What’s the current Real Estate Market in Maui?
The market is starting to turn, indicated by the increase in unit sales. While the Homebuyer Tax Credit program has ended, the resulting sales (closings) through May and June will show in the next two months’ statistics.
Anecdotal evidence from agents, lenders and escrow personnel indicate that a good portion of the transactions in process (not yet closed) are outside of the tax credit program, and that there is strong buyer-showing activity that should result in future sales.
Condo median prices are showing some small upticks. The inventory includes many short sales and REO (bank owned) properties that will need to be absorbed as sales before we can move ahead to a more normal marketplace, at which time prices will start to rise. Interest rates have started to rise from historic record lows, which may also motivate would-be buyers to go ahead and buy.
FOR SELLERS: Sellers who don’t really need to sell (just “fishing?”) should stay off the market and clear the marketplace for those who REALLY have to sell. If you are motivated to upsize, downsize or upgrade, selling now will net less, but your next property will cost less. Sharpen your pencil and talk to your CPA and realtor to explore the hidden benefits or consequences. Make no assumptions that will sting later.
To be successful, sellers need to beat competing properties with better property condition, REALISTIC pricing, good marketing, and flexible, creative terms (Seller Second Loan, Agreement of Sale, Lease-with-option-to-buy, and Sale-with-lease-back to seller). Days on Market figures show that properties priced right will sell in a reasonable timeframe. “Priced Right” is still the determining factor.
BEST deals are selling; everything else is getting old. Proactive sellers are getting their properties appraised, inspected and surveyed in advance to encourage knowledgeable offers from realistic buyers. This can prevent unanticipated escrow fallout or buyers whittling your price down during the transaction when previously unknown facts come to light.
Unrealistic sellers continue to be ignored by the market and miss current opportunities that later become woefully apparent. They may even end up in a short sale or foreclosure situation that could have been avoided.
FOR BUYERS: Low interest rates have started to inch up. Buyers should get pre-approved so they can shop in confidence (fewer last minute disappointments due to non-funding loans). More short-sales and foreclosures are happening in the marketplace, yet they can be less of a bargain than they seem, requiring more hurdles to leap and more time (often 4-6 months) to close, if at all. Be prepared, but BE REALISTIC.
First-Time Homebuyers, while the tax credit program has expired, many other programs are available. Attend a workshop, get familiar with the process, get qualified/approved, do your homework to get your own home. Many current owners never thought they would be able to own until they attended a workshop, discovered they could, and are glad they did. This low point in the market is your rare chance, so check it out carefully.
Disclaimer: Zooming in on the figures of a specific geographic area or property type may lead to different conclusions than the overall view. Maui’s marketplace is much smaller than Oahu’s, and a few high or low sales have a greater effect on the statistical numbers without necessarily indicating a big market swing one way or another.
(Excerpts taken from April Statistics by Terry Tolman, Realtors Association of Maui chief staff executive.)