Big Island Homeowners May Mediate Foreclosure Action Filed in Court

The Hawaii Supreme Court has issued an order modifying and extending the Third Circuit’s residential foreclosure mediation pilot project for another year. The project’s end date will be March 31, 2012.  The goal of the project is to give Big Island homeowners who have been served with a foreclosure action the opportunity to participate in mediation with the lender and a trained mediator before the case is heard by a judge.
Third Circuit is implementing certain changes to enhance the project’s effectiveness for the second year.  One of the changes makes filing and serving a Foreclosure Mediation Notice and Request Form – along with the complaint – mandatory for the lender’s attorney, or plaintiff. Participation in mediation for the eligible borrower, or defendant, however, is still optional.  A plaintiff who files a request for a default judgment because the defendant did not show up on the court date must also file a Certificate of Service verifying that the Foreclosure Mediation Notice and Request Form were served upon the defendant.  In deciding whether the project should be extended and how it may be modified, the Supreme Court considered information from several sources, including the Foreclosure Mediation Pilot Project Report and feedback from the Hawaii Access to Justice Commission. Both documents are available on the Hawaii State Judiciary’s website.
For more information about the Third Circuit’s residential foreclosure mediation pilot project, call 808-961-7435.


Maui Luxury Home and Condo Market Recovers

The Maui Luxury Home and Condo market has just endured a bumpy roller coaster ride over the last couple of years. This segment of our market was among the most resilient during the end of the real estate boom, especially in the Wailea/Makena area. During 2007 and the first quarter of 2008, luxury homes and condos were still fetching premium sales prices and experiencing stronger sales volume. In contrast, all of this was happening while almost all other segments of the market were seeing slumping sales volume with flat to depreciating prices. As 2008 progressed, the high-end market started to change. Sales volume slowed dramatically. By the peak of the financial crisis in the fall of 2008, sales came to a virtual standstill. Sales remained stagnant throughout much of 2009. While there were some very high-end transactions closing, most of the properties that were closing were selling at substantially discounted prices from the peak.

As we are approaching the close of the first quarter of 2010, will we are seeing some recovery in sales volume. The market is showing signs of modest recovery. Data suggests we may not be quite there yet. We have the same number of home closes over $2,000,000 already for this year that were non-existent last year. There are some suggestions that there may be some additional improvements forthcoming. Barron’s just ran an article on improvements in the second home market. Maui was rated number one on a list of 10 communities as the best places to buy second homes in the country. The article addressed increases in activity among a number of high end enclaves. There are reasons for this increase in activity. While 2008 was a year of tremendous wealth destruction among some of the nation’s most affluent, 2009 proved to be a lot more prosperous. More millionaires and multi-millionaires means more potential luxury home buyers.

As an end note, a Makena Beachfront Home listed for $27,000,000 recently went under contract. If this property closes anywhere near its list price, this sale would set a new high end mark for single family luxury homes. I am continually watching Maui’s Luxury home market. Contact me if you have questions or need assistance. Michele Muir White R(S), SFR, Coldwell Banker Island Properties 808.298.8448,


Maui Resort Real Estate May Have Hit Bottom

Resort real estate market might have hit bottom, analyst reports
By HARRY EAGAR, Staff Writer POSTED: March 10, 2010

The Maui News
The Ho‘olei condominium project in Wailea came on line after the resort real estate peaked in the second quarter of 2007. Now, it appears prices may have bottomed out, according to Honolulu real estate analyst Ricky Cassiday.
The state's resort real estate market is not out of the woods yet, but Honolulu analyst Ricky Cassiday said he believes he has detected signs that it finally touched bottom in the last quarter of 2009.

The woods were dark and deep. Resort residential real estate – both condominiums and single-family houses – did a gross business of better than $2.5 billion in 2005, 2006 and 2007. The slump brought the total down to less than $1.7 billion in 2008 and to $1.3 billion last year.

Cassiday, whose consultancy, Data@Work, sees signs of a turnaround in the price slump. Average prices fell 20 percent in 2009. Despite the crash in the number of transactions, which dropped by more than half, Hawaii resort real estate prices kept going up.

But that was a false signal. Developers rushed to build on all islands, selling units up front for high prices. But it took typically two years to build, and a project begun in the flush times of 2006 looked much different to buyers in 2008.

Some sued or negotiated to get out of or adjust contracts, others faced the prospect of finding loans to close on properties at old prices.

Thus, even in 2008 average prices rose a little, just 1.1 percent.

Now, however, reality has set in. "You bought it three years ago. Now you have to close," said Cassiday in a telephone interview Monday. Or, if the buyer cannot manage it (because mortgages are not so easy to obtain), the developer takes it back, "and it comes on the market as a resale," even if it is brand new.

As a result, the average closed price in 2009 was $1,240,831, down from $1,552,536 in 2008, which was the record year for prices.

That is why Cassiday breaks out the resale market, which "is unaffected by developer closings," separately.

That tells a much different tale. Prices peaked in the second quarter of 2007 at $1.5 million and fell steeply to $1 million by the middle of 2009. Since then, they have stabilized.

And as prices have stabilized, transactions have soared, from about 125 per quarter to about 200 in the last quarter of last year.

Another sign that the market may be getting ready to turn is the appearance of bargain hunters. Whether you characterize them as thrifty shoppers, bottom feeders or vultures, Cassiday said he sees people with money looking around for deals.

Taking the 30-year view, there have been only four periods when average resort retail prices did not rise: a slight but short dip in 1985, a slight but prolonged dip from 1991 to 1996, a short, sharp dip after Sept. 11, 2001, and now the steepest, sharpest drop ever.

That is for the market as a whole. As the resale figures show, the real fall in the perception of values began as early as 2007 and has now lasted three years – about half the length of the mid-'90s downturn.


Maui February 2010 Stats

There were 54 home sales in Maui County during the month of February at a median price of $504,150. That compares to February 2009 numbers of 34 homes sold at a median of $545,000. That means a roughly 59% increase in sales when comparing the February 2009 sales.
94 condos sold in February of 2010 at a median price of $429,000. February 2009 had 84 condos sold at a median price of $692,500. There was a 12% increase in sales volume when comparing this year versus last year.

Land sales for the county remain meager with only 7 total sales for February of 2010 at a median of $350,000. This compares to 6 sales last February at a median of $262,500. This is a 17% increase year to year.
We continue to monitor Foreclosure and Short Sale closings. There were 30 Foreclosure (REO) closes and 21 short sale closings in February of 2010. Of all the home sales last month, 35% were REOs or short sales. 28% of all condo sales last month were bank owned or short sales. With only 7 land sales on the month, it was somewhat surprising to see 3 bank owned closings.
It is always helpful to have a little context on the numbers presented above. The sample size for Maui Real Estate statistics is small enough that there is danger in taking the numbers at face value.

The home sales look good compared to last year. That being said, the first two months of last year were pretty much the absolute doldrums for home sales. We are actually a little behind the late fall and early winter of 2009 numbers. I am holding to my theory that the First Time Home Buyer Tax Credit moved some home buyers schedules up a couple of months resulting in diminished numbers after the credit was originally scheduled to expire.

Condo sales appear to have risen modestly year to year, but a little digging reveals that the 2010 numbers are much healthier than the February of 2009 numbers. I have mentioned the Honua Kai effect numerous times. The February 2009 sales numbers saw a huge bump in sales due to closes in the complex. The 49 Honua Kai closes in 2009 were all based on long term contracts originally written back in 2005. The Honua Kai effect continued in February 2010, but the impact was far more modest with 17 long-term contracts closing at Honua Kai.
The Honua Kai effect is also the reason for the huge difference in medians when comparing February 2009 with February 2010. It is apparent to see how median numbers for last year are inflated when 58% of the condo closes were from Honua Kai. Those sales ranged from $572,900 at the low end all the way up to $4,500,000. This year’s numbers represented a more equitable distribution of sales across all property types with resale activity higher in all segments of the market.

Land sales volume continues to be depressed due to limited demand and financing options. It was interesting to note the high percentage of bank owned sales
Overall, my advice remains constant for buyers and sellers. Buyers continue to see opportunities well below peak market prices with a few exceptionally discounted properties available. The very best deals are going quickly and often with competitive bidding. Sellers need to sharpen their pencils and price wisely. This means pricing at or below recent comparable sales to attract buyers. REOs and developers offering strong incentives make for stiff competition. Both buyers and sellers can benefit by working with a Realtor to navigate this challenging market. I am pleased to offer assistance and have obtained certification as a Short Sales and Foreclosure Resource (“SFR”). Contact me today for responsive, exceptional, and professional service.