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May 2013 Sales Compared with May 2012 Sales

May 2012                               May 2013
Homes                      64                                             105
Condos                     113                                           140
Land                         16                                              18

There were a 105 homes sold in May 2013 with a median sales price of $540,000. By comparison to last May, there were 64 sales with a median sales price of $381,000. This is a 64% increase in activity and a 42% increase in median price when comparing this May to last year.

There were 140 condo sales for May of 2013 with a median sales price of $381,500. In May of 2012, there were 113 sales with a median price of $336,000. This is a 24% increase in sales volume and a 14% increase in median price compared to last year.

There were 18 land sales sales in May of 2013 with a median sales price of $305,000. In May 2012 land sales were 16 sales at a median of $330,000. This is a 13% increase in sales activity and a 9% decrease in median sales price.

Here are some other numbers that I believe are worth sharing.

May had the highest sales volume for single family homes since June, 2007.
The highest priced home sale in May was $9.9M for a stunning oceanfront Kapalua 6.5 acre estate.
This sale was one of 6 homes that sold over $2M in May, three of the sales were in Kapalua.
The highest priced condo sale was $4.3M for a Wailea Beach Villa.
This sale was 1 of 7 condo sales over $1.5M.
Our luxury market was very active with land 6 sales closing over $1M.

Sales activity in the higher end market is increasing our 2013 sales volume over 2012. Condo sales over $1M for the first five months of 2013 are up 66% over the first five months of 2012. Home sales over $1M for the first five months of 2013 are up 44% over the first five months of 2012.  There were 16 bank owned properties (REO) that closed in May.   During May 2012, there were 32 REOs sales. This is a 50% reduction in REO sales and continues a trend we have seen throughout the year.  I have seen an uptick in REO filings at the Circuit Court.  Time will tell regarding how many of these properties will actually come to market.
There were 22 short sale transactions that closed in May 2013. There were 18 short sales that closed in May of 2012. While the number of short sales was higher this May, they made up a smaller percentage of the overall sales numbers than they did in May of 2012.

May 2013 was a very strong month for sales overall with sales volume topping the May 2012 numbers in all three property categories. An increase in home medians is not an accurate reflection of a change in property values. Most properties on the island are seeing an increase in value. There are some neighborhoods and condominium complexes that are seeing particularly strong increases in prices. That being said, we are not seeing 42% price appreciation. The jump in medians is due to both price increases and a decrease in inventory at the lower price points.  We have also seen some very low  appraisals in certain areas such as Kula.  Sellers still need to be realistic when pricing their properties.

Please contact Michele Muir White R(S), ABR, SFR, Maui Real Estate Guru, Coldwell Banker Island Properties (808) 298.8448; [email protected] for a free consultation and to discuss local market conditions. I look forward to hearing from you.

 

78 single family homes sold in March at a median price of $509,500. By comparison, there were 82 homes sold in March of 2012 at a median price of $435,000. This is a 5% drop in sales activity and a 17% increase in median prices when comparing this March 2013 to March 2012.

101 condo sold with a median sales price of $375,000. Comparing March 2012, there were 130 sales with a median price of $368,043. This is approximately a 22% drop in sales volume and a 2% bump in median prices.

25 land sales closed in March of 2013 with a median price of $535,000. In March of 2012, 22 sales were reported at a median price of $467,500. This is a 13% increase in land sales volume and a 14% increase in median prices.

Here were some other interesting numbers:

This was a good month for luxury condo activity with 11 sales over $1,500,000. Ka’anapali Ali’i saw the most high-end activity with four sales over $1.5M.
There were 13 bank owned (REO) closings. There were 40 bank owned closing during March 2012. This is a 68% drop in bank owned activity for this year.
There were 19 short sale closings. There were 28 short sale transactions that closed in March of 2012. This is a 32% drop in activity for short sale closes.
The 25 land closing was the second busiest month for land transactions in the last five years. The only month with more activity was December of 2012.

General economic news proclaims a strengthening real estate market. Maui’s real estate market is making a come back. The reason why we are seeing the dip in activity in the single family home and condo market is directly related to our low inventory. Buyers in many segments of the market are having difficulty finding properties. This problem is more pronounced at the lower end price points of our market.

Decreasing inventory is a factor in the increasing median prices as well. The effect is two fold. First, there are fewer lower priced properties on the market and consequently lower priced sales. With fewer lower end properties, the median sales price is going to be higher. Second, values are increasing modestly in many parts of the market. The rate of increase is varying widely based on the type of property, price range and geographic location. Lower priced condos are seeing the strongest increase in values. As you work up to the higher priced properties and greater inventory, the increases in value are more modest. At the highest price points in the market, values appear flat.

The luxury condo market was relatively slow through much of 2012. Sales volume decreased at the high end while the overall condo market increased. While we have just seen one month of activity, it is very encouraging to see a significant number of luxury condo closings.

So, what does it all mean for buyers and sellers? Buyers looking at the lower and middle segments of the market will find a very competitive market place. Well priced properties can attract multiple offers and above asking offer prices. Buyers who require financing in this segment are advised to get pre-approved for their purchase prior to beginning their search. As you progress higher in the market, the breadth of inventory increases. Some parts of the luxury market have abundant inventory. That being said, don’t expect to find many distressed sellers in the luxury market. Sellers who have equity in their home, but have been waiting for market conditions to improve may find that now is a good time to enter the market. Strong buyer demand and limited inventory make for improved sales conditions. Sellers should be mindful though that not all parts of the market are the same.

Please contact Michele Muir White R(S), ABR, SFR, Maui Real Estate Guru, Coldwell Banker Island Properties (808) 298.8448; [email protected] for a free consultation and to discuss local market conditions.  I look forward to hearing from you.

There were 64 home sales in February with a median sales price of $550,000. By comparison, there were 79 sales during February 2012 with a median sales price of $492,500. This means a 19% drop in activity compared to last year with a 12% increase in median prices.

There were 100 condo sales in February of 2013 with a median price of $364,950. By comparison, there were 83 condos sold in February 2012 with a median price of $287,000. This is a 20% increase in activity over 2012 with a 27% increase in median prices.

There were 12 land sales with a median sales price of $575,000. The February 2012 numbers were 12 sales with a median price of $575,000.

Some other stats worth mentinoning:

The highest sale for a single family residence  was $4,750,000 (for a 5,018 sf home in Wailea Golf Vistas).
This sale was 1 of 4 single family homes that sold for more than $2m last month. By comparison, there were 5 sales for $2m in February 2012.

The highest condo sale was $4,196,500 for a beachfront three-bedroom at Coconut Grove in Kapalua. (I love this Coconut Grove property. 36 gorgeous villas situated on Kapalua Beach.) This was 1 of 2 condo sales over $1.5m. By comparison, there were no condo sales over $1.5m last February.

There were 9 bank owned sales last month. There were 28 bank owned sales in February 2012. This is a 68% decrease in bank owned sales activity. There were 15 short sales, whereas there were 26 shorts sales in February 2012 . This is a 43% drop in short sale activity.

There was a huge surge in condo sales towards the end of 2012. Some of this was driven by sellers wanting to close in 2012 due to uncertainty over taxes in 2013. Last month, we had a few straggling condo sales. The condo market rebounded in February with a healthy bump in activity. I am predicting a continuation of strong sales for condos over the next couple of months as we finish out our peak visitor and real estate season. The two factors most likely to constrain sales are economic uncertainty due to the sequester and reduced inventory. There is more demand than there is supply when it comes to moderately priced condos on Maui.

The single family home market did not fare as well this month compared to last year. Most Maui communities are seeing tight inventories particularly when it comes to price points below $600k. Last year, there were 625 sales in Maui County under $600k. There are currently only 103 properties active for sale in this range. Based on last year’s absorption rate, that is just under 2 month’s supply of inventory. There is even less inventory in the lower price brackets.

The lack of inventory on the low end is also having an impact on median prices. Fewer lower priced transactions means a higher median sales price. Last February, 40% of the transactions were priced below $400k. This year, that number dipped to 33% of the transaction volume. There may also be some upward movement in median pricing due to price increases. The limited inventory of homes is helping to lift up pricing in the lower and middle ranges of the market. The upward price movement is greatest were supplies are most constrained. Many financed transactions are having a tough time with appraisal if the purchase price is much above recent comp sales.

So, what does this all mean for Buyers and Sellers? Inventory remains the driving force in the market. Buyers who are looking in areas of tight inventory can expect a highly competitive market place.As I have repeatedly advised in the past,  if you require financing, get pre-approved for your loan. Sellers are looking for strong buyers. And this means you must come to the table with strong representation and an agent with keen negotiating skills.

Contact Michele Muir White R(S), ABR. SFR, Maui Real Estate Guru, Coldwell Banker Island Properties, 808.298.8448, [email protected] if you are considering buying or selling property on Maui. I welcome the opportunity to meet and discuss your real estate needs with you.

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83 homes sold November at a median price of $470,000. Last November, 76 homes sold at a median price of $422,500. This calculates to a 9% increase in volume and a 13% increase in median prices when comparing the two Novembers.

96 condos reported sold November at a median price of $390,945. 77 condos were sold last November at a median price of $265,000. This is a 25% increase in volume and a 48% increase in median prices between this November and last November.

22 land sales closed during November of 2012 with a median price of $455,000. There were 9 land sales during November 2011 with a median sales price of $505,000. This is a 244% increase in sales volume and a 10% decrease in median prices.

There were 21 bank owned sales last month. Most of those sales were single family homes, but surprisingly 9 of the 21 were land sales. By comparison, there were 39 bank owned sales in November of 2011. That is a 54% drop in bank owned sales. The lower number of bank owned sales should be a continuing trend with limited numbers of bank owned properties coming on the market. There were 24 short sales that closed last month compared to 22 sales that closed in November of 2011. We are continuing to see a steady supply of short sale closes as banks are working more proactively with homeowners who are delinquent with their mortgage payments.

The priciest home sale for the month closed on Lanai. A buyer paid $4,150,000 for a 5,227 square foot ocean view home in the Manele Bay area of the island. Last November, the priciest sale was $3M for a home in the Pineapple Hill area of Kapalua. Two homes sold over $2M in Maui County including the one on Lanai. There were 10 condos sold in Maui County over $1.5M this November. By comparison, the November 2011 numbers were 2 homes sold and 4 condos sold above those respective price points.

Buyer activity remained strong with 249 properties going under contract during the month of November. This means November 2012 trumped October 2012 for the title of busiest month for new escrows this year. This is actually one of the busiest months in several years. The increased activity is a reflection of a shift in the market.There are quite a few things worthy of discussion in this month’s Maui statistics. The increase in condo medians is a number that jumps off the screen. To be clear, condo values on Maui have not increased by 48%. This is a classic case of medians changing due to big shifts in sales activity at different price ranges. In November 2011, there were ten sales under $100,000. This November, there was only one sale under $100,000. Shrinking inventory at the lowest price ranges combined with modest price increases translates to far fewer sales below $100,000. Conversely, there was an increase in luxury condo sales this month with ten sales over $1.5M. This compares to four sales over $1.5M. More high end sales and less low end activity means a bump in median value regardless of what is going on with property values. While there have been some price increases between this year and last in segments of the Maui condo market, those increases in value have been far less than 48%.

The land market is another segment that produced eye catching numbers with a 244% increase in sales volume. It is important to keep in mind that part of the reason for the dramatic increase can be attributed to the low number of sales in November 2011. We have seen a few small spikes in land market activity over the last couple of years. Most of the spikes could be attributed to buyers responding to values in the market. There were a total of nine bank owned sales in the land market last month, and it can be argued that each of these sales were good comparative values. If the market stays true to recent form, we might expect to see land sales volume dip again next month.With inventory shrinking on the home market, there may be more buyers looking for alternatives in the land inventory.

As noted above, the highest priced sale of the month for Maui County occurred on Lanai. In addition to that home sale, three of the ten condo sales were over $1.5M and were in the Manele Bay area of Lanai. Since Larry Ellison purchased the island of Lanai, and we have speculated that there may be an uptick in the Lanai second home market. It appears that this may be coming to fruition. In the first six months of the year, there was only a single sale over $1M. After Ellison’s purchase, there have been 5 sales over $1M.
Well priced properties are seeing multiple offers. What does this all mean for buyers and sellers? Buyers are continuing to find good values, but constrained inventories among many property types require buyers to obtain pre loan approval. Buyers need to remain proactive so that they can submit offers quickly when the right property comes along. Get pre-approved before you start looking. It will determine your budget and give you a strong position when you submit an offer.

Sellers will need to closely analyze their property segment when determining current market prices. Sellers need to price well. Well priced properties are getting interest. Overpriced properties are languishing. Contact Michele Muir White R(S), ABR, SFR, Coldwell Banker Island Properties (808) 298.8448, [email protected] if you need assistance buying or selling Maui real estate.

 

Investing in real estate is a great way to obtain cash flow and/or capital gains while you have someone else pay your mortgage, but there are also other benefits that you may not have thought about when investing in real estate.

1. Cash Flow

Cash flow is the income that is generated from the rental income after expenses have been paid. This is money going directly into your bank account every month — like an extra pay check.  This can increase over time as rent goes up with the market. Historically rental rates have gone up in Hawaii, so potential exists for your monthly cash flow to increase over time as rental rates rise.

2. Capital Gains

Capital gains or appreciation is the increase in the value of the property over time. We have seen prices double in Hawaii a couple of times in the past and all you have to do is to own the property to take advantage of this increase.  This is an added benefit of owning a real estate investment.

3. Leverage

Using leverage to invest in real estate is a benefit that cannot be attained with other investments. For example, when purchasing stocks it will cost you $200,000 to buy $200,000 worth of a particular stock.  When purchasing real estate, you could purchase a $200,000 investment property but only need to pay cash for 20% ($40,000) of the total property price. If prices go up 5% in this scenario, the increase in value to both the stocks and the property is $10,000, but with a real estate purchase, your only cost is an upfront investment of $40,000 to have the property value increase by $10,000, whereas with the stocks it cost you $200,000 to make the same $10,000.

Even if real estate is a high-cost investment, less out-of-pocket is usually required to purchase an investment. This all depends on your borrowing qualifications with a financial institution.  The amount of cash that each individual buyer needs to have on hand to purchase a property all depends on their personal borrowing qualifications with a financial institution, and the best thing to do is to talk to a loan officer to find out your buying power and to set out your options.

4. Inflation Resistance

Since your monthly mortgage payment is fixed, there is inflation resistance with real estate. Goods and services go up in price, but your monthly mortgage payment does not.  You may actually increase your income when you raise the rent over time for your renters and not for you.

5. Tax Incentives

The not so obvious benefits are the tax incentives: depreciation, business expense deductions, investing tax-free with self-directed IRAs and my favorite, the IRC (Internal Revenue Code) 1031 Exchange.  In an IRC 1031 Exchange, an investor is able to sell their investment and buy other, like-kind investments, tax deferred.

An example of this is a client of mine who had a free and clear property that was in the family since the 1960s and had been rented out for years. If they sold the house and tried to take the cash, they would have been liable for huge capital gains since the property was originally bought for $60,000 and would sell for over $1,000,000 in today’s market. They would have had to pay taxes on the $940,000 capital gains, minus any improvements and monies that went into the property throughout the years which would have hurt any bank account, big time.

Instead, the investor took all of the cash and invested it in a few other properties, tax deferred, to not only raise their monthly cash flow but to diversify their real estate portfolio and position it to take full advantage of long-term appreciation.

You may have a similar scenario — or a totally different one.  If you would like to better position your real estate portfolio to take better advantage of the next, up and coming market, let me help lay out your options using my experience with real estate investments and knowledge with 1031 Exchanges.

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: [email protected]  Access the Maui MLS www.Maui RealEstateGuru.com

There were 95 homes sold during October with a median price of $489,000. Last October, there were 74 homes sold at a median price of $482,500. This is a 28% increase in volume and a 1% increase in median price when comparing this October to last.

94 condos have sold during October with a median sales price of $482,500. By comparison, there were 77 condos sold with a median price of $351,495 in October 2011. This means we saw a 22% increase in sales volume and a 37% increase in median price compared to last October.

Land sales remained slow on island last month with only 7 sales reported with a median sales price of $345,000. This was slightly lower than October 2011 activity when 8 sales were reported at a median price of $465,000.

There were 16 bank owned properties sold last month.  Most were single family homes. By comparison, there were 40 bank owned properties that closed in October of 2011. This is a 60% drop in bank owned transactions. Limited bank owned inventory means that we will continue to see fewer bank owned sales.

October was the busiest month for single family home sales during 2012 and it was the slowest month of the year for land sales. There were 25 short sale transactions that closed in October. There were 33 short sale transactions that closed last October.The highest sale for a home this month was $3,142,730 for a 5,126 sf home on 2.35 acres in the Kapalua Plantation Estates. This was one of 3  sales in Plantation Estates. This is considerable since there were only 19 sales in the subdivision since 2003.

Overall Luxury sales were slower this month. The three home sales over $2M was below the seven sales over $2M last October. There was only one sale of $1.5M in the luxury condo market. By comparison, there were five over $1.5M during October, 2011.

We saw slower activity for luxury  home and condo sales this month. The lower luxury sales volume reflects the continuation of a trend in the Maui luxury property market over the course of 2012. For the year, there have been 35 homes sold over $2M. This compares to 44 sold last year over $2M for the same period. That is roughly a 20% dip in activity. For the Maui luxury condo market, there have been 31 condos sold year to date over $1.5M. This compares to 60 sold during the January through October 2011 period. This represents a 48% dip in activity. While the overall Maui market appears to be trending up, the luxury market is lagging. While there are still some luxury buyers willing to pay a premium, many are still seeking value above all else.

The decrease in bank owned inventory has been part of a general decrease in inventory.

Of the most notable numbers from the October stats is that home sales were higher than any other month of the year. While condo sales weren’t as notable, they still showed quite a spike over the September numbers. Inventory remains low.  Well priced properties are seeing multiple offers.  What does this all mean for buyers and sellers? Buyers are continuing to find good values, but constrained inventories among many property types require buyers to obtain pre loan approval. Buyers need to remain proactive so that they can submit offers quickly when the right property comes along. Get pre-approved before you start looking. It will determine your budget and give you a strong position when you submit an offer.

Sellers will need to closely analyze their property segment when determining current market prices.  Sellers need to price well. Well priced properties are getting interest. Overpriced properties are languishing. Contact Michele Muir White R(S), ABR, SFR, Coldwell Banker Island Properties (808) 298.8448, [email protected] if you need assistance buying or selling Maui real estate.