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November, 2008 - Newsletter for the Maui Market
Aloha! Here is your eNewsletter for the Maui Market from Jim Foster
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Make sure you check out the Useful Internet Sites and Real Estate Tips at the end of this newsletter which includes some valuable information.
Don't forget! We provide a free Automatic E-mail Notification Service that goes out to recipients whenever a new listing becomes available for a particular condominium complex. Each of these notifications includes a link to view the details of the brand new listing in the MLS. We DO NOT SHARE YOUR EMAIL ADDRESS or your contact information with anyone. To subscribe to our Automatic E-mail Notification Service, please send Won an email at Won@JamesBFoster.com with your first and last name, your email address, and the condominium property you wish to be notified of.
Another service we provide is the Condominium Real Estate Market eUpdates which is sent out periodically to inform potential buyers and owners of specific condominium properties about the real estate market activities at those properties. This service is provided exclusively for those who own a condominium property or who are interested in a particular condominium complex on West Maui. If you would like to subscribe to the Condominium Real Estate Market eUpdates for a particular complex or to get a list of all condominium properties that are included in the eUpdates, email Won at Won@JamesBFoster.com.
Maui Real Estate – There was a slight decrease in prices for single family residential in October but condo and land prices rose slightly. Days on Market have increased some with average time for condo sales around 6.5 to 7 months. The year to date sales for 2008 has declined in for single family residential and condo land sales have declined in number with a small increase in price.
The total sales for the last twelve months period for single family residential is 955, condos 879 and land 132.
Buyers are continuing to look and some understand it is an excellent time to buy and hold because prices have declined. Buyers should make sure they are preapproved and also consider asking the Sellers if they would consider an Agreement of Sale. The growing inventory has slowed and currently there are 715 condos in the MLS for the West Maui area.
For Sellers, the critical thing is pricing the property appropriately. The smart and aggressive Sellers are making sure their property shows well, having an inspector write a report on condition and having their property appraised as a basis of comparison. This definitely provides a competitive advantage for Sellers who are truly motivated to sell their property.
To view the 2007 & 2008 Year End Statistics go to http://www.jamesbfoster.com/condosales.php and click on Maui MLS Statistics 2007 & 2008.
The West Maui real estate market continues to favor Buyers with Sellers willing to negotiate their prices. The current inventory of West Maui condominiums for sale is now at 715 and on the same month in 2006 it was 408. Properties are requiring more time to sell such as five to six months and Buyers have a much larger inventory of properties for sale to choose from. If you’re curious about current trends in Maui real estate and where the market is headed, the answer is - it depends on Location - it depends on if it is condominium or single-family residential - it depends on whether you look at volume, average or median prices. In the current Maui real estate market, the for sale inventory continues to increase and prices are typically flat or have decreased.
Condominiums for Sale - In the West Maui real estate market, at the beginning of January, 2007 - 410 condominiums were listed for sale with the total value of $372,238,031.00; February, 2007 - 431 condominiums with the total value of $393,681,669.00; March, 2007 - 458 condominiums with the total value of $420,941,268.00; April, 2007 - 479 condominiums with the total value of $429,708,159.00; May, 2007 - 472 condominiums with the total value of $424,095,260.00; June, 2007 - 455 condominiums with the total value of $415,187,129.00; July, 2007 - 475 condominiums with the total value of $432,797,008.00; August, 2007 - 469 condominiums with the total value of $420,479,301.00; September, 2007 - 474 condominiums with the total value of $430,914,408.00; October, 2007 - 471 condominiums with the total value of $423,631,002.00; November, 2007 - 466 condominiums with the total value of $416,008,907.00; December, 2007 - 485 condominiums with the total value of $421,080,117.00; January, 2008 there were 511 condominiums with the total value of $445,656,447.00; February, 2008 there were 559 condominiums with the total value of $500,946,603.00; March, 2008 there were 595 condominiums with the total value of $529,779,322.00; April, 2008 there were 647 condominiums with the total value of $606,635,687.00; May, 2008 there were 634 condominiums with the total value of $583,391,821.00; June, 2008 there were 644 condominiums with the total value of $590,736,279.00; July, 2008 there were 680 condominiums with the total value of $662,919,268.00; August, 2008 there were 703 condominiums with the total value of $693,069,348.00; September, 2008 there were 693 condominiums with the total value of $654,411,079.00; October, 2008 there were 673 condominiums with the total value of $620,032,454.00; and at the beginning of November, 2008 there are 715 condominiums for sale in the West Maui area with the total value of $652,379,032.00. The condominium for sale inventory since July, 2005 has been as low as 165 and is up to 715 for November 3, 2008. The “for sale” inventory on West Maui continues to increase.
Condominium Sales in 2006 - The total condominium sales for West Maui during the month of January, 2006 there were 42 sales and the total value was $28,574,643.00; for February, 2006, there were 48 sales with total value of $32,995,078.00; for March, 2006 there were 40 sales with total value of $32,199,584.00; for April, 2006 there were 43 sales with total value of $41,898,525.00; for May, 2006 there were 51 sales with total value of $39,644,886.00; for June, 2006 there were 40 sales with total value of $32,533,500.00; for July, 2006 there were 30 sales with total value of $26,212,000.00; for August, 2006 there were 28 sales with total value of $31,885,500.00; for September, 2006 there were 30 sales with total value of $24,770,000.00; for October, 2006 there were 29 sales with total value of $23,359,299.00; for November, 2006 there were 22 sales with total value of $13,414,600.00; and for December, 2006 there were 30 sales with total value of $23,169,999.00. For 2006, the monthly average sales were 36 sales per month with the average sales value of $29,221,468.00 per month.
Condominium Sales in 2007 - The total condominium sales for West Maui during the month of January, 2007 there were 37 sales and the total value was $33,091,000.00; for February, 2007 there were 26 sales with total value of $16,330,000.00; for March, 2007 there were 32 sales with total value of $24,121,000.00; for April, 2007 there were 27 sales with total value of $16,766,000.00; for May, 2007 there were 28 sales with total value of $30,774,929.00; for June, 2007 there were 28 sales with total value of $18,917,000.00; for July, 2007 there were 21 sales with total value of $13,314,200.00; for August, 2007 there were 32 sales with total value of $33,258,999.00; for September, 2007 there were 23 sales with total value of $24,701,900.00; for October, 2007 there were 42 sales with total value of $28,159,900.00, however this included a packaged sale of 19 units at Aina Nalu in Lahaina; for November, 2007 there were 15 sales with total value of $15,930,000.00; and for December, 2007 there were 13 sales with total value of $13,335,500.00. For 2007, the Month of December has seen the lowest number of sales in 2007. The monthly average sales were 27 sales per month with the average sales value of $22,391,702.33 per month.
Condominium Sales in 2008 - The total condominium sales for West Maui during the month of January, 2008 there were 20 sales and the total value was $16,186,800.00; for February, 2008 there were 20 sales and the total value was $14,414,584.00; for March, 2008 there were 26 sales and the total value was $20,079,000.00; for April 2008 there were 28 sales and the total value was $ 20,488,500.00; for May 2008 there were 22 sales and the total value was $20,055,000; for June 2008 there were 14 sales and the total value was $11,957,000; for July 2008 there were 10 sales and the total value was $6,955,999; for August 2008 there were 13 sales and the total value was $8,055,000; for September 2008 there were 12 sales and the total value was $6,707,122; and for October 2008 there were 11 sales and the total value was $6,267,500. The average monthly sales were 18 sales per month with the average sales value of $13,116,650.50 per month.
The total condominium sales for August, 2005 was 52; September, 2005 - 58; October, 2005 - 38; November, 2005 - 48; December, 2005 - 47; January, 2006 - 42; February, 2006 - 48; March, 2006 - 40; April, 2006 - 43; May, 2006 - 51; June, 2006 - 40; July, 2006 - 30; August, 2006 - 28; September, 2006 - 30; October, 2006 - 29; November, 2006 - 20; December, 2006 - 30; January, 2007 - 37; February, 2007 - 26; March, 2007 - 32; April, 2007 - 27; May, 2007 - 28; June, 2007 - 28; July, 2007 - 21; August, 2007 - 32; September, 2007 - 23; October, 2007 - 42; November, 2007 - 15; December, 2007 - 13; January, 2008 - 20; February, 2008 - 20; March, 2008 - 26; April, 2008 - 28; May, 2008 - 22; June, 2008 - 14; July, 2008 - 10; August, 2008 - 13; September, 2008 - 12; and October, 2008 was 11.
We have gone in to the Maui MLS database and pulled information for 2000 through 2008. In 2000 - 654 condominium units sold in the West Maui area for a total value of $209,064,010; in 2001 - 605 condominium units sold for a total value of $271,681,337; in 2002 - 730 condominiums sold for a total value of $240,178,915; in 2003 - 737 condominiums sold for a total value of $319,748,466; In 2004 - 700 condominiums sold for a total value of $375,033,467; in 2005 - 682 condominiums for a total value of $408,582,315; in 2006 - 435 condominiums for a total value of $351,782,614; in 2007 - 327 condominiums for a total value of $271,290,428.00. In 2008, from 1/1/08 to 10/31/08 - 176 condominium units sold in the West Maui area for a total sales value of $131,164,505.00.
For previous condo sale details, go to our web site, http://www.jamesbfoster.com/condosales.php then scroll down to your choice and click to open the ADOBE pdf. For the time period of 1/1/2008 to 9/30/2008 the average price for a home on Maui was $876,615 which is down 7% for the time period of 1/1/07 to 9/30/07 when the average price was $945,425. For the same time period the average price for a Fee Simple condo on Maui was $984,204 which is up 23% for the same time period when the average price was $799,632 according to the RAM (Realtor Assoc. of Maui) statistics. Condo sales in Wailea, Makena, Kapalua and Kaanapali are having an impact on the Fee Simple Condo average price by increasing it.
Mortgage Rates for week of November 1, 2008 - from First Hawaiian Mortgage - Rates: Houses & Condos Full docs: 6.25% 30yr fixed 1.6.25 pts (6.425 APR) 6.5% 30yr fixed .625 pt (6.580 APR) 6.75% 30yr fixed No Points (6.77 APR) Stated Income: 7.735% 30yr fixed 1.0 pt (7.498 APR) 6.75% 15yr fixed 1.0 pt (6.869 APR) Interest Only: 7.25% 30yr fixed 1.0 pt (7.367 APR) 7.375% 30yr fixed 0.50 points (7.444 APR) To $1M: 7.25% 30yr fixed .50 Points (7.318 APR) for condotels 7% 30 yr fixed 1.5 points (7.163 APR) 7.250% 30 yr fixed 0.75 pt (7.342 APR) (Points include origination fee)
Mortgage Rates for week of October 1, 2008 - from First Hawaiian Mortgage - Rates: Houses & Condos Full docs: 5.875% 30yr fixed 1.75 pts (6.127 APR) 6.125% 30yr fixed 1.25 pt (6.332 APR) 6.5% 30yr fixed No Points (6.591 APR) Stated Income: 7.125% 30yr fixed 1.0 pt (7.323 APR) 6.625% 15yr fixed 1.0 pt (6.938 APR) Interest Only: 6.625% 30yr fixed 1.0 pt (6.8 APR) 7% 30yr fixed No points (7.094 APR) To $1M: 7.25% 30yr fixed No Points (7.338 APR) 6.375% 30 yr fixed 1.25 points for condotels.(6.585 APR) (Points include origination fee)
Mortgage Rates As of August 29, 2008 - from First Hawaiian Mortgage - Condotel Rates: Full Docs: 6.25% 30yr fixed 1.0 pt (6.38 APR); 6.50% 30 yr fixed No Pts (6.57 APR); Stated Income: 6.375% 30 yr fixed 1.0 pt (6.50 APR); FHA: 6.375% 30 yr fixed No Pts (6.40 APR); VA Purchase: 6.50% 30 yr fixed No Pts (6.51 APR); Jumbo-Conf: 6.625% 30 yr fixed No Pts (6.70 APR).
If you would like to view the most current sales statistics for Maui or West Maui Condominiums, you can go to my web site www.JamesBFoster.com and click on Condo Sales in the upper left corner of the home page or go to www.JamesBFoster.com/condosales.php.
Some recent and past news about what is going on in Maui & Hawaii
Weather - As I am writing this newsletter today, November 5, 2008, it is about 84 degrees and beautiful, sunny weather. The next ten days we are expecting stronger winds and predictions for some rain possibly by Monday of next week but the weather is great and the balance of the year is expected to be on the dry side.
Be Careful on the Coral Reefs - The state land board fined a Maui tour boat operator more than a half million dollars for damaging coral reef in October. The Board of Land and Natural Resources found Makena Boat Partners killed, damaged or dislodged 538 individual coral colonies when its Kai Kanani catamaran dropped anchor off the coast of the Maui Prince Hotel last year. The company picks up passengers at Makena Beach and takes them on sailing and snorkeling tours in waters off South Maui. It operates one 49-passenger boat and has a permit to moor one vessel in waters fronting the Maui Prince. An appeal has been filed but Hawaii is serious about protecting the Coral Reefs.
Construction Spending may boost sagging Hawaiian Economy – Governor Linda Lingle has plans to boost the sagging economy by cutting department budgets, increasing capital improvement spending and lowering taxes and fees. The revenue collected by the state is expected to grow by 1 percent through the 2010-2011 fiscal years. However, that is significantly less than the nearly 5 percent revenue upswing that was projected in January, Lingle said. The state Department of Taxation will become much more aggressive in pursuing outstanding taxes owed to the state.
Disney may be coming to the Islands – Walt Disney Parks & Resorts' first venture in the islands would add 830 hotel and vacation time-share rooms, a fantasy-laden water play area and an 18,000-square-foot spa to the rapidly expanding Ko Olina resort in West Oahu. It'll be the first such complex for Disney away from a theme park, combining a 350-room hotel with 480 vacation villas on one of Ko Olina's four man-made lagoons, which already feature a Marriott hotel and time shares, a luxury condominium project and wedding chapels. This would be a great boost to the economy as things continue to slow.
HC&S Specialty Sugar Premium Turbinado – HC&S gets double the price for this specialty sugar at Hawaii’s last sugar plantation in Puunene on Maui. At this plant, ten percent of our sales generate forty percent of their pretax profit. The new, stainless steel refinery has a capacity to make 20,000 tons a year of Premium Turbinado Sugar and 40,000 tons of evaporated cane juice, another form of food-grade sugar. The Puunene mill, in a good year, can produce 200,000 tons of raw sugar, so up to 30 percent could be diverted to the high-margin specialty sugars.
Hawaii is promoting the Tourism Business - Hawaii Visitors and Convention Bureau: www.gohawaii.com is offering new deals, incentives and packages as it searches for solutions to the U.S. economic crisis, turbulent airline industry and Americans holding tight to their wallets. They have kicked off a $4.5 million campaign to lure visitors for the remainder of the year. The effort is part of the more than $12.5 million in emergency funding that has been devoted by the state and businesses to combat a slump in tourism. One key component is promoting Hawaii's value as a destination, which means trying to dispel the perception that the islands have become too expensive. Officials said despite rising airfares, a Hawaiian vacation package costs hundreds of dollars less than compared with last year. Some hotels are offering a complimentary extra night or breakfast, and more businesses are offering two-for-one deals on activities.
Hawaii Superferry Delays Big Island service - Hawaii Superferry Inc. announced it has delayed the introduction of its second ship and the 2009 scheduled launch of service between Oahu and the Big Island for about one year due to the slumping economy and will focus on Maui-Oahu business. The ferry has been maintaining passenger fares at $49 on the Oahu-Maui route - $10 to $20 below the lowest interisland airfares. Hawaii's tourism-driven economy has been shocked by the global economic crisis. According to the latest state figures, Hawaii welcomed 461,051 visitors last month, a decline of 19.5 percent from September 2007 and part of a 9.3 percent drop for the first nine months of 2008. The Superferry is targeting Hawaii residents as its primary market by providing the option of a family taking its own vehicle for a visit to another island.
Hilo Hattie files for Bankruptcy – Well known major retailer of Hawaiian souvenirs and aloha attire founded in 1963 with 256 employees and seven Hawaiian stores and two in California , filed for Chapter 11 bankruptcy protection citing the economic downturn and the slumping tourism industry.
The company said the filing will allow it to move forward with plans to open a new flagship store in Waikiki, as well as to strengthen and stabilize the company. CEO Ted Nelson said, ''We're not closing. We're staying in business. We see this as a fresh start. It's a tough economy, but that just requires us to be better business people and better merchants.''
Price of Gasoline drops below $4.00 – Regular is down to around $3.75 per gallon. Hawaii gas prices tend to fall slower than they rise. A gallon of unleaded gas cost an average of $2.89 nationally about the middle of October, according to AAA. Alaska had the most expensive gas at an average $3.84 per gallon. Oil prices fell below $71 a barrel compared to $79 per barrel a week earlier. Oil cost more than $100 a barrel Sept. 30.
Maui Again Named as “Best Island in the World – Maui’s score of 89.5 was higher than the score for any destination and Kauai finished second, its score of 87.1 topped only by Sydney and Maui. Maui County hotels also scored high in the Top Hawaii Resorts category, with three in the top five. The Four Seasons Resort Maui, which is the only resort in the islands to attain both the AAA Five Diamond and Mobil Five Star ratings, was tops, with a score of 96.0 (also tied for 14th in the world).
Rusty Harpoon has Grand Opening – At the main entrance of the Kaanapali Beach Resort, 2290 Kaanapali Parkway and is now open for business. Chef-owner Suzzette Metcalfe held a grand opening party to celebrate in island style on October 17th. The restaurant opens at 8 a.m. for breakfast, followed by lunch service from 11 a.m. to 5 p.m. Happy Hour is available daily from 2 to 6 p.m. and dinner service will be offered from 5 to 10 p.m. with a late night menu also available from 10 p.m. to 12:30 a.m. For reservations, call 661-3123. For more information, visit www.rustyharpoon.com.
New Mexican Restaurant in Lahaina – Los Pelones Mexican Bar and Grill recently opened by Lahaina restaurant veteran and occupies the space vacated by Compadres Bar & Grill. The hours of operation are from 8 a.m. to midnight and the restaurant serves breakfast, lunch and dinner. The taqueria (food to go window) is open from 10 a.m. to 9 p.m. Steve Austin, who co-owns the restaurant with wife Ashlan, was a nine-year veteran of Compadres, serving as general manager since 2003.
Medical Facilities on Maui - The Association for Improved Healthcare on Maui (AIHM) http://www.aihm-maui.org whose mission is to serve as an advocate for the creation of a system that will provide improved healthcare services to all of the citizens and visitors of Maui County has been making some excellent progress. For more information on making a contribution to this great cause, please visit the web site for AIHM at www.aihm-maui.org/ourfriends.htm. To stay informed of what is transpiring with future approvals of either the Kihei or West Maui hospital, you can send me an email and request a subscription to the “Coconut Wireless” to either my email at Jim@JameBFoster.com or Jan@SunshineRainbows.com
Real Estate & Financial Planning Tips:
Exchanging in Today’s Economy – With appreciation rates moderating and in some case decreasing, many investors see limited or no appreciation in their investment property and for many it will make sense for them to sell their property and do a 1031 exchange.
With almost all real estate sales involving improved property, there is the recapture of depreciation. Section 1250 of the Internal Revenue Code requires that depreciation be recaptured at the current rate of 25%, which is higher than the current long-term capital gains rate. This makes a 1031 exchange very attractive.
Other reasons to consider doing a 1031 tax-deferred exchange in a down market are:
- Diversification (i.e., selling one larger property to acquire numerous smaller properties at today's prices) or relocating investment properties to another area of the country with faster appreciation,
- Exchange raw land which produces no income for an improved property which can be rented to create positive cash flow,
- Exchange into a property that can be used professionally. For example, selling a single-family rental property and purchasing a new property that can accommodate your business, or
- Exchange from fully depreciated property into to a higher valued property that can be depreciated further.
In a down market such as we are experiencing, a 1031 exchange can be very beneficial. Leveraging the cash that may be forfeited in capital gains taxes and/or depreciation recapture makes sense in any market and a 1031 exchange is the vehicle to get it done.
Do not forget, for relinquished property transfers occurring after October 17, 2008, the exchangor may need to obtain an extension of his or her tax return due date in order to receive the benefit of the entire 180-day exchange period. This will apply only in the event that the replacement property will not be acquired prior to April 15, 2009 (for calendar-year non-corporate taxpayers). Make sure you consult your tax advisor for precise guidance on your particular situation.
Tax Assessors Office & Tax Appeals – Do not wait until you receive your new assessments to obtain current market information in your market area. Be proactive and have you information available. Here are the important dates sequentially but the most important is the deadline to file an appeal is April 9th so look for those tax assessment that are mailed out by the county around March 15, 2009 and be ready:
December 31 - Deadline for filing exemption claims and ownership documents which affect the tax year and Deadline for filing circuit breaker applications
January 1 - Assessments set for use during next tax year
March 15 - Assessment notices mailed
April 9 - Deadline for filing tax appeals
May 1 - Certified assessment roll to County Council
June 20 - Tax Rate set by County Council
July 1 - Tax Year Commences
July 20 - First half year tax bills mailed
August 20 - First half year tax payments due
September 1 - Deadline for filing agriculture dedication petitions
January 20 - Second half year tax bills mailed
February 20 - Second half year tax payments
We receive calls on a regular basis and provide letters of Market Value at the time of death to assist in the Probate process for owners of Hawaii real estate. It is always unfortunate when estate planning has not been done and the tax liability has to be dealt with in a short period of time.
Take the time to review with your current financial plans and also estate plans with your advisors. If you do not have trusted advisors ask friends and business associates for recommendations because in the long run it may be the best investment you will make.
In past newsletters, I have mentioned that the easiest way to minimize the tax impact when selling is to do a tax deferred exchange. If you have questions about tax deferred exchanges give us a call. If you are considering selling your property in Hawaii, a tax deferred exchange will exempt you from the 5% HARPTA withholding and also the Federal Capital Gains Tax. Planning in advance for the disposition or acquisition of assets is always a wise decision. Another invaluable tool for sellers in doing a tax deferred exchange is having the option of using tenant-in-common (TICs) for qualifying for replacement properties. Many property owners who currently own underperforming assets can sell those assets, taking advantage of tax deferred exchanges, and turn an underperforming asset such as land into an income producing asset. Call me or send me an email if you would like additional information at 808-661-7994 or email Jim@JamesBFoster.com
If you are contemplating selling highly appreciated real estate during 2008 and would like for us to provide an analysis of how to best structure your transaction, please call us at 1-888-661-7994 or send us and email at Jim@JamesBFoster.com
Useful Internet Sites:
http://sketchup.google.com This is an excellent web site for 3D design from Google SketchUp is software that you can use to create, modify and share 3D models. It's easier to learn than other 3D modeling programs, which is why so many people are already using it. Google designed SketchUp's simplified toolset, guided drawing system and clean look-and-feel to help the user concentrate on two things: getting their work done as efficiently as possible, and having fun while you're doing it.
www.yearbookyourself.com How would you like to see how you'd fit in a few decades ago? Here's a fun place to "picture yourself" in any year you choose – between 1950 and 2000 You (a picture of you) will be stepping out with the current hairstyle and fashions for that year while listening to the music of that era. You get all this along with a running fashion commentary. Remember when --fun and nostalgic
www.phrases.org.uk/meanings A collection of 1,500, fully researched phrase and saying origins, which you can view via the alphabetical list or search box above, or the categorized lists below. Phrases such as "Let the cat out of the bag - Bats in the belfry - As happy as a clam - Think outside the box."
http://www.pandora.com If you love music, use this site to enjoy the type of music you identify – exactly as you ordered it. No downloads – no cost – just a little advertising.
Type in the name of one of your favorite songs or artists a “station” appears that plays songs that are musically similar to the song title or artist you provided. This site is one of the best, try it!
Kindest Regards, Jim Foster
Chase 'N Rainbows Real Estate, Inc.
Toll Free 888-661-7994
Direct Line 808-661-7994
Cell 808-870-5858
Fax 808-667-2957
Real Estate for Sale www.JamesBFoster.com
Vacation Rental www.ChaseNRainbows.com
Email Jim@JamesBFoster.com
If you feel that you have received this newsletter in error, please send an email to Won@JamesBFoster.com and request to be removed with the subject line, “Unsubscribe from Newsletter.” |
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