Too much doom and gloom this morning from the Maui News about foreclosures hitting all time high in 2011. There is always the other side of the coin! Here’s the latest from Keller Williams.
YEA-2010 is over! Bring on 2011! December left with strong sales!
Here’s a quick look at 2010 in review. If 2009 was called a roller coaster, 2010 would be a nice downward glide. See my predictions at the end of the article for what I see 2011 will bring.
- The lowest priced property sold for $18,000 and was an oceanfront leasehold vacation rental property at Hale Ono Loa in the Honokowai area of West Maui. Can’t believe you missed it? There was good reason because it was sold before it went on the MLS.
- The highest priced property sold was a Makena oceanfront home for $19,850,000. Makena and Wailea took the top 5 spots for sold high priced properties.
- Median price for all property types was $430,000 down from last year’s median of $479,000. To give you an idea what this can buy, there were several 3/2 brand new homes in Central area with about 1600 square feet of living space.
- We finished off the year with total of 2088 sales, up 29% from 2009!
- Cash is king. Throughout the year 45% of sales have been cash sales. Financing continues to be challenging but far from impossible.
- Interest rates finally started going up in December. They’d been predicting it all year.
- Foreclosures continue to dominate our Maui real estate market. 18% of the sold properties were bank owned and 12% were short sales.
Speaking of foreclosures… Trends are continuing. We are seeing fewer short sales on the market. My gut tell me it’s NOT because we are running out of inventory that should be short sales. Maybe fewer people are attempting a short sales strategy. If you have been on the fence, the good news is that banks are starting to figure out that short sales will save them lots of money and they are getting better at processing them. The banks still have a lot of inventory to be release as REO’s (bank-owned).
- Sales will go up. People are tired of waiting: waiting to sell, waiting to upgrade, waiting to buy. The people that take action will be making a wise move.
- Prices will hit bottom sometime in 2011. Some markets have probably already hit bottom. The higher priced areas may take longer but the majority will bottom out. While foreclosures will still hold prices low, the increase in sales will create some upward movement.
- We won’t see interest rates come back down. They probably won’t skyrocket either.
- Financing will get a little easier but you’ll still need a steady job to get a mortgage.
- Maui popularity continues to climb! We’re seeing more foreign buyers. We see our vacation rental industry growing back to near pre-recession levels. People were tired of waiting for a vacation too!
Other interesting trend articles from 2010:
November: Who’s Winning? Are REO’s and Short Sales Great Deals?
October: Bidding Wars!
May: Predictions: Condo prices will fall! (median price of condos have fallen 35% since then)
March: Price Point Analysis
February: Does cash get you a better discount off the list price?
This 1 bedroom condo is located at the top of this resort complex and close to one of the 3 pools. Walking distance to the ocean. The kitchen recently redone. Freshly painted, new carpet and new kitchen appliances. This Fannie Mae is approved for HomePath Renovation Mortgage Financing. Close by 12/31/2010 and request 3.5% of final sales price to be used as closing costs assistance! Selling agent may request a $1500 bonus. Eligibility restrictions apply.
Wailea/Makena | Wailea Ekahi III | 1 bedroom condo | 1.00 baths | 792 sq. ft. | GV view | Bank-owned | MLS: 344580
I am not the selling agent but I’d be happy to represent you as buyer. If the photo is not available, this listing is no longer on the market.
Are there areas of Maui that are doing better than others? The answer is YES! Of course “better” in real estate depends which side of the transaction you are on. Since we are talking the “real estate market” we’ll assume that better means more sales and higher prices. I’m looking at how the trend line from November 2009 compares to the trend line for 2010.
And the winner is: Upcountry! Unit sales are up 23%. Median prices are up 4% and active inventory is just 10 months; remember that <6 months of inventory is considered a Seller's Market. And the pending units ratio is 115% indicating that prices will most likely go up.
Other interesting areas to watch include:
- West Maui Condos – Unit Sales are up 48%, prices are down 10% and pending ratio indicates that prices will continue to decline.
- South Maui is pretty stable in unit sales but condo median prices are 17% lower than last year. Residential isn’t quite as bad with just 7% lower and pending indicator showing additional small declines in prices.
- Central Maui Condos had quit selling last year but are now back on track. Central Maui has the lowest inventory with just 8 months for both condos and residential.
If there is a winner, is there a loser? That award would have to go to West Side Residential. Units sold is flat, median prices are 40% lower than last year and inventory is a whopping 25 months! The funny thing is that the pending inventory indicator at 129% indicates prices will go up. West Side has a wide range of properties so one sale can really skew everything.
And that brings up one very important point. Real estate is very local. Anything can happen and each house has a unique story.
Things are relatively stable in the foreclosure market. Bank-owned properties and Short Sales constituted 38% of the units sold. We are seeing fewer auctions scheduled as we head into the holidays but already have many scheduled for January. When I chart foreclosure auctions, this is auctions schedule according to Maui News. I don’t count timeshares but do count AOAO foreclosures. This is where a condo association forecloses in order to try to minimize association losses until the bank gets around to foreclosing; they take over operations and often will rent the unit out. We are seeing more condo associations doing this. Most auctions are still being delayed and many auctions are only published in the Honolulu Advertiser and The Pacific Business News.
People are asking if Bank-Owned (REO’s) and Short Sales are great deals. They can be but buying one is not for everyone. Just like other properties, you need to negotiate to get the best price. Bank negotiators love a bidding war more than anyone. We’ve had REO condos sell for 135% of list price! They are really much like real sellers where some price low hoping for the bidding war and some price high hoping for the best price. Here’s a little table that shows what to expect. The numbers are minimum, average and maximum “Sale Price to List Price” ratio based on sales in last 6 months.
Min / Avg / Max
Min / Avg / Max
|Condo||70% / 98% / 135%||53% / 94% / 111%|
|Residential||53% / 99% / 123%||70% / 96% / 120%|
We’ve entered into our slowest season which ends quickly around the holidays. We still have good inventory. We still have great prices that have been pretty stable. Interest rates are very low.
What is new is that we’ve started seeing bidding wars. You heard me right. Nice home, under $500,000 that is priced right WILL have multiple offers, over list price, within days of being listed. I predict that we’ll see the same thing happen with vacation rental condos come January. Sometimes this is bank-owned properties but it is true with regular sales too. Eventually, the wars will start creeping into higher priced properties and before long the media will declare it is a seller’s market.
This news is great for people ready to Upgrade. You can sell your house quickly and find a new one, potentially getting into a bigger nicer house with a lower interest loan. You could even lower your payments. COOL! Call me to help work through a strategy today!
Foreclosure numbers are still strong; we saw some glitches when the banks stopped foreclosures for a few days last month. Yes, the banks may not be crossing all their T’s and dotting their I’s; when dealing with properties, they must handle paperwork correctly. Some think that banks are the horrible ones taking property away from poor homeowners and they are evil. While there was definitely some mortgage fraud happening; many people got into bad loans knowingly thinking they could refinance. But the truth is that the only thing that initiates a foreclosure is when a property owner stops paying the mortgage as promised. Let’s quit looking for bailouts and move forward quickly.