This trend is linked to the closure of illegal vacation rentals, which forced many owners to sell properties that were valuable precisely because they appealed as vacation rentals.
Honolulu, Hawaii (PRWEB) January 31, 2008
Prudential Locations, Hawaii's largest locally owned and operated real estate company, released today a new 2007 year-end report for Maui real estate. The report analyzes real estate trends and indicators for Maui's single-family home and condominium markets, showing that 2007 proved to be a stable year for both sectors.
"Maui's real estate market is significantly affected by the presence of international and mainland investors seeking investment opportunities in paradise," said Leslie Yokouchi, President of Prudential Locations Maui. "This is reflected in 2007 sales and pricing trends in both the single-family home and condominium markets across Maui County, where resort areas continue to remain popular real estate hot spots."
Although the median price for Maui single-family homes dipped 8.2 percent to $641,226 from the record high $698,500 in 2006, almost half of Maui's key market areas experienced growth in median price. The Spreckelsville/Paia/Kuau area reported the highest appreciation, with prices up an impressive 22.6 percent from $665,000 in 2006 to $815,000 in 2007. The substantial price increase in this neighborhood can be attributed to the sale of a few luxury properties, which inflated the area's median price. Additionally, single-family home prices in Lahaina jumped 14.3 percent and prices in Kapalua rose 12.2 percent when compared to 2006.
Even though Maui experienced an overall decline in single-family home prices, the number of sales increased 6.9 percent over the previous year, with the majority of transactions taking place in the $500,000 to $699,000 price range. This boost in sales is a result of new single-family home developments offered at this moderate price point in neighborhoods such as Wailuku and Kahului. There was also growth in the $2 million-plus price point, reflecting the popularity of new luxury homes in the highly-desirable resort area of Wailea/Makena.
"While overall single-family home sales did well in 2007, we noticed that the resale of existing homes in Maui County slowed considerably," said Yokouchi. "This trend is linked to the closure of illegal vacation rentals, which forced many owners to sell properties that were valuable precisely because they appealed as vacation rentals."
The median price for Maui condominiums reached a record high in 2007, ending the year at $550,000--a healthy 7.8 percent increase from $510,000 in 2006. Four out of 11 key condominium neighborhoods reported solid increases in median price. Most notably, condominium prices in the Kapalua area rose 14.2 percent to $1,256,5000, followed by the Napili/Kahana/Honokowai areas where prices increased 8.3 percent to $555,000 when compared to 2006. Conversely, neighborhoods in Kaanapali and Maalaea experienced the largest decline in condominium median price--down 21 percent and 19 percent respectively. This drop in price is related to low sales activity and the overall age of properties in these areas.
In contrast to 2007's single-family home sales trend, condominiums experienced a slight 4.1 percent decline in transactions--especially in sales of condominiums priced in the $400,000 to $499,000 range and below. This is a result of the lack of available inventory in these lower- priced brackets. The condominium market saw the largest increase in transactions within the $500,000 to $599,000 and $1 million to $1.9 million price points.
Unlike 2006, where the highest number of condominium sales occurred just within the $300,000 to $399,000 price range, the majority of condominium transactions in 2007 were spread across a diverse range of price points including the $300,000 to $399,000, $500,000 to $599,000 and $1 million to $1.9 million ranges.
In addition to sales and pricing trends, Prudential Locations' Maui year-end report also takes a closer look at four real estate indicators to measure market trends. Prudential Locations has the state's largest in-house research department, and for the past 30 years has been dedicated to tracking the Hawaii real estate industry.
When consumers evaluate the strength of the real estate market, the first indicator they look at is median price. This report shows Maui single-family home and condominium median prices over the last 30 years, so that consumers can see the long-term trend of rising prices. In 2007, Maui single-family home prices saw the first decline in median price since 1999, while condominiums continue to enjoy an upward price trend.
Coupled with median price is price appreciation, which measures how much a property increases in value over time. Even though the rate of price appreciation has slowed for the Maui real estate market, over the last 30 years, the market continues to show strength.
One way to measure market strength is by examining days on market--the number of days from when a property is listed to when the property goes into escrow. Low number of days on market correlates with strong market conditions. In 2007 when compared to last year, days on market for both single-family homes and condominiums experienced a slight increase--single-family days on market rose to 127 days and condominium days on market increased to 130 days.
The final indicator Prudential Locations looks at in this report is months of remaining inventory, which is the amount of time that the number of current listings would take to sell out at the current rate of sales. On Maui, months of remaining inventory increased for both the single-family home and condominium sectors. Single-family homes reported 10.7 months and condominiums 13.8 months of remaining inventory--while these numbers are up from the 2002 real estate boom, this indicator is still relatively low when compared to the last 30 years.
Prudential Locations will soon be releasing its annual forecast for the Hawaii real estate market in 2008.
Prudential Locations has the largest research database on Hawaii real estate, and is the only source for detailed and concise information on not only the 17 areas identified in the Maui report, but for more than 1,000 specific neighborhoods statewide. The research is available to consumers through Prudential Locations agents at http://www.prudentiallocations.com.
Note to media: Prudential Locations executives are available to comment on the report and on real estate market trends in general. Please call Char Chang, 531-6087, ext. 104, to set up an interview.
About Prudential Locations
Prudential Locations LLC is a multi-faceted real estate company with a rich kama'aina tradition in the islands of Hawaii that boasts over three decades of extensive local experience and connections to offer its clients. To benefit customers, the Prudential Locations website, http://www.PrudentialLocations.com, shows every home, land, condo and real estate listing on Oahu, Maui, Big Island, Kauai, Molokai, and Lanai, with detailed property information to assist its clients. By being a leader in real estate market research and knowledge and continually training more than 280 real estate agents, Prudential Locations produced more than $1 billion in sales in 2007. Prudential Locations Hawaii is ranked in the top 4 percent of all Prudential Real Estate affiliates. Prudential Locations was established in 1969 with offices and affiliates throughout the state, and is an independently owned and operated member of the Prudential Real Estate Affiliates, Inc.