Is Maui’s real estate market already heading back up?
The real estate “market bottom” is a HISTORIC DATE. No one will know when the market has hit bottom and headed back up. Only time will tell the approximate date the real estate market has truly bottomed.
As is with the stock market months after the bottom, statistics will show that the market dropped to a certain level and then did not go any lower. The same is true in real estate – you do not know the bottom until it has passed you by.
Today, we see many buyers waiting for the bottom of the real estate market to arrive. Why would it be prudent to buy before the market bottom? 1) Good interest rates; 2) Large inventory of homes for sale; 3) Fewer buyers in the market and less competition; 4) Anxious sellers willing to negotiate.
How will the market differ once the bottom has passed, the market is firming and prices are rising? 1) Rising interest rates; 2) Less inventory to pick from; 3) More competition from other buyers; 4) Empowered sellers who are less willing to negotiate.
Today’s market has two types of properties. There are the bank owned or short sales, which are referred to as “distressed properties.” Most buyers believe these to be “deals,” because they generally sell slightly below current market value. The other type of property are the traditional listings that have been priced right, are in good condition and are positioned to close quickly. These properties are called opportunities and may cost only slightly more than “deals” without the aggravation.
When faced with the choice, many buyers choose to purchase the traditional listing.
Buyers need to understand what they will be up against when applying for a loan. Lenders will use FICO scores to determine the buyer’s credit risk. To get a good loan, lenders are looking for higher credit scores – 720 and above – to get the best rates and terms. Using a local lender is the way to go, as they are familiar with Hawaii law, local appraisers and the challenges facing today’s buyers.
When buying or refinancing, avoid any large expenditures during the home buying process until after closing. In today’s market, lenders will pull a credit report just prior to closing. If you plan to purchase a property, do not quit your job or retire. Wait until after the closing of your new property.
Opportunities abound at Kapalua Golf Villas. There are one-bedrooms from $430,000 to three-bedrooms asking $1,049,000. Call Laurie Lowson, R(B), at (808) 276-8001 for more information, e-mail Laurie@Lowson.com or search www.Lowson.com for all Maui listings.