Maui’s Real Estate Market – Lessons Learned
“Maui investors and first-time home buyers, are now in the right place, at the right time.”
In the eleven years I’ve spent on Maui, I’ve seen the real estate market climb, fall, hold steady, rise to unrealistic heights and now – we’re nearly at the bottom of the latest trend. What lessons have I learned from Maui’s real estate market? I know that finding the right realtor, an experienced realtor, one who knows the local market and can help find the property with the best value is your key to obtaining a great investment.
I feel that we are near the bottom of the Maui real estate market. There are some incredible deals out there. I haven’t seen prices this low since 1999/2000. That was right after the Japanese yen declined. Many Japanese buyers pulled out of the Hawaii real estate market causing a minor bubble burst. I sold many homes during that era that came completely furnished, top-to-bottom with, not only furniture but golf clubs, silverware and computer/fax office equipment. Some homes even came with a car as part of the package! All included in the purchase price.
As a former engineer, I’m a numbers guy. Interest rate fluctuations and unemployment rates have traditionally been the markers of a real estate rise and fall. Here on Maui we’re experiencing low home prices - not from high interest rates (they’re low!), but from unemployment and de-valued foreclosed homes and condos.
I’m not just referring to properties where the owner has foreclosed and is now priced low in pre-foreclosure or bank-owned situation. There are some great deals on foreclosures but that is not, believe it or not, where some of the best buys are! Sellers who own their properties outright, who have never been in trouble with their mortgage, are now forced to under-value their homes just because similar homes in their neighborhoods sold low at foreclosure.
This is the domino effect that foreclosed homes have in neighborhoods where sellers are not in danger of a foreclosure. A home value is determined by a true value from an appraisal. When a foreclosed home closes in a neighborhood, it de-values all the surrounding homes in that neighborhood. For instance, if Joe paid $600,000 for his home 5 years ago, and Bill buys a foreclosed home in Bill’s neighborhood at $400,000, now Joe is forced to sell his home significantly lower than he had planned.
At this time there is no way to change this process. That’s why I work to help both sellers and buyers understand the numbers in this real estate market so that we may all come to a more realistic figure. In short, it’s not a great time to put your home up for sale (unless it’s priced right!). It is, however, a wonderful time to buy. First-time home buyers and investors on Maui are now in the right place, at the right time.
By Gary Bland, Maui Realtor, R(S)