Do you spend your winter in Arizona or Maui, that is a heck of a choice to have to make. Warm weather in both places, lots of sunny summertime activities to be had while the rest of the nation is in a deep-freeze, so why would one pick to spend their winter in Maui over Arizona?
Maui is a temperate climate all year round, with winter being no exception. While Maui will get snow in the winter, that snow is limited to being at 10,000 feet above sea level, at the top of Maui’s inactive volcanoes. For a special treat, be sure to make the trip to the chillier airs and watch a sunset unimpeded by buildings or land.
Maui has their best surfing season in the winter, as large swells are popping up all the time, much to the delight of avid surfers. Grab a board and head out yourself, if you have the experience, or sit on the beaches and watch the pros hone their skills, taming the waves while thrilling the crowds.
Winter in Maui also brings pods of whales to the water island, as the ocean giants make the shores of Maui part of their annual migration route. Watch as these massive creatures play and splash about in the water, or take a boat trip and get a little closer. Nowhere else in the world does such a large group of these gigantic animals collect, so for the person who enjoys seeing the spectacles of nature up close and personal, Maui offers the single best whale watching experience a person could hope to witness.
From snow-covered mountain top sunsets to warm water beaches, from whale watching to surfing and swimming, Maui has a wide variety of activities to keep the warm-loving winter venturer excited, inspired and confident they made the right choice in where to spend their winters.
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When deciding between a winter home in Maui or a winter home in Florida, there are a couple things to consider. When on Maui, you are on an island and to get to the mainland is a plane trip away. In Florida, you will be on the mainland but may find yourself dreaming that you’re on an island. Living in Maui for the winter is how to make that dream come true.
With beautiful weather all year long, Maui has something for everyone, from snow on the mountain peaks to warm water for swimming in the valley. There are plenty of activities for the winter homesteader on Maui, and everything you will need is either a short walk or bicycle ride away. The cost of driving around is a little more expensive on Maui than it would be in the mainland of Florida, but there really is little use for a car with the exception of sight seeing.
If you enjoy surfing, the winter is the best time of the year to catch the big waves off Maui. Huge swells are world renowned and people travel from all over the world for an opportunity to catch one of the big waves. If surfing is not your activity of choice, you may still enjoy watching those who do it, as their skills and feats are outstanding and sometimes as breathtaking as the crests they ride. If you do want to get in some water time, there are plenty of spots for wonderful activities like snorkeling or swimming.
Winter in Maui is also the best time for whale watching, as the ocean’s gentle giants find their way to the waters off Maui every winter as part of their annual migration route. All you need to do is pull up a chair on the beach and watch as the whales breach and frolic, a word that seems almost out of place when considering the size of these magnificent creatures.
Living on Maui for the winter months is a fantastic choice for the discerning person who wants the best life has to offer.
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If you have been considering buying a home on Maui, some incredible, but extremely limited, deals have become available in Wailuku and Kehalani. Responding to the demands of an interested public, award-winning developer Stanford Carr Development has made available new releases of brand new Maui homes located at The Villas at Kehalani and Ho’ole’a Terrace in Wailuku (Hawaii).
Also available to buyers are some outstanding pricing specials where a new 3 bedroom Phase 1 home at The Villas can be had for the low cost of $474,000. This pricing is a limited time special, and available units are equally limited. These homes feature a 3 bedroom and 2.5 bathroom design, for a total of around 1724 square feet of living space. The homes also have stunning designer features, with select homes also having gorgeous 360 degree ocean views.
Laurie Lee, Principal Broker for the community, says, “We have seen a strong increase in demand for Maui real estate, particularly new construction. Our Plan I new homes offer spacious floor plans that truly feel like a single family home, offering convenient low-maintenance living. The Villas Plan I offer the ideal residence for buyers who want a central Maui location with ocean views at value pricing.”
Kehalani is a community of 2400 homes on 550 acres of beautiful land located south of Wailuku. Touching upon the base of the beautiful West Maui Mountains, Kehalani is a Master Planned Residential Community on Maui and features extensive views, a comfortable climate and an ensured water source. Located on the east side of the West Maui Mountains, Kehalani is one of the coolest places to live in central Maui. Lifestyle features include bike and pedestrian pathways, pocket parks and a wonderful recreation center. Nearby Wailuku complements the new Kehalani community with such amenities as area schools, additional parks and shopping.
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The nation’s housing market is having its road to recovery paved with a new mortgage refinancing program, which was unveiled Monday October 24th 2011. Building upon the successes of the Home Affordable Refinance Program (HARP), the government has introduced some changes to the rules that will allow more homeowners who find themselves sinking further into debt to reduce their debt by taking advantage of much lower interest rates. Qualifications for this new program require the mortgage to be backed by Fannie Mae or Freddie Mac, and must have been originally sold to the Government Sponsored Enterprises (GSEs) prior to May 31st 2009.
The previous guidelines limited the qualifying homeowners to those who owed up to 25% more than their home was actually worth. Under the new revisions, this 125% loan-to-value (LTV) limitation cap has been removed.
There have been other program enhancements designed to address issues that have proven to restrict the program’s impact. Certain risk-based fees have been eliminated, and mortgage insurers can now automatically transfer the original loan’s coverage to the new loan. As well, Freddie Mac and Fannie Mae have eliminated the need for a new property appraisal where there is already an Automated Valuation Model (AVM) estimate provided, and certain warranties and representations on any program refinanced loan have been done away with. The final date for HARP has been extended from June 30th 2012 to December 31st 2013.
The risk of homeowners foreclosing due to strategic defaults will be lowered with the new guidelines. By opening HARP to a larger pool of indebted homeowners, borrowers will be able to get control of their household finances and will be less likely to walk away from a mortgage with negative equity. About 1 million homeowners have already taken part in the program and refinanced their mortgages, and it is estimated that another 1 million homeowners will step forward to take advantage of the program.
You can learn more about the Home Affordable Refinance Program (HARP) here.
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New regulations are being proposed up by Maui County Councilors that will affect vacation rental properties. These new regulations will put into affect several requirements onto owners of short-term rental properties located on Maui.
If the proposals go into effect, owners of vacation rental properties will need to be available 24 hours a day and live within a 20 mile radius of the property they rent out. In the event the owner does not actually reside in the Maui County, the property owner would be required to have an acting property manager who would both hold an active real estate license for Hawaii and live within 20 miles of the vacation rental property.
It has also been discussed to limit vacation property owners to one permit per person. This provision may not affect owners of estate homes, however, as the council is not wanting to punish owners who have spent large amounts of money on non-residential properties.
It can be expected that the legislation will take months to create while the Maui County Planning Committee tries to establish rules, enforcement procedures and a process to allocate permits to short term vacation rental properties found in residential areas. This is not entirely unprecedented, as the council put similar policies into action several years ago for Bed-and-Breakfast establishments, but with the present scenario’s exception that Vacation Rentals can be managed by someone living off-site.
The number of properties an owner can operate has also been a discussion for the Council members. While all members side that vacation rental property owners should be limited to one permit, the council was split with respects to an exception for multi-million dollar home owners. Noting that estate housing would never be used for affordable housing, Council Member Gladys Baisa felt that such a cap on permits would hurt owners currently operating more than one vacation rental. Council Member Mike White also had concerns about the cap, as it could potentially hurt the employment of people already working at such large estate-type vacation property rentals, like housekeepers, gardeners and managers.
The cap concerns are not echoed by all council members. Council Member Joe Pontanilla said, “People who want to operate a chain of vacation rentals should stay within the resort district, where those activities are allowed. If the person owns more than one property that is in excess of several million dollars, then it’s just exploiting Maui County. It’s almost like running a hotel. You come here, buy five or six lots, put up million-dollar homes, and then apply for short-term rentals. I think that’s wrong.”
The council eventually agreed on an exception to the one permit rule for houses worth more than 7 times the average Maui home price, putting the value about $3.2 million, as it “…ensures someone doesn’t come in and just buys a bunch of houses for that purpose.” Council Member Mike Victorino said.
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The July statistics for Maui Sales Volume totaled 162 units sold, which breaks down to 65 homes and 97 condos sold. This represents a decline in sales volume over the total for June 2011. The median prices for homes also declined to an average of $410,001, whereas the total average value of condo sales rose to $400,000.
The average Days On Market (DOM) for residential homes was 144, and for condos it was 203. When it comes to DOM statistics, one has to consider whether or not it was NEW or OLD stock that moved, as this will skew the statistics one way or the other, as OLD inventory sales will move the average upward and NEW inventory will move it downward. Another consideration to take into account is that short sales will extend the market’s average DOM, as short sales can take 4-6 months to close.
Being month-to-month timeframe reports do not mirror longer timeframe trends, it is important to do year to year comparisons to realize the bigger picture. When comparing January-July 2011 with the same time frame for 2010, residential sales rose +4% with an average sold price of $780,238 which is an uptick of +2%, an average median price of $441,500 representing a slight downward turn of -6%, but the overall dollar volume of sold units totaled $396,361,086, a +6% upswing. This average includes a bump in last year’s sales due to the 2009-2010 Federal Tax Credit programs, so 2011 numbers may catch up in the months ahead. Sales of condos increased +1% for the same time period with an average sold price of -30% at $510,735, a median price of -23% at $325,000, for a total sales volume of $379,476,462 (-23%). Total sales for the immediate past 12 months are 835 homes and 1154 condos.
Market inventories have declined by 13-20% over the past 12 months, possibly due in part to Act 48, which was signed into law May 6th 2011. With interest rates near record lows, potential Buyers may be motivated to make a purchase if they qualify. With property prices and interest rates so low, now is the time to step up and see what the market holds for the first-time home buyer.
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Act 48 was passed into law May 6th 2011 by the Hawaii Legislature and signed by Governor Abercrombie. The intent of the law was to give lenders and property owner occupants the opportunity to negotiate the terms of the loan when payments exceed the ability to pay. The reality of what the law has brought is more congestion to an under-staffed, over-worked and under-funded court system. By example, effective immediately upon the passing of Act 48, Fannie Mae directed that all its foreclosures must be commenced as judicial foreclosures, and any non-judicial foreclosures that have not proceeded to sale are to be dismissed and converted to judicial foreclosures. as one can imagine, this immediately caused the backlog to grow, and it will only become worse as the days move forward.
There are two types of foreclosures a lender may pursue: Judicial and Non-Judicial. The main difference between judicial and non-judicial foreclosure proceedings is that a deficiency judgment against the borrower can happen, but this would not be the case under a non-judicial foreclosure process. Non-judicial foreclosures have two forms, Part 1 and 2. Part 1 is a fast, low cost option for lenders that does not require court or judicial proceedings. Unfortunately, Act 48 has put the brakes on Part 1 until at least July 1st 2012. Part 2 non-judicial also bypasses the need for a judicial proceeding but was not widely used as it required the borrower to sign and return a conveyance document. However, Act 48 did away with this signature requirement, and Part 2 non-judicial proceedings may still go ahead.
The immediate issue with respects to the fallout of Act 48 will be the sudden reduction in bank-owned property available to the market. We have already seen a huge reduction in the number of such listings in the Hawaii MLS and this will only become more so. Existing inventory will be bought up by those buyers looking for bottom of the market pricing. As the inventory becomes more scarce, the prices will go up for the available bank-owned properties.
Act 48 was a good idea on paper that felt apart in a real world application. An already over-taxed court system has now become even more plugged up, delaying judicial foreclosures by up to 5 years. Delinquent homeowners can rest easy knowing it will be a long time before anyone comes knocking to make them pay or leave. The options for lenders to collect on their dues have been limited by Act 48 and will be further hampered by the court system’s backlog. With no budget to remedy the staffing issues of the courts, foreclosures will sit stagnant for years on end until a proper solution to this present situation is figured out and put into action.
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The July 2011 Sales Volume for Maui Land Sales is a lot like it was for June 2011. The number of lots sold is the same, at 13, with a median price rise to $400,000. The average Day On Market (DOM) was 242. DOM numbers are based on the average DOM of properties that SOLD, so if predominantly Older inventory made up the majority of sales, the indicator would be moved upwards, whereas Newer market inventory would result in moving the indicator downwards. These DOM numbers are derived from information provided by the Realtor’s Association of Maui, who calculate Days On Market from List Date to closing Date (not Contract Date), and include the 60 day average required for escrow. Another consideration, when applicable, is that Short Sales usually require 4-6 months to close, which would extend the market’s DOM.
To gain a greater insight of the marketplace’s longer timeframe trend, it is important to look beyond a month-to-month comparison and do a year-to-year comparison. With that in mind, it is also necessary to consider that Land sale statistics may not be a reliable indicator of the market, as the sample size is typically small. That said, there was a decrease in Land Lot sales in January-July 2011 compared to January-July 2010, coming in at -5%. The average price of a sold lot was up +18% at $620,277, whereas the median price fell -27% to total $330,000. Overall total dollar volume was up +13%, coming in at $50,862,751. When looking at a full 12 month trend, there were 123 Land Lot sales in the past year.
With interest rates at some of the lowest rates ever seen, there has never been a better time for a first time Buyer to get into the market. Workshops are available that will teach the first time Buyer how to get their first piece of the market by familiarizing them with the process. Many owners never thought they would qualify before attending a workshop and discovering that ownership is within their ability to achieve. If you are looking to get into the market for the first time, attend a workshop and see what options and possibilities are available to you.
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Hawaii June 2011 foreclosures are down a whopping 66% compared to June 2010. One year ago, Hawaii was faced with 1000 foreclosures, but June 2011 saw only 344 filings for foreclosures, the lowest foreclosure rate in Hawaii since January 2009, a dramatic drop by any assessment.
January 2009 saw the paperwork filed for a total of 337 foreclosures, at a time when the hill of troubled mortgages was growing into a mountain. Well, it seems the mountain has peaked and, thanks largely to Hawaii’s new foreclosure law, Act 48, which was put into action this past May, lenders are now required to make every effort to negotiate loan modification plans with borrowers. Lenders and borrowers will be able to negotiate these loan modification plans with the state Department of Commerce and Consumer Affairs’ mediation program, a program that will be operational October 1st. Until then, the state Department of Commerce and Consumer Affairs will not be accepting any new out-of-court (non-judicial) filings. Being the majority of Hawaii foreclosures are routed through the faster and less-expensive non-judicial process (when compared to the cost and lack of speed through the court system), Act 48 has effectively stalled any more foreclosures from being filed through the non-judicial process. Instead, lenders have started to file more cases in Circuit Court. However, even with the filings in judicial foreclosures having increased, the total number of foreclosures in Hawaii is down by over 45% when compared to the same month last year.
Judicial foreclosures numbers are derived from new foreclosure filings. Due to the fact that the data numbers include residential and commercial property foreclosures, the numbers do not reflect the exact number of home foreclosures. Of the 344 foreclosures filings for June 2011, almost half were lender repossessions which occur when the property fails to secure a buyer at auction.
The drop in foreclosures have had the added benefit of moving Hawaii from a nationally “12th worst” (May) for foreclosures to the much more palatable “16th best” (June). Nationally, according to RealtyTrac, there is 1 foreclosure filing per 584 households. In Hawaii, the number is at 1 foreclosure per 1500 households, a significant difference against the national average. Also helping the foreclosure numbers is the processing and procedural delays that are causing delays of a year, or even more, against foreclosure filings. “Recovery is unlikely to happen until the current and forthcoming inventory of distressed properties can be whittled down to a manageable number.” James Saccacio, RealtyTrac chief executive officer, said. Thus, anything that can help space out foreclosure filings to allow the process to work through the pile is a good thing with respects to helping get the market back under control.
By facilitating more loan modifications to prevent foreclosures while still allowing lenders to repossess where there is no chance of payment at even with a reduced mortgage, Act 48 will go a long way with helping resolve the foreclosure mess that Hawaii is managing to get control of.
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In June 2011, the Maui County Council Budget and Finance Committee voted unanimously to lower Maui’s homeowner property exemption to 2005 levels. Homeowner exemptions give homeowners a tax break by reducing the assessed value of a home occupied as a residence. If approved by the full City Council, the Committee’s recommendation would mean that the exemption, currently set at $300,000, would be reduced to $200,000. This reduction would take effect in July 2012 and would provide the county with an additional $5.3 million in property taxes if the tax rate were to remain the same.
Since 2003, Maui’s homeowner exemption was raised several times in an attempt to provide relief from skyrocketing property values. In fact, the exemption increased from $50,000 to the current $300,000 in just three years. However, Maui real estate values are now declining and are expected to continue to do so by another five to 10 per cent over the next year. Since declining property values result in lower tax revenues, a reduced exemption would help to offset the lower property values.
However, even when reduced to $200,000, Maui’s homeowner property exemption would still be the highest in the state, with the next highest exemption of $80,000 available in Honolulu. Kaui and the Big Island offer even lower homeowner exemptions, with their basic exemptions set at $48,000 and $40,000 respectively. In addition to offering the highest homeowner exemption, Maui also has the state’s lowest tax rate at $2.50 per $1,000 of assessed value. Again, Honolulu comes in second with a tax rate of $3.42 per $1000 of assessed value.
While Maui’s homeowner property exemption, even if reduced to $200,000, compares very favorably to the rest of Hawaii, it also compares favorably to the rest of the country. Los Angeles and San Francisco, for example, offer maximum homeowner exemptions of $7,000. With a maximum of $12,000, Chicago offers a higher exemption than California’s major cities and yet still falls far below Maui’s exemption. While it is possible to find higher exemptions on the mainland, such as the State of Idaho’s maximum exemption of $92,040, Maui’s exemption still remains significantly higher, even with the recently recommended reduction.
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