In Maui real estate sales figures declined significantly in 2008 and short sales became uncharacteristically common. A short sale is one in which the seller does not expect to receive the full mortgage value for his/her house. As such, lenders must be prepared to release a lien knowing they will not get a full repayment.
Maui real estate had always been quite lucrative and resilient seeing as much as 25 per cent growth in a year. However, such gains have been all but lost except in a few places like Kula. The large condominium projects in Kihei Villages are representative of the market in general and huge price drops as well as short or distressed sales are becoming the norm. Developers are being forced to slash their asking prices across the board.
When reviewing year-end sales statistics from the association’s Maui Multiple Listings Service, the numbers are misleading. Average prices for single-family houses look to have dropped a mere 10 per cent while condo prices have actually risen 13 per cent. While on the Mainland, real estate prices are arguably crashing, the real estate market here appears to be sleeping. The total number of sales has dropped considerably compared to 2007 as there has been a 21 per cent drop for single-family homes and 34 per cent drop for condos.
When contrasted against the 2005 peak in the real estate market, especially for condos, these drops are shocking. In that year, there were 2,050 condo closings which dropped to 1, 187 in 2007 and a mere 788 in 2008. Similarly, single-family sales peaked at 1,136 in 2005 down slightly to 1,142 in 2007 and only 907 in 2008.
Similarly, the median price of a single-family dwelling in Maui County has come down significantly from $630,069 in 2007 to $577,867 in 2008.
However, some real estate experts warn that since Maui is such a small real estate market, housing averages can be easily impacted by a few high or low sales and this appears to be the main impetus for the drop in 2008. A large fraction of closings in 2008 were at subsidized prices, far below the island averages. Spencer Homes’ at Waikapu Gardens accounted for a great number of these closings.
All this change points to a buyer’s market. And for those buyers who purchased homes or condos before the 2005 peak, they should not expect to lose much, if any, on their homes. Reasonably priced homes will sell relatively easily.
Posted in Maui Real Estate |
Read our Recent Newsletter.
Join Our Mailing List and receive your FREE Maui Real Estate Guide now!
