Buy now at the low point in the market
Here is some interesting sales information compiled by Terry Tolman, chief executive with the Realtors Association of Maui:
In December 2011, residential sales rose slightly to 78 homes sold, while condominium sales rose to 87 units sold. Land sales for December came in at eight lots sold.
December median sales prices: the residential home median price declined to $405,500, while the condo median price rose to $304,000. Land median price was $362,500.
Year-to-date: comparing January to December 2011 to January to December 2010, residential unit sales rose 10 percent to 898, the average sold price was $787,552 (+5 percent), the median price was $433,500 (-6 percent) and total dollar volume sold was $707,221,757 (+16 percent).
In 2011, condominium sales rose slightly to 1,155 units (+1 percent), the average sold price was $485,874 (-25 percent), and the median price was $310,000 (-18 percent). The total condominium dollar volume sold was $561,184,549 (-25 percent). NOTE: The majority of condos on Maui are second homes or investments and experienced a steeper price drop as Mainland owners “let go” of them in order to keep their “primary” residences on the Mainland.
Additionally, extensive new development sales at Honua Kai during 2009-10 totaling $488,312,327 make Year 2011 look pale in comparison.
For vacant land, note that vacant land sales are such a small sampling that statistics in this property class are not necessarily reliable indicators. Vacant land lot sales increased (+9 percent), the average sold price was $616,307 (+24 percent), the median price was $305,000 (-25 percent), and total dollar volume was $75,805,725 (+34 percent).
Total sales for immediate past 12 months: residential – 898 (with 45 percent being REO or short sale); condo – 1,155 (34 percent REO or short sale); land – 133 (23 percent REO or short sale). REO stands for Real Estate Owned by a bank.
Currently, well-priced properties in great condition are seeing multiple competing offers.
Inventories have declined 18 percent over the past 12 months in residential and condominium classes.
Many short sales and REO (bank owned) properties will need still need to be absorbed.
Interest rates are remaining near historic record lows, which may help motivate would-be buyers to go ahead and buy, provided that they can qualify for a loan.
Very low interest rates prevail; however, they could inch up. Buyers should get pre-approved, so they can shop in confidence. Lenders are much more stringent now on requirements for loan approval.
AS Economist Paul Brewbaker said in his 2009 talk to Maui Realtors, there will be maybe three or four opportunities in an adult’s lifetime to purchase property at the low point of a market cycle. This low point in the market is your rare chance – do not miss your opportunity.