Real estate bouncing at bottom amid signs of life

KAHULUI - For the first nine months of the year, Maui County's real estate market "seems to be bouncing along at the bottom," in the words of Terry Tolman, chief staff executive of the Realtors Association of Maui.

There are encouraging signs here and there, and at least things have not gotten much worse. But they haven't gotten much better, either, according to statistics from the association's Multiple Listing Service.

The number of sales closed is still way down. In September, there were 53 closings of single-family homes, which was not a huge difference from the 66 in September 2008, or the 74 the year before that, or the 63 the year before that. But the past four years have been very low compared with Septembers in 2004 and 2005, when there were more than 100 closings each month.

Condominium closings tell a similar tale, although this September's 62 was better than the 50 of September 2008. Going further back, however, shows how current sales have taken a big dip.

So far this year, there have been 450 single-family closings, compared with 708 in the first three quarters of last year.

For condos, the fall has been much less dramatic, down only from 674 to 610.

Average prices are holding more or less steady at about 20 percent less than last year. But single-family prices are down nearly 30 percent from 2006, when the average topped $1 million. Last year, the average was down to $877,000, and this year the average is down to $715,000.

For condos, the story has been different. Average prices reached $787,000 in 2006, held steady as house prices began to slide, and even rose to $946,000 last year. They are now down to $734,000. Last year's odd number reflected some late closings of new construction that had been sold at 2005-06 prices.

Multimillion-dollar luxury resort condos can be wrung out of the averages by looking just at less-pricey Kihei, which has by far the most condo sales of any area in the county. There the trajectory also shows a blip in 2008 but in general has been steadily down, from an average of $459,000 in 2006 to $447,000 the next year, then $493,000 last year, followed by a drop to $371,000 through this September.

Tolman cautions that Maui is a small market, so that monthly changes may not track longer-term trends. Also, he warns, regions within the county can have different experiences.

Thus, single-family sales prices this year in Central Maui have changed little compared to last year, at just under $500,000. Volume, though, is off by more than half to 163. In the first three quarters of 2008, 344 homes sold in Central Maui.

No place shows as much activity, although Lahaina has had 22 closings this year, up from 15 at this time last year. Prices there, however, are way down, from $1.67 million to $967,000.

Median prices, which can sometimes catch the tone of a market better than averages, are down 16 percent for single-family residences this year, from $595,000 to $501,000.

That still puts a typical Maui house well beyond the means of many. However, incentives, including low interest rates and, for some, tax credits, should open opportunities for some first-time buyers.

The median price of a Maui condo this year is $491,000, down 14 percent from the $570,000 of last year.

A considerable number of short sales (sales for less than the balance of the owner's mortgage) and bank repossessions make the market hard to assess.

Nationally, according to the National Association of Realtors, the pending sales index has risen for seven straight months. That is the longest string since this statistic began to be tracked in 2001.

However, the NAR chief economist, Lawrence Yun, noted that short sales tend to take longer to close, so a rise in the index of pending sales does not simply translate into more completed deals.

There are still plenty of places in Maui County where average prices, whether for a condo or a house, require a millionaire to buy: Kaanapali, Kapalua, Wailea-Makena and, most expensive of all, Lanai for condos; and Kaanapali, Kapalua, Napili-Kahana-Honokowai, Wailea-Makena and, most expensive of all for houses, Olowalu (but just one sale there, for $3,750,000).

* Harry Eagar can be reached at heagar@mauinews.com.