With many markets across the nation weathering a storm of distressed properties, coupled with the potential of a sizeable shadow inventory lurking ahead, many potential buyers are still hesitant to purchase. After all, there are many signs that all the talk about a possible double dip is becoming less of a theory and more of a stark reality.
Most assume that Maui, as a destination location, would be the first to take downward plunges and the last to recover. However, recent statistics and analysis are proving otherwise.
Year to date sales for 2010 (comparing Jan-Aug 2009 to Jan-Aug 2010), statistics show that residential unit sales have risen by 35%, average sold price by 6%, and total dollar volume sold by a whooping 43%. Condo sales (with condos being a popular form of ownership in Maui, particularly for those looking to invest in vacation rentals) have increased by 48%, average sold price declined by 9%, but the overall total condo dollar volume sold increased by 36%.
Although I am a skeptic by nature, but these numbers are too strong to ignore.
Furthermore, in July noted economist Paul Brewbaker, former Chief Economist at Bank of Hawaii and currently of TZ Economics, went in great length to explain how lagging indicators (i.e. high unemployment rates) still give the perception of a recession when in reality we have already gone through the first stages of a long-term recovery. As per his statements, first come increased sales volume (which we are experiencing) and then comes increase in sales prices.
Let’s see how the rest of the year shakes out.
So how can sellers thrive while the local real estate market stabilizes itself?
First, homes must be priced competitively to other comparable properties on the market, including REO’s/Short Sales. It seems like common sense, but many sellers are unwilling to compare their properties to distressed properties (which have been setting the price spectrum lower).
Second, stand out among a sea of seemingly tantamount homes by being in better condition and showing evident pride in ownership.
Lastly, in a marketplace with stringent lending practices/policies, many otherwise qualified buyers are being left out in the cold. By offering seller financing, the pool of potential home buyers is expanded significantly, in ways that REO’s/Short Sales simply cannot duplicate.
It sure is an interesting time to be in real estate.