Maui ‘a sellers’ market’ says Realtors association president
Maui’s housing shortage is driving up the cost of homes, both for buyers and renters, and the trend toward higher prices appears to be here to stay for a while, according to Marion Haller, president of the Realtors Association of Maui.
For the first six months of this year, the median price of a single-family home in Maui County was $600,000, the association reported in statistics released this week. That price is 4.9 percent higher than the $572,000 reported for the first half of 2014, 11.2 percent higher than $539,444 price in 2013, 33.3 percent higher than the $450,000 price in 2012 and nearly 35 percent higher than the $445,000 median price for a home in the first six months of 2011.
The surge in buying Maui property is mainly affecting single-family homes. Condo sales for the first six months were down 1 percent to a median of $420,000.
For about eight months in the second half of last year and the first two months of this year, Maui real estate prices were flat – in the mid to upper $500,000s for homes – Haller said. Then, median sales prices topped $600,000 in three months so far this year ($630,000 in March, $607,098 in May and $650,000 in June), she pointed out.
The $650,000 median price benchmark set in June would be the highest price since at least January 2010, except for the month of January 2014, when the median single-family home price record for the past five years was set at $695,000. Haller said that January 2014 median price was an “anomaly,” brought by the sales of a number of “very expensive” homes in that month.
Now, after home prices have been flat for almost 10 years, prices are “clearly trending upward,” she said.
A number of factors are fueling higher prices, said Haller, a Realtor with 15 years of experience on Maui who specializes in Upcountry, Haiku and north shore properties with Fine Island Properties. One factor is that there are more homebuyers, she said.
In June, there were 101 home sales, a 14.8 percent increase in sales volume over the 88 home sales in June 2014. Typically, the number of home sales has been from 70 to 90 per month, she said.
And Maui’s current stronger tourism market also leads to higher home prices when visitors decide to move here to retire, relocate or buy second homes, she said.
With more buyers competing for properties, the inventory of available homes is dropping, she said. Low supply combined with high demand brings higher prices.
To help illustrate the point, the lowest median price for a single-family home since January 2010 was in January 2012, when the price was $399,000. For the 12 months leading up to that low point for Maui home sales prices, the average number of homes available for sale was 873. Now, for the 12 months ending in June, the inventory for homes has dropped 21 percent to an average of 692 residences available per month.
For a small market such as Maui County’s, that fall in inventory is “pretty significant,” Haller said, especially from the perspective of where inventory was at in 2000 and 2001 when there were more than 1,000 homes on the market, and Realtors were selling 60 to 70 homes per month in a buyers’ market.
Now, it’s definitely a sellers’ market, she said.
“People can’t find a home that they want,” Haller said. “That makes it a sellers’ market.”
When buyers can’t purchase homes, they rent them, she said, adding that a typical three-bedroom, two-bath home rents anywhere from $1,600 to $2,200 a month, with the higher prices commanded by upgraded homes in better condition.
The tight rental market has been exacerbated recently by the U.S. Department of Housing and Urban Development releasing 500 vouchers for renters receiving federally subsidized housing assistance, Haller said.
About 50 to 60 percent of island homebuyers are Hawaii residents, with the rest coming predominantly from the Mainland, especially the West Coast, she said. About 10 to 13 percent of buyers are foreign nationals, mostly Canadians, she said.
There’s been some drop in buying from Canadians because of the stronger U.S. dollar, she said, but it hasn’t been significant. And, Canadians are mostly condo buyers.
Haller said it’s axiomatic that whatever trends happen in the U.S. West Coast real estate market take three to 12 months to arrive on Maui. And, now there’s a “crazy sellers’ market” on the West Coast in places like Monterey and Santa Cruz, Calif., San Francisco, San Diego and Seattle, she said.
“Houses are selling in a day. There’s multiple offers on homes,” Haller said.
Maui Realtors are beginning to see the first signs of that here, she said.
“Real estate is a herd mentality,” she said. “People see other people buying, and they figure ‘I should be buying too.'”
* Brian Perry can be reached at firstname.lastname@example.org.