Realtors Association of Maui: ‘Cash is King’
According to the Realtors Association of Maui report for September 2015, monthly residential and condo unit sales numbers bounced up and down the last few months, with inventory decreasing this month.
While general US economic news looks cautiously hopeful, current world and US events will have ripple effects on the cost of living, consumer confidence, and financial and real estate markets.
Canadian investors have been big participants in Maui’s real estate market; however, the current Canadian dollar exchange rate of .77 to the US dollar may motivate Canadian investors to sell rather than buy.
Year-to-date median and average prices for 2014 were rising across the residential, condo and vacant land markets, despite lower number of year-to-date unit sales.
But the first half of 2015 took a break from that trend. RAM determines that those figures should catch up by the end of the year.
RAM says “cash is king,” when making an offer. Savvy investors are buying with cash, giving them a strong negotiating position, no financing/appraisal hassles and a quick closing. For several months, approximately 37% of all sales were cash transactions.
Well-priced properties are attracting multiple offers and selling quickly.
REO (foreclosures) and short sales are dwindling, with any “hidden inventory” (or overhang) backlog slowly trickling onto the market.
Mortgage interest rates are inching up slightly, which may help motivate would-be buyers to go ahead and buy if they can qualify.
Rising sales prices cause some “owners” to become “sellers,” putting their homes on the market.
RAM’s Tips for Sellers
Sharpen your pencil, talk to your CPA and your Realtor to explore hidden benefits or consequences. Make no assumptions that will sting later. To be successful, sellers need to beat competing properties with better property condition, realistic pricing, good marketing and flexible, creative terms.
Days-on-market figures show that properties priced right will sell in a reasonable timeframe, often with multiple offers. “Priced right” is still the determining factor. The best deals are selling, while significantly over-priced listings remain unsold.
Pro-active sellers are getting their properties appraised, inspected and surveyed in advance to encourage realistic offers from knowledgeable buyers. This can prevent unanticipated escrow fallout or buyers attempts to reduce the sales price during the transaction when previously unknown facts come to light.
RAM’s Tips for Buyers
Low interest rates prevail; however, they have begun to nudge upward and are predicted to rise later in the year. Buyers should get pre-approved so they can shop in confidence (fewer last minute disappointments due to non-funding loans).
Short-sales and foreclosures are still in the marketplace, yet they can be less of a bargain than they seem, requiring buyers to leap more hurdles and taking more time (often four to12 months) to close, if at all.
Be prepared, but be realistic, RAM recommends. Lenders are more stringent on requirements now for loan approval, compared to 2004-08.
RAM recommends that first time buyers attend a first-time home buyers workshop, get
familiar with the process, get qualified/approved and do their homework.
Many current owners never thought they would be able to own until they attended a workshop, discovered they could own a home, and are glad they did, RAM says.
The low point in the market has passed, so RAM recommends action now. The opportunity is
fading quickly. If you can’t buy now, start saving your down payment for the next market cycle.
Brief Maui Statistics Overview for September 2015
Go online for the full report.
Sales Unit Volume Residential sales remained steady at 97 homes sold while condominium sales rose to 108 units sold. Land sales came in at 16 lots sold in September (see page 4).
Median Sales Prices The residential median price rose to $573,300 and the condo
median price rose to $399,500. Land median price increased to $535,150 (see page 5).
Days on Market Residential homes, 95; condos,120; land, 195 (see page 6). This is the average DOM for the properties that sold. If predominantly old inventory sells, it will move this indicator upward, and vice versa. RAM’s DOMs are calculated from list date to closing date, not contract date, including approximately 60 days of escrow time.
Year to Date Sales
Residential unit sales increased (817 homes sold / +96 units / +13% change YTD), average sold price = $895,453 (-2% change YTD), median price = $585,000 (+3% change YTD) and total dollar volume sold = $731,585,469 (+11%YTD).
Condo unit sales exactly match 2014 sales (915 units sold / 0 units change/ 0% change YTD), average sold price = $644,395 (0% change YTD), median price = $405,600 (-3%YTD). Total condo dollar volume sold = $589,621,608 (0% change YTD).
Land lot sales declined (112 lots / -18 units / -14% YTD change), average sold price = $882,741 (+27%), median price = $487,500 (-5%), Total dollar volume = $98,867,041 (+9% YTD). (Land Lot sales are such a small sampling that statistics in this property class are not necessarily reliable indicators.
YTD sales numbers compare January through September 2015 to January through
September 2014 (see pages 10 through 14). Early 2014 monthly numbers were quite strong, making early 2015 seem a bit pale in comparison. Anticipate that they will even out as the year progresses.
For a more comprehensive view, compare to 2014’s Year-End (Dec. 2014) figures available online.
Total Sales for Immediate Past 12 Months
Residential = 1,038 (with 11.5% being REO or short sale)
Condo = 1,175 (7.2% REO or SS)
Land = 144 (4.2% REO or SS). (37.3% of these sales in the last 12 months have been cash transactions.)
Disclaimer Zooming in on the figures of a specific geographic area or property type may lead to different conclusions that looking at the overall view. Maui’s market place is much smaller than O‘ahu’s, and a few high or low sales have a greater effect on the statistical numbers without necessarily indicating a big market swing one way or another.