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.
Posted in Maui Real Estate, Hawaii Real Estate | No Comments »
Read our Recent Newsletter.
Join Our Mailing List and receive your FREE Maui Real Estate Guide now!
A line of around 400 formed outside the Whole Foods Market which had its grand opening in the Maui Mall on February 24th. Shoppers seemed impressed by the variety, quality, and affordability of the nations leading organic supermarket. Customers raved about the freshness of everything from fruit and vegetables to prepared desserts, cupcakes, tarts, and pies.
Various food samples provided customers with ample opportunity to judge the quality of the goods on offer. One particularly popular item was a strawberry shortcake retailing for $17.99. Asked about the prices, customers admitted that they’d expect to pay nearly the same at other big name supermarkets like Safeway.
Nevertheless, not all the reviews were glowing. Some customers complained that they couldn’t find what they had come looking for, especially when it came to more exotic fare. While some of these items may have sold out quickly, others may not be available. Yet, the variety of fresh produce, meats, seafood, and organic goods was enough to keep most shoppers happy.
Some prices at the Whole Foods Market were even considerably lower. Take Synergy drinks which are often sold between $5.50 and $6.50 per bottle around the island were going for $4.49 at Whole Foods. Some customers were skeptical that prices may have been lowered for the grand opening, to entice customers to make a return visit.
The new store at Kahului is actually the second Whole Foods location in Hawaii. The first store opened in 2008 on Oahu and another store is expected to open in the fall of 2001 in Kailua, Oahu.
The Maui Mall store is at the same location where locals found the Star Market. Whole Foods represents 26,366 square feet of organic shopping and employs around 140 people. What locals will be happy to hear is that of the 205 Hawaiian suppliers, 60 of them are from Maui. Clearly, Whole Foods puts an emphasis on local produce, seafood, and other goods.
The store management must have been happy with their first day considering several hundred waited in line to get in. The support for local farmers and the variety of products available likely attracted the crowds.
To get an idea of the variety, you could find 16 brands of yogurt of different types from organic, rice, sheep milk, and even goat milk yogurt. The more carnivorous of us could find prepared baby back ribs, boneless pork chops, turkey sausage and other organic products. Customers were also greeted with seafood and salad bars and a wide selection of olives and more. Prices also compared to other supermarkets.
There were even a large number of prepared or ready to cook meals including meats, pizza, sandwiches, salads, and desserts. You’d find Mexican, Japanese, and European cuisine alongside a coffee bar with all the fixings. Staff members were helpful and ready to serve.
Posted in Maui Real Estate, Hawaii Tourism | No Comments »
Read our Recent Newsletter.
Join Our Mailing List and receive your FREE Maui Real Estate Guide now!
- 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.
Posted in Blog, Maui Real Estate, Hawaii Real Estate | No Comments »
Read our Recent Newsletter.
Join Our Mailing List and receive your FREE Maui Real Estate Guide now!
- 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.
Posted in Blog, Maui Real Estate, Hawaii Real Estate | No Comments »
Read our Recent Newsletter.
Join Our Mailing List and receive your FREE Maui Real Estate Guide now!
While the Maui real estate market has a way to go before returning to peak levels, there were definite signs of improvement throughout 2009. In early late 2008 and early 2009, the housing market was hit hard by the economic downturn. Average prices fell drastically and total sales tapered significantly, but as the year went by, slow but steady improvement defined the market.
Housing construction in Western states, for example, is up 8.9 percent in January 2010 from the previous month, and although the figure is still low from a year ago, this is an early indication that the market is beginning to pick up again. If you look at the same figure but exclude apartments and condos, there was a 21.7 per cent increase in housing starts from January 2009 to January 2010.
The slower West coast real estate market has had a considerable impact on the Hawaii market as out of state buyers have dropped off. Still, the shift to in-state buyers has lead to improved sales, specifically as a result of signs of financial recovery in the stock market, historically low interest rates, and the new Home Buyers Tax Credit. Buyers are now beginning to see that the current market is a very favorable one.
The condo market in Hawaii has remained calm most likely because buyers are looking to cash in on bargain-priced homes but even this market is predicted to recover in the coming months. As construction picks up and development of stores, restaurants, and other community facilities returns to pre-2008 levels, the condo market will recover.
In the meantime, motivated sellers are offering some of the best deals seen in Hawaii in more than a decade. Most sales are completed at about 90 to 95% of the asking price and when you combine this with low interest rates and lucrative tax credits, first time buyers and retirees are confident that they’re going to get a great deal. Moreover, investors are beginning to return to the market as they know that low prices now will invariably lead to big profits down the road.
In fact, the Hawaiian real estate market has been quite stable compared to other states. California, Arizona, and Florida suffered from major market crashes, but Hawaii has managed to maintain a 10 year average with regards to average price and the number of sales. Buyers who continue to wait for prices to drop further are likely to be disappointed.
Currently, the Smith Team has already completed $2,000,000 in sales in the first 6 weeks of 2010 and we have more than $10,000,000 in sales pending. So while many experts continue to be concerned about the real estate market in Western states, the evidence seems clear that Hawaii is poised for recovery. Still, the market is obviously bolstered by the bargains that are widely available and buyers should not wait too long to take advantage.
Posted in Maui Real Estate, Hawaii Real Estate | No Comments »
Read our Recent Newsletter.
Join Our Mailing List and receive your FREE Maui Real Estate Guide now!
Obviously the Maui real estate market has been experiencing some dramatic lows but things appear to be turning around, finally. Compared to the same month a year ago, there has been a 48 per cent increase in house sales.
The strong rebound comes on the heels of big jumps on O’ahu, Kaua’I and the Big Island, marking a huge return after record lows. In fact, January 2009 sales were the lowest since in more than a decade. To see such disappointing figures you have to go all the way back to February 1997.
Another discouraging figure has been the median sales price of homes which have dropped 16 per cent to $469,000 from the figure of $558,000 a year ago.
However, a mere 71 condo sales were recorded last month which represents a 31 per cent drop from a year ago. In January 2009, a total of 108 sales were recorded. Still, this 2008 figure was somewhat surprising since it was the most number of sales since 2007 when the Maui real estate market was still going strong.
In all likelihood, a new condo project in Ka’anapali was responsible for the jump in sales figures. The project, named Honua Kai, boosted sales in January 2008 as previously owned and new homes were both included in the data.
Still, the median price of condos has taken a dramatic hit. In fact, the median has dropped nearly 50 per cent to $424,000 down from $805,000 a year ago. Again, experts attribute the huge difference to the Honua Kai project where eight condos were sold last month for a median of $722,500. Compare that to a year ago when 69 condos were sold for a median price of $1.17 million. Because the median price is the point where half of sales are above and half are below the median, the sale of many luxury condos will force the median price up.
Posted in Maui Real Estate, Hawaii Real Estate | No Comments »
Read our Recent Newsletter.
Join Our Mailing List and receive your FREE Maui Real Estate Guide now!
- Feb
- 12
Maui’s Sugar Future
The economic struggles of Maui have been no secret. Businesses are closing down, citizens are losing their jobs, and real estate prices have fallen drastically. Now, in one more blow to the struggling economy, sugar producers are debating whether there is a future for growing sugar on Maui.
Hawaiian Commercial & Sugar Co. (HC&S) currently employs around 600 Maui residents but has recently fallen on hard times. While the company has been a mainstay on Maui for more than a hundred years, their 2009 third quarter results were dismal and a comprehensive review of sugar operations was set in motion.
At the center of the issue appears to be water. The company is waiting for rulings by the State of Hawaii Commission on Water Resource Management regarding water allocations in East and West Maui which are set to be handed down in early 2010. A favorable resolution is critical to continued sugar operations for HC&S.
Expecting more than $30 million in operating losses in 2009, HC&S has a difficult decision ahead of them. Fortunately, the company is taking a more optimistic approach by basing their decision on their view of the future rather than past financial problems. Recent droughts have brought declining yields making the water issue very important.
Employees are concerned. They are hoping that HC&S will stay in the sugar business long enough to transition into more profitable markets like alternative energy as the future of sugar production on Maui is not promising. There are more than a hundred countries around the world producing sugar; most of them with cheaper land and labor than the United States.
The price of sugar actually rose last year, because of poor weather in countries like Brazil and India which are major sugar-producing players. Unfortunately, HC&S were unable to capitalize on these increased sugar prices because they had sold off their sugar supplies before the spike.
Plus, Maui has been suffering from a serious drought for the last 3 years. During its best year, HC&S produced 227,800 tons but because of the drought were only able to produce 125,000 tons last year. Some experts are pointing out that the commodities often vary drastically from year to year with regards to production. But the concern for HC&S is that they would need to have 4 record years of profit in order to climb out of their current financial hole.
Still, the parent company of HC&S relies very little on farming for profit. Alexander and Baldwin (A&B) credited HC&S with a half a billion in sales which is around 12 per cent of their corporate assets. The trend for A&B in the past has been to sell struggling assets.
At the moment, agriculture accounts for a meager 7 per cent of A&B assets and HC&S is unlikely to positively affect their profits. Even in their best years, HC&S had little impact on A&B’s bottom line while management efforts to improve profitability require a lot of resources.
As such, the argument for selling off HC&S to an owner who would concentrate on sugar production is appealing. But in this case, the land itself becomes a focal point. Part of HC&S sugar plantation land could be developed into homes or commercial property, as has been the trend for A&B. Yet, there is little market for undeveloped land in Maui at the moment.
A&B seems to be committed to maintaining their farming assets. Intending to keep 37,000 acres of Maui sugar land, the company is looking into alternative ways of profiting from farming. Energy alternatives like ethanol is one of the ways they hope to make their land profitable.
Again, we return to the issue of water. A&B is willing to invest hundreds of millions of dollars in developing ethanol and other energy alternatives but only if they’re guaranteed a water source. Environmentalists have been petitioning in recent years to reduce the amount of water available to plantations in order to maintain water flow in streams and lakes.
While they’re not trying to put HC&S out of business, they are also concerned about sustainable fresh water sources on Maui. Currently, the water commission has decided that 13 million gallons of water per day should be saved for streams but is considering raising that amount. Meanwhile, HC&S is asking for a minimum of 13 million gallons of water per day.
Summer droughts have been reducing the amount of available water. The crisis point for HC&S is 20 million gallons of water in the East Maui watershed. The county has access to 7 million gallons leaving exactly what HC&S needs to continue operations. Clearly, the likelihood that the watershed will drop below that level means HC&S is left out in the cold.
So water is a critical issue in maintaining operations and poor weather may be enough to decide the future of sugar on Maui.
Photo Credit: Bret Arnett
Posted in Maui Real Estate, Hawaii Real Estate | No Comments »
Read our Recent Newsletter.
Join Our Mailing List and receive your FREE Maui Real Estate Guide now!
Opportunities abound as more and more Sellers get realistic on their pricing.
With new REO’s hitting the market each week, Sellers are either dropping their prices or accepting offers well below asking. Some of these are on short sale listings, which are not guaranteed of closing; however, what do you have to lose.
With interest rates close to record low levels, now is the time to lock in a great deal before prices and interest rates both go up.
Have a wonderful week!
Mahalo Nui Loa,
The Smith Team
Posted in Blog, Maui Real Estate, Hawaii Real Estate | No Comments »
Read our Recent Newsletter.
Join Our Mailing List and receive your FREE Maui Real Estate Guide now!
- Feb
- 11
Homebuyer Tax Credit
Did you know that you can take advantage of the Homebuyer Tax Credit even if you are not a first time home buyer?
The tax credit which was set to expire on November 30, 2009 has been extended to April 30, 2010, and it has also been expanded to include existing homeowners. Read more.
There is good news in paradise. The market is heating up with sales of homes in January 2010 up 48% over the previous year. Read more.
Have a wonderful week!
Mahalo Nui Loa,
The Smith Team
P.S. Don’t see what you are looking for. E-mail us your criteria and let us see what we can come up with. Currently, we have 6 Bank Owned Properties (REO’s) that are in the pre-list stage. One of these may be perfect for you.
Posted in Maui Real Estate, Hawaii Real Estate | No Comments »
Read our Recent Newsletter.
Join Our Mailing List and receive your FREE Maui Real Estate Guide now!
During the recent recession, affordable housing has become a major concern of local councils. Maui County Council members therefore have been working toward changing the county’s residential work force housing guidelines in order to encourage more development of affordable housing. Members will continue to tinker with the policy which was originally written in 2006 to ensure that as luxury properties were developed so would be affordable housing projects.
Unfortunately, the economy’s recent nose dive hasn’t helped matters much and in its entire life span, this affordable housing policy has only been applied to three housing projects. Many are pointing to these facts as proof that the ordinance isn’t getting the job done. On the other hand, supporters of the ordinance are quick to mention the fact that the poor economy is stalling all new housing projects, not just affordable housing projects. With nobody building due to the recession, little has been done to ensure affordable housing for county residents.
Regardless, something needs to be done to kick start the fledgling construction industry and most people are looking to the government to take the necessary steps to provide housing opportunities for Maui residents. As such, the local government is taking the first steps to revising this ineffective policy.
In their efforts, the city council is reducing the number of affordable homes that must be developed in a new sub-division with five or more homes. Indeed, the first draft of the new ordinance calls for only 25 per cent of new homes in a development to fall into the category of “affordable.” Previously, 40 per cent of new homes in a development were required to be affordable options. If the new ordinance passes, County Council suggests that it apply only to projects in which the houses are expected to bring in $600,000 or less in the open market.
Last year, the average single-family home in Maui sold for around $720,000. With regards to the existing law, when a developer works on a project with market rate homes starting at more than $600,000 at least 50% of these properties are required to be affordable.
Essentially, changes to the affordable housing policy are being lobbied for by local developers and contractors. Hoping for the limit on affordable homes to be lowered to 15%, developers are arguing that the county needs to do something to get construction back on track. New construction will provide new jobs as well as affordable homes.
However, not everybody agrees with these changes. Non-profit organizations and charity groups would prefer a higher threshold, perhaps 30 per cent. As you can see, the county is faced with the challenge of making a compromise. The county needs to take the necessary steps to increase construction but without giving developers the opportunity to take advantage of any loop holes and create neighborhoods only for the wealthiest members of society.
There are also problems with the language of the ordinance that makes it difficult to understand. When a developer works on a project of 100 homes, they can build the affordable homes either “on-site” or “off-site” and this changes the requirement for affordable homes. At the moment, a company can build 100 luxury homes and then have the choice to build either 25 affordable homes at the same site or 40 affordable homes at another site in the same planning district. Local groups want the requirement for off-site affordable homes to be raised to 50 per cent. But some locals are concerned that these kinds of laws will lead to class segregation where luxury homes would be built in one neighborhood and affordable homes in another. The idea of homogenous neighborhoods is a concern because of the difference in community services often seen in neighborhoods of varying wealth.
Nevertheless, the county voted 5-0 in favor of the current ordinance changes and the mayor gives them full support. Over the past year, developers and real estate representatives alike have been submitting proposed changes to this work force housing policy as they want to lift deed restrictions and get rid of a companion law that would force developers to provide their own water sources.
Approximately 3,100 homes have been proposed since the work force housing policy was passed but some of these projects are still in the planning phases while others have lost funding or are hoping for the market to improve before they proceed. Other changes that might be accompanying the housing ordinance are geared to encourage development of affordable housing while preventing owners from selling these affordable homes at market rates.
Posted in Maui Real Estate, Hawaii Tourism | No Comments »
Read our Recent Newsletter.
Join Our Mailing List and receive your FREE Maui Real Estate Guide now!
