Maui Real Estate Market Trends November 2008
WHOA – Hold on…It is a roller coaster! Steady declines continue in most areas. I see a few out-of-line spikes because there were few or no transactions. We are coming up to our busy season and are all hoping to see lots of bargain shoppers. We know that markets have ups and downs. I try to forecast when we hit bottom and when is a good time to buy. Recently, I had a customer ask about whether this is a good time to buy. The answer is “It depends”. Let’s look at the pros and cons:
Pros For Buying Property on Maui Now
- Selection is Great! That means little competition. You can take your time to find exactly what you want.
- We have historically low prices. In Maui, prices haven’t been this low for 4+ years.
- There are great DEALS. What are you looking for? Fixer uppers – we got ’em. Short sales – we have them. Bank-owned properties – we have them. Beachfront – Yes and good deals too! Cashflow properties – we have a few. You choose what works for you.
- We have historically low interest rates. It is doubtful that interest rates will be this low in 2-3 years. Most loans now are fixed rate so there is little risk buying now, if interest rates go up.
- Financing is available. There is a lot of money out there to borrow. You just need to have decent credit and proven, steady income to get a decent loan. We have loans for foreign buyers. We have loans with little money down. Most loans are full-doc loans that require proof of income and assets. The good news is that if you are qualified, then you can probably actually afford to own it!
- Long term forecasts for Maui are good. People will always want to vacation here. More and more Baby Boomers are wanting to live in warm climates and how can you beat Maui weather? The recent changes to China/Korea VISAs and future ability for them to buy property will certainly drive values up. Maui development is limited by our water supply. The political situation makes getting building permits pretty tough which will slow development significantly in the next 1-7 years.
- There is room to negotiate! When you find the perfect home, there is a good chance that you can negotiate on price and/or terms with the seller to benefit your circumstances. Many sellers are waiting until the market improves. The ones that have to sell are pretty motivated. It takes a great negotiator and great strategy to make it a win-win for both sides.
Cons Against Buying Property on Maui Now
- The market is still declining. It is very possible that your purchase will be worth less in a year than when you purchased it. Depending on interest rates and foreign currency conversion rates, that may not mean you will actually be spending more to buy it. Also, try to consider which do you think is riskier – the stock market or the real estate market?
- Tough economic times. The economy impacts so many things. If tourism continues to be down and you own a vacation rental, you may not make as much money as anticipated. Gas prices are down under $3.00 but that may not last. Labor may be cheaper in future, but many laborers are thinking of leaving the islands. People don’t want to risk everything they have anymore.
- Foreign conversion isn’t the best. For Canadians (who were big buyers last year) unfortunately the currency conversion rate right now isn’t the best. One option is to finance here for now and when it gets better, refinance in Canada. I grabbed this image from my Google Page where I can track this using a great gadget.
- Financing availability. There are not the same variety of options that were available a year or so ago. If you are investor or need to state income, financing is getting tougher. If you need to state income then buy immediately! There are still a few programs out there but they won’t be around in 2009. There are a lot on creative options though.
My REO and Short Sale counts are up again but the trend seems to be slowing.
- Short sales (View Short Sales) End of October: 199 End of November: 201 ( just +1% and slowing)
- Bank-owned (View REOs) End of October: 42 End of November: 44 (+5%)
- Foreclosures — The trend continues upward at a steady pace with the Maui News reporting 22 scheduled auctions in November and 36 in in December. Many are still getting postponed at auction. It often takes 6+ months after auction for a property to show up as REO.
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The following complete reports provide overall Maui data as well as data broken down by area.
View the Snapshot Report I’ve put all the snapshots on a single page!
View the Full Trend Report – 2 years of trend data by area.
Maui Statistics This data is published by the Realtors® Association of Maui, Inc. It contains monthly updates on sales by area for the County of Maui.