After reading a recent Pacifc Business article, May Maui home sales off 40%, prices hold, I began to think…if Maui home sales are falling, will property prices eventually drop?
Well, if you read deeper into the article, what you find out is that the median of prices of homes sold on Maui have dropped 14% over the same time last year. But even 14% isn’t that big of a difference compared to declines we’ve witnessed on the mainland, or even in other parts of Hawaii.
The factor we have to look at when looking at a market like Maui is how much new real estate can be built in the area. When you live on an island with little room for development, how far can prices really drop?
One interesting statistic to know would be how much have listing prices changed on Maui. Perhaps we can get one of our Maui real estate experts to answer this question.
Jeff
June 17, 2009
Usually when the amount of homes being sold by that large of percentage prices will follow. As you mentioned the prices dropped by 14%. I agree that is not bad as the mainland and hopefully it will not get that bad. Hawaii is a unique place and a lot of advantages the mainland doesn’t. Every market is a little different.
Dennis
June 18, 2009
Price will drop . The question is how far. The big problem is over building, Especially in west Maui. Plus a lot of investor bought in 2005 and 2006 with those option Adjustable loans. Thinking they could make minimum payments for 5 years then sell for a profit. I think there going to be Hugh amounts of forecloses in 2010 & 2011 . My prediction price drops to 2002 prices Plus 3% per year.
Virtue
July 10, 2009
Maui real estate prices are just beginning to decline.
Real estate prices will continue to decline for the next few years….possibly returning to price ranges of 8 years ago – 2001. The run-up in prices was truly a “bubble”…..and will not return for many years.
The mainland economy is entering a long recession…..jobs are disappearing…..boomers lost much in the 90’s dot-com blow-out and now the stock and real estate losses…..they have to start saving for retirement…..also tourism will significantly decline…..and real estate will return to a level of it’s “true value”. Thus, a house that sold in 2006 for $600,000 bubble price…..but was originally built and sold in 2002 for $265,000……will return to a more “realistic value” of around $325,000 or less.
Maui residents are in for a “wake-up” shock….economically.
Another consideration is the “cost fo going to Maui” for the average working family on the mainland is still way “too high”.
There are simply “cheaper” places to go…..
Justin - Head Web Head
July 13, 2009
@Virtue – last week I might have said your predictions were a little harsh. But this week, I think you’re spot on. Check out my latest post,
http://www.hawaiilife.com/articles/2009/07/maui-real-estate-market-worse-then-we-thought-foreclosures-galore/