Maui County is the collection of 4 separate islands in the state of Hawaii: Lana’i, Kaho’olawe, Moloka’i, and of course Hawaii’s second largest island Maui. The region is known for stunning landscapes and tropical weather and as such has become one of the top tourist destinations in the United States. Recently, real estate in Maui has begun to see a resurgence and if you’re interested in Maui properties, the Smith Team can give you valuable insight into different regions on the islands.
Sub-regions
Maui is divided into several distinct sub-regions that are defined by major geographic features like mountains or valleys. Generally speaking, each region is met with a unique climate and these regions can be broken down crudely as follows:
- Windward lowlands
- Leeward lowlands
- Interior lowlands
- Leeward High-altitude mountain slopes
- Leeward Low-altitude mountain slopes
- High mountains
Climate
As with all the Hawaiian Islands, Maui’s climate is defined by a two season year. Most of the regions throughout Maui will have mild, consistent weather patterns characterized by warm temperatures and high humidity. However, geographical idiosyncrasies in Maui allow for much more variability in weather patterns than other Hawaiian Islands and rainfall, cloud cover, and winds can differ markedly across regions. Indeed, more than any other of the Hawaiian Islands, Maui’s weather is influenced by marine environments. Weather patterns tend to be determined by elevation and the effect of trade winds and because of the rugged topography of Maui weather patterns are highly variable.
Since the climate in Maui is dependant on the geography, we see patterns emerging in each of Maui’s distinct sub-regions. In the windward lowlands, which are generally below 2,000 feet and located on the north and north-east sides of an island, the weather is moderately rainy as the trade winds bring showers. It’s not uncommon to see overcast skies and temperatures tend to be very consistent.
In the leeward lowlands temperatures during the day are slightly higher while evening temperatures are cooler, on average. For the most part, the weather is dry but it is not uncommon to see periodic rain showers that follow the wind patterns. The interior lowlands are marked by more variable weather and this region will share weather patterns with other lowland sub-regions. Strong afternoon showers and hot afternoon weather is quite common.
The highest rainfall averages come in the leeward high-altitude mountain slope regions. Cloud cover is predominant and extensive rainfall is observed year round. The temperature is usually quite mild while humidity is relatively high. On the leeward low-altitude mountain slope side there is also more rainfall but less than on the windward side. Higher temperatures and cloud cover are also common.
Finally, the high mountains of Maui exceed 3,000 feet and as your elevation increases, rainfall decreases quite rapidly. Relative humidity is fairly low but you also see the lowest temperatures in Hawaii. In fact, air temperatures can drop below zero.
Throughout Maui, rainfall is much more common than you would expect. Nevertheless, showers tend to be light and they don’t last long. Thunder and lightening are very rare and during the summer we see dryer weather due to the dominant trade winds.
Economy
In Maui, there are two predominant industries: agriculture and tourism. In recent years, the government has been trying to encourage technology companies to invest in Maui because its business environment is ideal for expansion in such industries. Still, coffee, macadamia nuts, papaya, tropical flowers, pineapple, and sugar are the major exports of Hawaii and this holds true for Maui as well. Maui Land & Pineapple Company and Hawaiian Commercial and Sugar Company are the major agricultural players in Maui. Some 37,000 acres of sugarcane are produced by Hawaiian Commercial and Sugar Company making it the largest operation of its kind in Hawaii. In addition, Maui has become an important location for space research and is home to advanced satellite tracking facilities as well as research and development facilities that are world renowned for data collection and communication support.
As of March 2009, the unemployment rate spiked to a staggering 9% due to growing economic concerns throughout the country and the world. However, over the past several months the island has seen dramatic improvements in industry that suggest unemployment rates will start falling very soon.
Tourism
Tourism is obviously one of the leading industries on the island. The major tourist destinations in Maui include Hana, Lahaina, and Haleakala National Park. Maui is blessed with curving roads, soaring mountains, black sand beaches, and luxurious waterfalls making it a dream spot for any tourist. Visitors tend to congregate around West and South Maui and 2004 figures show 2,207,826 people visiting Maui. By far, domestic tourists make up the bulk of visitors to the island but there is also a thriving cruise ship industry.
Maui Landsat satellite photo source: [1]
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Some good news about home sales has come from the Realtors Association of Maui as figures continued to rise last month. In fact, the sale of single-family homes rose 25 percent compared to a year ago while condo sales jumped a staggering 82 per cent. These increases were unexpected, but welcomed, to say the least.
More importantly, there is some early evidence that prices are starting to rise too. In fact, the average price for a condominium was actually 9 per cent higher in March 2010 than the same month a year ago. The figures show a total of 70 single family homes were sold this March which is 14 more than the total from the same month in 2009. The number of condos sold nearly doubled from 67 last year to 122 this year.
This all means that the first quarter of 2010 saw house sales rise an impressive 42 percent from 121 sales last year to 172 this year. As far as condos are concerned, the figures were also impressively high. In the first quarter of 2009, 259 sales were recorded while this first quarter saw 291 sales finalized.
Without question we are seeing the signs of recovery in Maui real estate. Recently, experts at the University of Hawaii affirmed that the market is rebounding. Economic indicators are improving and this can be seen in the improved sales figures during the first quarter of this year. Still, experts are predicting peaks and valleys in this recovery and the market will likely follow economic trends.
Fortunately, tourism is picking up dramatically and there looks to be an even larger number of visitors coming through as the summer heats up. Obviously, this will lead to increased spending and hopefully a positive impact on the job market. Construction looks to be rebounding the most slowly as the recession maintains its foothold.The national economy is on the rise and with an increase in tourism and the real estate industry improving the light at the end of the proverbial tunnel is certainly in view
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Every year the Hawaii Business magazine painstakingly researches the sales figures of Realtors® throughout the Hawaii area and reports the Top 100 Realtors® in a special real estate issue of their magazine. Despite a struggling real estate market, certain Realtors® have managed to find success even in some of the most difficult areas and Ken Smith is an example of a Realtor® who has been able to maintain strong sales figures. But Ken isn’t alone in taking credit for these accomplishments; indeed, the entire Smith Team, namely Ken, his two sons Greg and Jeremy, and his daughter-in-law Melissa have all contributed their skills and resources to make this team a success.
The Top Realtor list is compiled for Hawaii Business magazine by Grant Thornton LLP, one of the leading global tax, audit, and advisory firms in Honolulu. By collecting data about various Realtors®, specifically their total sales volume in the single family and condominium home resale market, the list is created and represents one of the only objective reviews of Realtor® performance. The public listing is an acknowledgment of the fine sales skills of the top Realtors® in Hawaii.
Moreover, the list is meant to represent only sales by primary listors and original developer sales are not included in the figures. In 2009, the Smith Team accumulated a total of $19.27 million in sales and securing them a spot on this year’s list of Top 100 Realtors®. These Realtors® will then be celebrated at an exclusive event at the Royal Hawaiian Hotel.
Perhaps most importantly, this honor acknowledges the hard work and dedication that Ken Smith and his team put into their work. Despite falling sales figures in the overall real estate market, the Smith Team has been able to successfully sell homes throughout Maui. Even in the most trying of times, they work tirelessly to meet the needs and expectations of their clients. The Top 100 list released by Hawaii Business magazine proves that the Smith Team has the skills to negotiate fair sales even in the most difficult economic climate.
As the real estate market in Maui and throughout Hawaii climbs its way back from these more trying times, look to Ken Smith and his team to improve on their successes. The next several months should be a very interesting time in Maui real estate and there’s no doubt that the Smith Team will be leading the charge toward recovery.
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The past couple of years have marked trying times in the state of Hawaii but many will be happy to hear that leading economists are pointing to early signs of recovery. The University of Hawaii Economic Research Organization announced that despite low visitor figures, Hawaii is on the path to recovery.
As the tourist industry continues to slump, experts from the University are predicting a 2.9 per cent gain in arrivals for 2010 along with improvements in gross domestic product (GDP). Indeed, figures for Hawaiian GDP call for a contraction of about negative 0.2 per cent this year but point out that this is actually an improvement on the 1.3 per cent contraction that was estimated for 2008. Likewise, 2009 saw a GDP contraction of 0.4 per cent so while economists are cautiously optimistic there are early signs of improvement. Moreover, by 2011 these same economists predict GDP growth of 0.5 per cent.
The past year has certainly been a turning point for many businesses in Hawaii. The mostly unexpected economic downturn has prevented development and wreaked havoc with the tourism industry. Yet, as world and national economic conditions continue to improve, leading economists see bright things for the future of the Hawaiian tourism industry. At the moment, Hawaii is still suffering from serious state budget woes and job loss statistics whose impact is just starting to be felt.
Still, the University of Hawaii Economic Research Organization sees improvement in jobs figures in the near future. This year may see continued job losses, up to about 0.8 per cent, but as tourism improves the main job sources in Hawaii (retail, the visitor industry, and government) will see more jobs returning to the market. And while noticeable increases in jobs isn’t forecasted until 2011, visitor spending, construction employment, and building permits all seem to be recovering suggesting more future jobs.
Even inflation has been halted by the struggling economy, but the University is expecting a slight bump in inflation this year.
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Have we hit bottom yet? That is one of the most frequently asked questions we get.
For the answer to this question, one should look at the statistics and see how they compare to past cycles. When you do that, we believe the data suggests signs that this current phase has indeed bottomed out.
For those of you have the time and interest, we highly recommend you listen to the Video presentations on the State of Real Estate 2010 by an esteemed panel of experts. Once you have done that, we would appreciate your feedback, and the conclusions you came to.
We don’t expect to see a quick recovery on Maui due to the large number of foreclosures that are still in the pipeline, but at least the light and the end of the tunnel has gotten much brighter.
Have a wonderful week!
Mahalo Nui Loa,
The Smith Team
P.S. New Website Feature - We are very excited to announce that you can now pull up Comparable Sales information on our website. Once you do a search based on the criteria you selected, click on any one of the properties that came up and hit View Details. You will then see links in the Property Information Section (Just Above Remarks) as well as above the photos. The comps shown will be to all sales within the last 6 months reported in our MLS. Also, after being down for awhile, we again have the information from the Public Tax Records for all properties on our website. Click here for a sample.
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Have you noticed that our introductions seem to be getting shorter and shorter? The reason is that as the market has improved, we have become so busy, it is a full time job just keeping up with the e-mails, offers, and escrows.
Don’t get us wrong. We are not complaining. In fact, we are delighted by the tremendous increase in e-mail inquiries and new business.
Sometime within the next week, we are hopeful to roll out a new upgraded version of our website that will allow you to search sold comps going back 6 months. We are in Beta testing right now.
It is desire to provide you with the most up to date and complete information possible, so you can make an informed decision on buying and selling real estate on Maui. If there are any specific requests you might have, please let us know.
Have a wonderful week!
Mahalo Nui Loa,
The Smith Team
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Obviously, the resort real estate market throughout Hawaii has seen better days but some indications are suggesting the worst is over, or at the very least is nearly over. There are still gains to be made but some analysts are reporting that the evidence points to the market hitting bottom in the final quarter of 2009.
For three years from the beginning 2005 to the end of 2007 resort real estate in Honolulu was flying high. Resort residential real estate brought $2.5 billion or more in each of those years while 2008 saw that number drop to $1.7 billion and an even further drop to $1.3 billion in 2009. These real estate woes were experienced country-wide in conjunction with failing financial markets.
However, signs of a turnaround seem clear. While average prices dropped nearly 20 per cent over 2009 resort real estate prices continued to rise and this despite a major drop in the number of sales. However, these figures give conflicting pictures as developers hurried to complete project all over Hawaii and many of these units had been sold in advance for higher prices. In fact, some of these units would have been sold as far back as 2006 when the markets were booming.
As the past 2 years have made their mark on the financial and real estate markets, average prices are starting to be a little more realistic. Some of these properties that were sold aren’t manageable by the buyers anymore so they go back to the developer and it returns on the market as a resale. Even if the units are brand new, they’re selling for less.
In 2009, the average closed price actually dropped compared to the 2008 figure of $1,552,536 to $1,240,831. Typically, the resale market isn’t affected by developer closings. Most of the drop in prices seems to have happened between the middle of 2007 and the middle of 2009 but they’re starting to stabilize. In fact, as these prices have leveled out, sales have increased from around 125 per quarter to nearly 200 in the final quarter of 2009.
In addition, there appear to be a lot more people in the market looking for a great deal. These bargain hunters have money to spend and they may be the motivating factors in market turnaround.
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Right now is a very exciting time in the Maui real estate market. On the heels of a dramatic economic downturn, Maui has entered one of the most obvious buyer’s markets in the history of the island. A number of factors, including government incentives, lower prices, and lower interest rates have helped to re-ignite the market by making new homes or condos more affordable than ever.
Recently, the government has announced that the First-Time Home Buyer Tax Credit will be extended until April 30, 2010, meaning new buyers have access to an $8,000 tax credit. Moreover, the government’s stimulus package provides current home owners with a credit of up to $6,500 on homes purchased between November and April 30, 2010. Combined with increased income limits that gives access to these credits for single buyers earning up to $125,000 and married couples earning up to $225,000, these credits represent a substantial savings for many potential buyers. While the real estate market is relying on customers taking advantage of these savings, there is no question that many buyers are benefiting.
These savings are bringing buyers back into the market and sales figures prove it. Residential sales, condo sales, and land sales are all up in February. In fact, condo sales for February marked a 12-month high which was unexpected to say the least. Most experts agree that these improving figures are associated with tax credits and lower interest rates. At the moment, all the figures point clearly to a buyer’s market. Housing prices are rising and homes are not staying on the market as long as they have been, but it’s still a very affordable time to buy. In general, sales are up and prices are starting to recover but these figures are still low compared to the market before the economic downturn.
So what does this all mean for buyers and sellers? Clearly, the market is starting to recover. Currently, Maui is just beginning to climb out of the worst real estate market in 20 years. Prices are slowly starting to improve but there are a number of short sales and bank-owned properties before the market makes a total recovery. As far as sellers are concerned, you should stay off the market unless you are highly compelled to sell. Sellers who are looking to take advantage of a good deal on a new home should expect to get slightly less for their own home but the savings may warrant it in the long run.
If you need to sell your home, you should be ready for a lot of competition. The condition of your home, pricing, marketing, and flexibility can help you make the sale. Making your home stand out from the rest is as important as realistic pricing but if your asking-price is too much it will be very difficult to sell. Be proactive when selling your home by having your home appraised and inspected in advance. Interested buyers will be impressed that you can provide this information and you’ll stand out in their minds.
Buyers are in a considerably better position, for the moment. Low mortgage rates and all the tax credits are obviously motivating factors to buy but there is also a lot of inventory at the moment an average prices are still down 10 to 20 percent across the island. Especially for first time home buyers, the opportunity to get into the market is not likely to be seen again and it’s also not likely to last long. Most real estate professionals are already seeing improvements in market conditions and over the next year or so we’re likely to see prices increase substantially. Get pre-approved and start looking into the market now.
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- Feb
- 25
Multi-Generational Living
Multi-Generational living may be a new trend in real estate; however, here on Maui, this has been a very common theme for a long, long time.
There are two very important reasons for this. The first reason is economic. With the high cost of living here in the Islands, families often share living arrangements to save money.
The second reason is more cultural in nature. There are many families with Hawaiian and Asian descent in our population. They have a very strong cultural tradition for this type of living arrangement.
In fact, the term you often see used in Hawaii is “Ohana”. The term “Ohana” literally means family. It has come to mean any type of separate living arrangement either inside the home or a detached cottage. Typically these Ohanas have their own kitchens.
If you are looking for a home with an Ohana either for economic reasons or to share with another family member, please allow us to help you find the ideal property for your budget.
Have a wonderful week!
Mahalo Nui Loa,
The Smith Team
P.S. We are very sad to report the loss of a dear friend and colleague, Betsy Jacobsen who died several days ago. Our heartfelt prayers are with her family. Happy trails Betsy.
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- Feb
- 22
Shadow Inventory
There has been a lot of talk about “Shadow Inventory” recently. This refers to properties with delinquent mortgage loans.
It is currently estimated that there are 7.7 million properties with delinquent mortgages, and that over half of these, approximately 5.5 million will end up being foreclosed on in the next two years.
According to a new study by John Burns Real Estate Consulting, the “Shadow Inventory” will not hurt the market because there is strong investor demand.
This has certainly been the case here on Maui, where well priced REO or short sale listings are receiving multiple offers.
An example of that was a 3 bedroom 2 bath 3 year old starter home in Wailuku where the price was reduced to $299,999. Within only a few days there were 14 offers, most of which were above the asking price.
Have a wonderful week!
Mahalo Nui Loa,
The Smith Team
P.S. Tired of the snow. Come warm up in beautiful, warm, sunny Maui. It’s a great day to be living in Paradise.
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