The first half of 2010 has brought a marked increase in sales activity in Maui’s residential real estate market. In fact, single-family closings have increased by 42.6% to 422 as compared to the first half of 2009 when there were 296 closings. Condominium closings have experienced an even greater increase, rising 63.6% to 666. However, while sales activity has shot upwards in recent months, the same cannot be said for Maui’s residential real estate prices.
While the average price of a Maui residential home is now $768,866, an increase of 2%, condominium prices are down by 11% to an average of $756,119. Many who are actively involved in Maui’s real estate market believe that the current pricing situation is not likely to improve significantly until the number of distress sales has gone down. As a result of the economic downturn, many homeowners have found themselves in the difficult situation of having mortgages that are more than the current value of their home.
This unfortunately common scenario has lead to a shortage of clean offerings and a high number of short sales. One of the major problems with short sales is the fact that they can be stalled or frustrated when second mortgages are involved. However, many local real estate professionals are now taking steps to become educated on the short sale process which will hopefully lead to better management of such sales and, in turn, market improvement.
Despite the static nature of housing prices, Maui’s real estate market has seen increased turnover in most residential areas, especially in Maui Meadows, a South Maui subdivision where closings have increased from two to 11 in just the past year. Wailea-Makena and Kaanapali have also experienced marked sales increases, with Wailea-Makena’s sales doubling to 18 and Kaanapali’s sales doubling to 12.
While most areas have seen housing prices drop or remain relatively the same, there are some exceptions. Prices for single-family homes in East Maui’s Haiku, for example, have risen 10% to $607,000 and those in West Maui’s Lahaina have increased 8% to $947,000. However, the median price for a Maui single-family home, including the Molokai and Lanai markets, has dropped nearly $35,000 to $469,000, and it is expected that it will still take some time before Maui’s housing prices begin to experience the same strong upward trend as the market’s recent sales activity.