August Real Estate Stats

There were 74 homes sold last month with a median sales price of $521k.  Last August, there were a total of 81 sales at a median price of $410k. This is a 9% reduction in sales volume and a 27% increase in median prices.

97 condos sold in August 2012 with a median sales price of $344,900. In August 2011, the numbers were 86 condos sold at a median price of $266k. This calculates to a 13% increase in activity and a 30% increase in medians.

There were 13 land sales last month with a median price of $350k. Last year, there were 11 sales with a median price $180k.

Here are a few other notes from the monthly sales numbers.

There were 55 REO sales & short sale transactions this month. 41% of all the home sales were REOs or short sales and 25% of all of the condo sales were REOs or short sales. While this is still a substantial component to our transaction volume, it is well below the 52% and 35% of the transaction volume  in August 2011.
Short sales continue to encompass a majority of these sales. Last year, bank owned sales activity outpaced short sales. Banks appear to be trying complete more successful short sales. Which is good news for distressed sellers.

The highest priced home sale last month was $5.9m for an exquisite oceanfront estate on Halama Street in Kihei. The highest sales price for a condo was $3.1m for a three bedroom condo at Papali Wailea.

Luxury activity was down compared to last year. There were only two homes that sold for over $2m and two condos that sold for over $1.5m. Last August, there were four homes that sold for over $2m and four condo sales  for over $1.5m.

What does this all of this mean for Maui real estate buyers and sellers? Buyers will  still find opportunities in this market, but for many market segments the best opportunities require diligence, advanced preparation and quick action. Inventory is down in segments of our market. Well priced properties in these segments are going under contract quickly after being listed. Buyers should be pre-approved for financing or have their proof of cash funds available before submitting contracts. Sellers will have to adjust their strategy by motivation and market segment. Motivated sellers need to price close to comparable sales to generate market activity.

Have questions about Maui’s real estate market and need expert advice?  For all of your Maui real estate services, please contact Michele Muir White R(S), ABR, SFR Coldwell Banker Island Properties, Wailea 808.298.8448, e-mail:  Access the Maui MLS www.Maui

Enforcement Unpermitted Vacation Rentals

Advertised Unpermitted Vacation Rentals to be Taxed at the TVR Rate
August 20, 2012

Portions of this Blog courtesy of Dave DeLeon, Community Affairs, Realtors Association of Maui

Recently Maui County passed its Short Term Rental Ordinance. The Ordinance includes a tough enforcement section. Specifically, the ordinance provides that if you are actively advertising a vacation rental on a residential property, that advertisement will be deemed as conclusive evidence that you are in fact doing that.

This enforcement aspect of the ordinance was driven by the complaints from Maui residents that the County was not making any effort to enforce its residential code. The Council took that testimony to heart and balanced the creation of the new permitting system with a strong enforcement section. The Council funded new enforcement personnel to give the Planning Department the capacity to actually implement this new enforcement approach.

The Arakawa Administration has made it clear: this was not going to be a return to the Tavares Administration’s war on vacation rentals. The effort would start with a soft touch – those found to be violating the rule will be given notice that there is now ordinances for both B&Bs and Short Term Rentals (STRs) and if you are going to continue to provide those services, then you need to apply for a permit.

Additionally, those found to be operating will also be taxed at the rate for Short Term Rentals, which actually has not been set by the Council yet.

County Finance Director Agsalog is working with a 200-page document authored by the Planning Department that provides him with a list of non-permitted short term rentals being advertised on the internet. As is required by the Short Term Rental ordinance, the Planning Department created this list to ensure that the appropriate real property tax was being assessed to these property owners. The list would also be shared with the state Department of Taxation” so that department could make sure these businesses were paying the appropriate General Excise Tax and Transient Accommodations Tax for the advertised rentals.

The Planning Department identified 270 unpermitted vacation rentals advertising on the web.

For those owners who are advertising vacation rentals but have not applied for the required permits, they may receive a letter from the County giving them notice that vacation rental activities require a permit, which is now available. Enforcement will follow if the owner fails to comply.

The Real Property Tax Division will be assessing the “appropriate” tax rate for this tax year for properties found advertising. So even without a permit, vacation rental operators can expect to see their taxes going up. If an owner gets such a notice, they will have 30 days to appeal if they believe the finding is not correct.

Short Term Rentals are investment properties which are usually totally rented for vacation use. By contrast, by definition the owners of Bed & Breakfast operations must actually live on the subject property. In recognition that these properties are the owners’ homes, the Council has given them a rate below the existing Residential (non-homeowners) rate. The Commercialized Residential (aka B&B) rate is $4.50. The Residential rate is $5.75. So if an owner is vacation renting on a property where he lives, it would make sense to get a B&B permit rather than be forced into the higher yet-to-be-determined STR rate as a result of enforcement.