly, for many potential buyers, ‘Foreclosures’ and ‘Short Sales’ are the buzz words of the day, as typically they present particularly strong values in current market conditions. Many experts predicted that Hawaii’s Act 48, enacted in May 2011, would have a significant impact on the amount of REO’s that came on the market, as the bulk would now go through the longer, more costly judicial foreclosure process. The theory was that now that it was more expensive and it would take longer to judicially foreclose on a property, lienholders would now be more open to negotiating on short sales. However, the numbers tell a different story (at least so far). In 2010, there were 259 single-family residence REO’s listed and 266 condos, but REO’s rose in SFR listings to 291 and remained relatively steady in the condo market, at 250. Interestingly enough, new Short Sales came on the market at a much slower pace: In 2010 there were 277 SFR and 304 condo short sales newly listed, but 2011 short sale new listings decreased in SFR’s to 221 (21% less) and a shocking 198 condos (a decrease of 35%).
Maui REO’s (Foreclosures/Bank-Owned) and Short Sales Comparison
The Maui real estate market, long known to be a long-term equity market, still presents some excellent opportunities for buyers, but the guidance of an experienced Realtor with specialized expertise in the subject area is critical in a successful real estate transaction. Contact a member of Island Sotheby’s International Realty to discuss your real estate objectives.