Residential/Condo Sales Decline, Land Sales Increase
Monthly residential and condo sales numbers decreased slightly and land sales increased in May 2016, the Realtors Association of Maui reported.
Although Canadian investors have been significant participants in Maui’s real estate market in years past, the current Canadian Dollar exchange rate ($1 Canadian = $.77 US) may motivate Canadian investors to sell rather than buy, or sell and reinvest in other Maui properties.
While general US economic news looks cautiously hopeful, current world and US events and election will have ripple effects on cost of living, consumer confidence, and financial and real estate markets.
“Cash is still king” when making an offer,” RAM stated. RAM said that savvy investors are buying with cash, giving them a strong negotiating position, no financing /appraisal hassles and a quick closing. For several months, approximately 36% of all sales were cash.
Well-priced properties continue to attract multiple offers, making for a quick sale.
REO (foreclosures) and short sales are dwindling, with any “hidden inventory” backlog slowly trickling onto the market.
Mortgage interest rates are inching up slightly, which may help motivate would-be buyers to proceed if they can qualify.
Rising sales prices are causing some owners to put their homes on the market.
MAUI STATISTICAL OVERVIEW FOR MAY 2016
Sales Unit Volume Residential sales declined to 93 homes sold while condominium sales declined to 118 units sold. Land sales increased to 14 lots sold.
Median Sales Prices The residential median price decreased to $620,000 in May, while the condo median price decreased to $423,500. Land median price increased to $378,500.
Days on Market Residential homes = 120 DOM, Condos = 119 DOM, Land = 121 DOM.
Year-to-Date Sales comparing January–May 2016 to January–May 2015.
Residential unit sales increased (434 homes sold / +38 units / +10% change YTD), average sold price = $889,278 (-10% change YTD), median price = $619,500 (+4% change YTD) and total dollar volume sold = $385,946,502 (-1%YTD). A drop in this year’s Wailea/Makena residential YTD total dollar volume was caused by a record high sale last April, 2015.
Condo unit sales increased (535 units sold / +19 units sold/ +4% change YTD), average sold price = $644,634 (-6% change YTD), median price = $429,000 (-3%YTD). Total condo dollar volume sold = $344,879,418 (-3% change YTD).
Land Land lot sales are such a small sampling that statistics in this property class are not necessarily reliable indicators. The number of land lot sales increased slightly (68 lots / +3 unit change / +5% YTD change), average sold price = $578,569 (+1%), median price = $464,500 (-12% change), Total dollar volume = $39,342,661 (+6% YTD).
Total Sales for Immediate Past 12 Months
Residential = 1,129 (with 11% being REO or short sale), condo = 1,218 (5.5% REO or SS), land = 157 (4.5% REO or SS). 36.1% of these sales in the last 12 months have been cash transactions.
RAM ADVICE FOR SELLERS & BUYERS
RAM says, talk to your CPA and your Realtor to explore the hidden benefits or consequences of selling your home. 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 un-sold.
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 negotiating your price down during the transaction when previously unknown facts arise.
Low interest rates prevail but have started to nudge upward.
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, with more hurdles to leap and requiring more time to close (often, 4 to 12 months), if at all.
Be prepared, but be realistic, RAM advises. Lenders are more stringent on requirements now for loan approval, compared to 2004-08.
For First-Time Home Buyers
Many programs are available. Attend a first-time homebuyers workshop, get familiar with the process, get qualified/approved, do your homework to get your own home, RAM advises.
The low point in the market has passed, and the opportunity for purchasing a home is fading quickly. If you can’t buy now, start saving your down payment for the next market cycle.
Disclaimer: Focusing on the figures of a specific geographic area or property type may lead to different conclusions than 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.
Download the complete report.