Real estate reflects ‘cooling trend’
Stats from first half of year show home prices down — condos upBy HARRY EAGAR, Staff Writer
Article Photos
Prices for single-family homes are down 9 percent for the first half of this year, but prices for condominiums are up that much or more, according to statistics compiled by the Realtors Association of Maui.
The number of closed residential sales is down sharply, but the pace of sales - as measured by days on the market - has slowed only moderately.
In other words, according to association Chief Staff Executive Terry Tolman, Maui real estate continues its "general cooling trend" since a peak three years ago.
In mid-2005, the median price of a single-family home hit $670,000, and the average was almost $1 million. This year, the median was down to $592,898 and the average was $888,108.
Today's prices are still far higher than they were in mid-2004 when the median was $530,000 and the average was $732,432.
At the median, half of sales were for more, half for less.
The number of single-family homes sold, which had held up even as prices eased, has tumbled. At the peak in mid-2005, there were 666 sales in six months, and there were 650 in the first half of 2007. But in the first half of 2008, only 476 changed hands.
That puts the total dollar turnover just where it was in mid-2004, $422 million so far this year, which is down a third from last year.
Tolman says that "properties priced right will sell in a reasonable amount of time." Days-on-market averages confirm that.
Early in 2005, long before buyers and lenders were worried about subprime mortgage defaults, single-family homes were selling, on average, after 110 to 153 days. So far this year, the wait has been longer by about three weeks - from 134 days in February to 183 days in May.
The condominium market presents a much different picture. The number of units turning over is half what it was three years ago - 507 in the first half this year.
But prices are much higher.
The median condo price is up 10 percent this year to $575,000, and the average is up 27 percent to $961,554 - which means condos are averaging more than homes, a unique situation for Maui.
As far as prices go, the peak of the market was not three years ago but is happening right now. In mid-2005, the median condo was selling for $371,500, and the average was $514,895. Today's median is $60,000 above 2005's average.
As would be expected with the pace of the market slowing so much, the days on market for condos is way up.
In early 2005, the monthly average days on market ranged from 102 to 140 for condos. This year, 2005's days-on-market ceiling became 2008's floor. The number ranged from 140 days in May to 223 in January.
Because the condo market has moved decisively toward the luxury end, the total dollar turnover is down only marginally from three years ago - $505 million then, $488 million now - and is slightly ahead of last year's turnover.
With a list of new developments and a spreadsheet program, it is possible to "back out" the effect of new luxury condos from the averages. When that is done, one agent figures older condos have been selling for about what they were at the end of 2007.
Tolman ran the numbers for the past five weeks - June 1 through Tuesday - and noted 67 condo closings, 56 of them resales.
With the 11 new ones included, the median sales price was $580,000. Without, the median dropped to $515,000.
Tolman cautions that it is sometimes difficult to be sure what counts as "new."
Sellers self-report to the Multiple Listing Service what they have. Some years ago, Tolman and other association managers in the state realized that the self-reports were not self-evident.
Sometimes, he says, a seller would count an existing property that had had major remodeling as new.
The Maui and Oahu associations now have a category called "new developer offering," but there is still some play in the definition, as it is understood by members.
Besides, as Tolman cautions each month when he publishes the latest statistics, Maui is a small real estate market, and areas within Maui are even smaller, which can produce skewed spikes and dips in the percentages.
One common, if arbitrary, way of looking at real estate is that if inventory for sale amounts to more than six months anticipated closings, it's a buyer's market. If under six months, a seller's market.
Days on market is one way (but not the only way) to calculate how much inventory is out there. By that measure, Maui real estate is still a seller's market.
But if the number of units for sale (around 1,100 this year for homes) is compared with absorption (476 in six months), then it begins to look like a buyer's market.
However, the number for sale is usually considered inflated, as some owners list properties with unrealistic asking prices, hoping lightning will strike.
In any event, the local market looks better than many places on the Mainland, where it takes nearly a year to sell real estate, on average.
Also, the number of sales out of foreclosure remains low here.
As always, West Maui is a market unto itself. Average single-family prices there range from $912,500 in Lahaina to $2 million in Kaanapali and $4.9 million at Kapalua.
Average West Maui condo prices range from $789,559 in Lahaina to $1.2 million at Kaanapali.
For the month of June, Neighbor Island home sales were mostly slow, according to Hawaii Information Service. Median prices were down on the Big Island and Maui but up on Kauai.
The service reports that Big Island single-family home sales declined 37 percent and condominium sales dropped 33 percent from the same time last year. The median prices for homes dropped 18 percent.
Maui reports single-family home sales in June were down 34 percent and median prices down 8 percent.
On Kauai, single-family home sales dropped 39 percent and condominium sales dropped 12 percent from last year. But unlike the other islands, the median price for a single-family home rose 5 percent.
* The Associated Press contributed to this report. Harry Eagar can be reached at heagar@mauinews.com.
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haynutrtle
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07-10-08 2:20 PM
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maybe i should go ask Gov lingle to co sign for me to get at least a F****** town home at Iao Parkside. I seen couple units there that looked decent.
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paddleman
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07-10-08 2:10 PM
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can you explain Kuladude?
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paddleman
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07-10-08 2:07 PM
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You mean if I own one truck, I neva gonna own one house? Maybe I live outta my truck then.
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LDragonfly
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07-10-08 1:47 PM
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Lets also add in the rip offs and the cost to fix these 'homes' that have damagages that make up for the price drops.
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mauicharlie
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07-10-08 1:12 PM
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delete " in ". Stupid auto check.
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mauicharlie
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07-10-08 1:09 PM
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These numbers are horse puckey. My house was on the market until last December. The house was listed below the appraisal amount which was done early last year. I took it off the market when the realtor told me I needed to reduce the asking price by 20%. That was six months ago. I don't even want to know what the value is now. I'm just going to sit tight. I am just thankful it's Maui and not Cleveland where I have to hang on in.
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mosunshine
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07-10-08 11:53 AM
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I recently had the pleasure of vacationing to your island. Of course like many folks I considered purchasing a little piece of heaven for my personal use and possibly retiring there in a few years. Unfortunately, I discovered not only was that a far reach but was also very disheartened for you citizens that live there. How do you manage? Most do not earn 6 figures a year that would enable them to the "American dream". And even then, it would be a stretch to cover all of your living expenses. What a beautiful place to have such a burden of not being able to supply to your family the most basic opportunity of owning a home. Real Estate prices are infated all over the nation and needs to stop.
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david55
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07-10-08 6:55 AM
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1 term mayor.
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kuladude
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07-10-08 3:52 AM
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all u got to do is get a masters in computer engineering and you'll be able to afford a house... if u drive a truck don't expect to be able to afford a house here anytime ever... no one is entitled to own a home or to a bailout
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pattkean
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07-10-08 3:03 AM
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Are you aware that if inflation was measured the same as it was when Carter and Reagan were President the rate today would be about 12%. GQ is right, inflation is really here, and the Fed is ripping savers off to "save" the economy. This is why I put some assets into Gold and some foreign currencies three years ago. It will get rough, 80 - 81 for sure, if Obama gets elected and Congress moves more to the left than it is, anti growth tax policy will bite just as demographics turn south. I figure a mid level (late 1800's level depression) in that case. Enough complaining however, during the next few weeks I will spell out some suggestions to help Maui through this period of difficulty. Just keep in mind the rest of the world will have locales that will still do well. Just stay out of the EU. Over the next few years they are going into really bad times.
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Makalapa
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07-10-08 2:26 AM
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Good the houses are dropping. Maybe the real real estate people will go back to Calfornia or at least stop putting their pictures in the paper. why do they do that?
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FreeAgain
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07-09-08 11:09 PM
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Some experts are predicting a DOW of 8 to 9000. This barometer is reflective of an economic collapse. Everyone has seen this except congress. Bailing out speculators who bought at the market peak punishes the prudent and further bankrupts the country. About the same situation is occurring on Maui as millions are spent on frivolity while necessities languish. The endless stream of freshly printed money is about to run dry. Hallelujahs.
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pattkean
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07-09-08 9:27 PM
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I would put off a home purchase for a time yet. The US is entering a protracted period of economic slowness. Not until energy is dealt with, will this trend slow. Not until US demographics return to "more normal" and ** will things swing upwards. Most who bought here recently on spec are new to the "sport". Many do not have job skills to see them through a hardening job market. With US unemployment climbing past 8% nationally by 2010, and quite possibly 15% by 2015, (the bottom) Soon speculators will have to either let go (many do it through LLC's) or go bankrupt. Hawaii's tourist economy will continue to slow d.t. fuel price, and higher mainland job losses. However "internationalism" will bouy Maui more than the rest of the country. Joblessness here will be sig. lower than the US mainland throughout the downturn. The next "drivers" are obvious, AND 3 -6 YEARS OFF UNTIL MATURE ENOUGH TO IMPACT. The next Pres. is in a pickle. Best opt
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pattkean
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07-09-08 9:11 PM
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The number of spec purchases here was much higher than the mainland. Recently I've noticed Canadian, and EU buyers nudging the market. These buyers will fall off as their economies tank. The greater number of speculative purchases here boiled up prices, and tends to slow decline as investors hold on. Nationally Congress rides in with its $300 billion "bail out" package. Reading the fine print of this effort shows Democrat Presidential hopefull Dodd's receipt of a little graft/corruption from Countrywide led to a bill that bails out speculators more than it helps people. Bush plans to veto it, due to the speculator part. No help here until next year. With energy cost, neg. demographics, (most severe downturn of family formation-new job seekers since 1930 % wise) no major "new drivers" the economy will continue to erode no matter who wins in Nov. Prices will trend down here until Chinese enter the market in larger numbers. Hold onto your hat.....
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FreeAgain
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07-09-08 6:19 PM
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What is your problem, Poor Boys? Try subsidizing your income with a vacation rental, small beach, home or Molokai business. No hope there? How about working for A&B as they build mini-motels? Still not enough to buy an affordable house? Best advice is to wait, wait and wait a little longer. Of course, you will have to wait since "affordable" is a con game perpetrated by local government officials. "Affordable" also means government subsidy that means more money from already strapped taxpayers...that is you and I. Keep spending money for harbor improvements, wharfs and Kihei parks and wait a little longer. These real estate numbers are not meaningful. Verifiable numbers use the same properties.
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EndofEmpire
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07-09-08 5:38 PM
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This is a joke. Anybody who has been paying attention to the real estate market here knows prices are dropping like a stone. Southpointe in Kihei bubble prices: $350K. Prices now: $200K to $250K. 30% drop. Villas at Kenolio bubble prices: 490-550K. Prices now: 340-400K. 30-40% drop. All over Wailuku, there are price reductions, short sales, foreclosures, and builders are slashing prices and offering incentives. Maybe there are some rich dummies paying top dollar for high end properties, but very little of the mid or low level properties are selling. And it will only get worse. The credit meltdown is tightening lending standards. Bye bye easy credit. And the canadians and chinese won't "save" the market -- the bubble is starting to pop in those markets too.
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mauiwatchdog
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07-09-08 5:24 PM
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No kidding! Even if I could somehow make the downpayment, there's no WAY I could afford a $2-3k monthly mortgage for the rest of my life! Hell, I can't even afford a $1k monthly mortgage and I have a very decent job and good credit. Prices may go down, but I doubt they'll ever be "affordable."
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haynutrtle
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07-09-08 4:47 PM
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wow prices dropped and i still cannot afford one house here in hawaii. Is it just me or is something wrong with that? I mean i get one decent job and decent credit. In fact i cannot even afford the so called affordable homes. Now that i think about it is me.
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