RAM president assesses Maui’s real estate market
The following is an excerpt from the Realtors Association of Maui’s current statistics provided by President Terry Tolman:
IN A NUT SHELL the good, the bad AND THE ROAD AHEAD
Well-priced properties are attracting multiple offers, making for a quick sale. Inventories have declined 14-22 percent over the past 12 months in residential and condo classes. Many short sales and REO (bank owned) properties will need to be absorbed as sales before we can move ahead to a more normal marketplace.
Interest rates are remaining near historic record lows, which may help motivate would-be buyers to go ahead and buy IF they can qualify. Current world and U.S. events will have ripple effects on cost of living, consumer confidence and our real estate market.
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, UNLESS you are motivated to upsize, downsize or upgrade. While selling now will “net” less, 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.
The BEST deals are selling; everything else is getting old.
Proactive sellers are getting their properties appraised, inspected and surveyed in advance to encourage realistic offers from knowledgeable 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: Very low interest rates prevail; however, they could 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. Lenders are much more stringent now on requirements for loan approval.
For first-time home buyers, many programs are available. Attend a first-time home buyers’ workshop, get familiar with the process, get qualified/approved, and 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 own a home 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 looking at 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.