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January, 2009 - Newsletter for the Maui Market
Aloha and a Happy New Year. 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 on Tax Deferred Exchanges, Replacement Property and Net Proceeds Statements.
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 - For Sales Condominium Listings on 1-4-09 total 742; there are 41 condo Pending Sales in the West Maui area as follows: 14 at Honua Kai, 4 at Opukea and 3 at West Maui Breakers, all new developments and a variety of others. Honua Kai phase one is suppose to start closing around January 15, 2009, 8 Office Condominiums in the Lahaina Business Park and a variety of other properties for a total of 62 Pending including single family residential. Total sales for the year (1-1-08 to 12-31-08) of condominiums in West Maui were 193 or a monthly average of 16.
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 current inventory is 742 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 742 (at 1-1-09) and on the same month in 2007 it was 410. 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
2007 - In the West Maui real estate market, at the beginning of January, 2007 there were 410 condominiums 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 condos with the total value of $420,941,268.00; April, 2007 - 479 condos with the total value of $429,708,159.00; May, 2007 - 472 condos with the total value of $424,095,260.00; June, 2007 - 455 condos with the total value of $415,187,129.00; July, 2007 - 475 condos with the total value of $432,797,008.00; August, 2007 - 469 condos with the total value of $420,479,301.00; September, 2007 - 474 condos with the total value of $430,914,408.00; October, 2007 - 471 condos with the total value of $423,631,002.00; November, 2007 - 466 condos with the total value of $416,008,907.00; and December, 2007 - 485 condos with the total value of $421,080,117.00. The average number of condominiums for sale on West Maui for 2007 was 462 and the average total value was $416,730,118.25.
2008 - At the beginning of January, 2008 there were 511 condominiums listed for sale with the total value of $445,656,447.00; February, 2008 there were 559 condos with the total value of $500,946,603.00; March, 2008 - 595 condos with the total value of $529,779,322.00; April, 2008 - 647 condos with the total value of $606,635,687.00; May, 2008 - 634 condos with the total value of $583,391,821.00; June, 2008 - 644 condos with the total value of $590,736,279.00; July, 2008 - 680 condos with the total value of $662,919,268.00; August, 2008 - 703 condos with the total value of $693,069,348.00; September, 2008 - 693 condos with the total value of $654,411,079.00; October, 2008 - 673 condos with the total value of $620,032,454.00; November, 2008 - 715 condos with the total value of $652,379,032.00; and December, 2008 - 729 condos with the total value of $660,335,998.00. The average number of condominiums for sale on West Maui for 2008 was 648 and the average total value was $604,191,111.50.
2009 - At the beginning of January, 2009 there were 742 condominiums listed for sale with the total value of $693,143,047.00.
The condominium for sale inventory since July, 2005 has been as low as 165 and is up to 742 for January 1, 2009. The “for sale” inventory on West Maui continues to increase.
Condominium Sales
2006 - The total condominium sales on West Maui during the month of January, 2006 there were 42 sales and the total value was $28,574,643.00; February, 2006, there were 48 sales with total value of $32,995,078.00; March, 2006 - 40 sales with total value of $32,199,584.00; April, 2006 - 43 sales with total value of $41,898,525.00; May, 2006 - 51 sales with total value of $39,644,886.00; June, 2006 - 40 sales with total value of $32,533,500.00; July, 2006 - 30 sales with total value of $26,212,000.00; August, 2006 - 28 sales with total value of $31,885,500.00; September, 2006 - 30 sales with total value of $24,770,000.00; October, 2006 - 29 sales with total value of $23,359,299.00; November, 2006 - 22 sales with total value of $13,414,600.00; and 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 $29,221,467.83 per month.
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; February, 2007 there were 26 sales with total value of $16,330,000.00; March, 2007 - 32 sales with total value of $24,121,000.00; April, 2007 - 27 sales with total value of $16,766,000.00; May, 2007 - 28 sales with total value of $30,774,929.00; June, 2007 - 28 sales with total value of $18,917,000.00; July, 2007 - 21 sales with total value of $13,314,200.00; August, 2007 - 32 sales with total value of $33,258,999.00; September, 2007 - 23 sales with total value of $24,701,900.00; October, 2007 - 42 sales with total value of $28,159,900.00, however this included a packaged sale of 19 units at Aina Nalu in Lahaina; November, 2007 - 15 sales with total value of $15,930,000.00; and December, 2007 there were 13 sales with total value of $13,335,500.00. For 2007, the Month of December saw 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 $16,184,800.00; February, 2008 there were 20 sales and the total value was $14,414,584.00; March, 2008 - 26 sales and the total value was $20,079,000.00; April 2008 - 28 sales and the total value was $20,488,500.00; May 2008 - 22 sales and the total value was $20,055,000; June 2008 - 14 sales and the total value was $11,957,000; July 2008 - 10 sales and the total value was $6,955,999; August 2008 - 13 sales and the total value was $8,055,000; September 2008 - 12 sales and the total value was $6,707,122; October 2008 - 12 sales and the total value was $8,042,500; November 2008 - 10 sales and the total value was $8,444,000; and December 2008 there were 6 sales and the total value was $6,265,000. For 2008, the average monthly sales were 16 sales per month with the average sales value of $12,304,042.08 per month.
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, - 193 condominium units sold in the West Maui area for a total sales value of $147,648,505.00.
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 11/30/2008 the average price for a home on Maui was $836,396 which is down 9% for the time period of 1/1/07 to 11/30/07 when the average price was $923,430. For the same time period the average price for a Fee Simple condo on Maui was $965,199 which is up 18% for the same time period when the average price was $819,282 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 January 5, 2009 - from First Hawaiian Mortgage - Rates: Houses & Condos Full docs: 4.625% 30yr fixed 1.625 pts (4.848 APR) 4.875% 30yr fixed 1.00 pt (5.045 APR) 5.250% 30yr fixed .25 pts (5.355 APR) No Stated Income Available: Interest Only: 5.875% 30yr fixed .50 pts (6.008 APR) To $1M: 5.500% 30yr fixed 1.00 pt (5.60 APR) 5.75% 30 yr fixed .50 points for condotels.(5.882 APR) (Points include origination fee)
Mortgage Rates for week of December 5, 2008 - from First Hawaiian Mortgage - Rates: Houses & Condos Full docs: 5.250% 30 yr fixed 1.00 pt (5.430 APR) 5.500% 30 yr fixed .625 pts (5.648 APR) 5.875% 30 yr fixed No Points (5.968 APR) Stated Income: 6.125% 30 yr fixed 1.375 pts (6.344 APR) 5.875% 15 yr fixed 1.375 pts (6.237 APR) Interest Only: 6.875% 30 yr fixed 1.625 pts (7.118 APR) To $1M: 6.125% 30 yr fixed 1.125 pts (6.337 APR) 6.125% 30 yr fixed 1.625 points for condotels.(6.369 APR) (Points include origination fee)
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)
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, January 4, 2009, it is about 81 degrees and beautiful, sunny weather. Over the next ten days we are expecting sunshine and some rain but mostly beautiful weather.
Walgreens to open second pharmacy in Lahaina Town - Walgreens acquired the former Lahaina Pharmacy at Old Lahaina Center close to the Foodland Market, off Wainee Street. A pharmacy-only Walgreens in Lahaina, formerly Valley Isle Pharmacy at 130 Prison St., is scheduled to open in January 2009. Walgreens has also purchased a site across.
Maui’s Shane Victorino returns for the holidays - The former Wailuku T-ball player who made it to the major leagues and set records this fall with an outstanding performance in Major League Baseball’s 2008 World Series. After the series win with the Philadelphia Phillies, Victorino made his first official appearance back home at Lahaina Cannery Mall. Kids of all ages lined up to have him sign 300 or more assorted balls, hats, T-shirts, photos and even place mats, his beaming mom Joyce standing nearby.
Shane wants to be able to play in the majors another 15 years. His only career goal “is to get better and better each year.” He also hopes to inspire Maui kids to follow in his footsteps.
Bed & Breakfast Bill Passes County Council - Maui County Council today voted on 12/19/08 to approve a new and improved Bed & Breakfast Ordinance on second and final reading. Seven Council Members voted for the measure. The bill now moves on to Mayor Charmaine Tavares. The Mayor recently said that if the Council were to send her a new B&B bill, she would sign it. The Bill will create a much more liberal ordinance than the current highly restrictive B&B ordinance. It will Allow B&Bs to be permitted in both the rural and agricultural districts (currently only allowed in the urban residential districts); Allow for the use of ohanas (currently only allowed in the same dwelling with the owner); Create an expedited administrative approval process in the urban and rural districts and not require Council approval of permits. The bill only applies to properties the owner lives on. It also has significant safeguards to assure that vacation rentals do not overwhelm their host neighborhoods.
Maui Swap Meet Changes Location - The swap meet's new location will be on the Kahului Harbor side of Maui Community College instead of the longtime Puunene Avenue site, where it was located for 28 years. The swap meet will make its permanent home on a 4.5-acre site at the college, with paved pathways, an entrance ramp for people with disabilities and more than twice as much parking for the popular event. Motor vehicle access to the new location is via the Maui Community College parking lot entrance at Wahinepio Street, across from the Maui Arts & Cultural Center. The swap meet is open 7 a.m. to 1 p.m. Saturdays. Admission for customers is 50 cents. The new site has 800 parking stalls available for customers. The Puunene Avenue site had only 300 stalls on the property. Web Site for the Swap Meet is www.mauiexposition.com or the phone number to call for information is 877-3100.
New stores at Lahaina Gateway - Hawaii Golf & Tennis is West Maui’s new 4,000-square-foot, full-service golf and tennis retail source for pro line equipment, fittings, apparel, accessories, repairs and rentals is now open! They are fully stocked with the latest fashions and required equipment to elevate your game. For more information, call the store at 661-9992. Other stores opened are Quiet Storm surf shop and Shoe Fetish. Lahaina Gateway now has 20 stores.
Mercedes-Benz Championship features elite PGA Tour field – The 2009 PGA Tour season-opening event, will be held January 5th through 11th at The Plantation Course in Kapalua. This annual event is one of the most prestigious on the PGA Tour, because only champions from the 2008 season may compete with approximately 34 tour professionals compete on The Plantation Course for all four rounds. Players who qualified are defending champion Daniel Chopra, K. J. Choi, D.J. Trahan, Tiger Woods, J. B. Holmes, Steve Lowery, Phil Mickelson, Brian Gay, Ernie Els, Sean O’Hair, Geoff Ogilvy, Greg Kraft, Andres Romero, Johnson Wagner, Trevor Immelman, Boo Weekley, Adam Scott, Anthony Kim, Sergio Garcia, Ryuji Imada, Kenny Perry, Justin Leonard, Stewart Cink, Padraig Harrington, Richard S. Johnson, Chez Reavie, Vijay Singh, Parker McLachlin, Carl Pettersson, Camilo Villegas, Will MacKenzie, Dustin Johnson, Zach Johnson, Marc Turnesa, Cameron Beckman, Ryan Palmer and Davis Love III.
On Monday and Tuesday, Jan. 5-6, professional practice rounds are slated at The Plantation Course, followed by a Pro-Am Tournament on Jan. 7. The first through final rounds of the tournament will be played Thursday, Jan. 8, through Sunday, Jan. 11, and covered on The Golf Channel. For tickets, call 1-877-772-5425.
Lahaina Bypass To Move Forward – The new route will avoid archaeological sites and construction is scheduled to start in December, 2008. The cultural site being avoided encompasses 32 acres in a triangular-shaped area extending from Kahoma Stream near its conjunction with Kanaha Stream. Construction work in December will include preparation for detours around Lahainaluna Road, which serves Lahainaluna High School, Lahaina Intermediate School, Princess Nahienaena Elementary School and the Kelawea Mauka residential area.
Maui County Council Approves Large-scale Luxury Resort for Makena - The Council voted 5-3 in favor of rezoning 603 acres in South Maui for the 800-unit project. About 100 people testified for and against Makena Resort, a development decades in discussion. The investors, led by Maui developer Everett Dowling and brokerage firm Morgan Stanley, plan to spend $800 million in today's dollars on the 15-year project.
Maui County Seeks To Stabilize Economy - The economic slump has businesses cutting bids on county work, which allows the county to do more with less as it tries to contribute to stabilizing the economy. The County administration has been pushing out contracts and projects that had been stalled because bids were coming in high last year and earlier this year. The number of contracts let in 2008 was double the number issued in October 2007. It helps that the fiscal 2009 budget, which runs to the end of June 2009, allocates $100 million for capital improvements projects along with millions in grants for programs operated by private agencies - including $1.5 million in general community grants and special allocations, such as $1.1 million set aside for environmental programs. The outlook is less positive for the fiscal 2010 budget.
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:
If you have heard of Tenant In Common (TIC) interests and how they can solve the problem of sellers trying to complete a tax deferred exchange here is a web site that you can visit for a short and informative explanation of the process and how it can benefit you. www.ticstrategy.com
Interested in the benefits of selling a property subject to an IRC Section 1031 Tax Deferred Exchange? The type of exchanges which can be used are: the typical exchange; a reverse exchange; and a construction exchange. A replacement property or the property you are exchanging for can be in Hawaii or any other state, within the United States. You can exchange unimproved investment property for a condominium in Maui for investment purposes. Regarding replacement property, there is an alternative referred to as a Tenant In Common Interest or often referred to as TIC. A Tenant In Common (TIC) Investment is for investors who are engaged in 1031 tax exchanges looking for a suitable replacement property. The investor becomes a fractional owner in a residential or commercial property. Here, each Tenant In Common investors possess an undivided - or 'common' interests in the property or designated interests of differing sizes.
Until March 2002, many investors were reluctant to invest their 1031 Exchange proceeds in a TIC property. Until 2002, it was unclear as to whether the IRS viewed the TIC arrangement as an investment in real estate (as required by Section 1031) or as an investment in a security or partnership. Since the IRS issued guidelines (Revenue Procedure 2002-22) governing the structure of these innovative property investments, TICs have become increasingly popular to investors interested in buying interests in large residential or commercial properties traditionally reserved for larger institutional investors. For many, TIC investments can lead to passive, long term income while eliminating the hassle of active property management.
Some of the many benefits offered by a TIC investment include: 1) Investments typically come "Packaged" with management & financing already in place; 2) Provide superior efficiencies in identification, acquisition, financing, closing & operating stages of real estate ownership; 3)Qualifies under Section 1031 as qualified replacement property; 4) Provides opportunity to diversify holdings into larger, institutional-type quality properties; 5) Truly a passive investment; 6) Allows small investors to participate in large industrial, commercial, and residential investments; 7) Provides simplicity by eliminating active property management headaches; 8)Tax-sheltered via depreciation pass through & interest deductions.
Net Proceeds Statement – A good idea to have your real estate agent prepare one for your property as values change. This outlines the various costs a seller has at closings and is an important item to have in your files. If you would like to know what your net proceeds would be if you sold at a particular price, let us know and we can prepare one for you and email you the document in an ADOBE pdf format. If you are not a Hawaii resident, you will have to deal with the Hawaii Real Property Tax Law HARPTA when you property sells and 5% of the selling price is withheld unless you do a tax deferred exchange or have transferred title to a Hawaiian registered entity such as a Limited Liability Company. HARPTA is not a tax. This is a common misunderstanding. HARPTA was enacted to provide a means for the state to collect capital gains taxes from absentee owners. HARPTA is very similar to laws passed by several other states as well as to a federal law that applies to non-US citizens that sell real estate. These are items to discuss with your attorney and accountant.
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 2009 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:
www.google.com/goog411 Do you dislike having to pay to obtain a telephone number? Now Google has an 800 number you can call and ask for any business in the country. They then dial it and connect to it for you. You can use it from a land line or cell phone and, once programmed into your cell phone, you can get connected with one push of a button. In addition to dialing for you, you can request by business category and get a map or a text message with more detail. There is no cost for this service.
http://atmynumber.com Wouldn’t it be convenient to use your phone number for your email address? Next time someone asks for your e-mail address just give them your phone number and instruct them to email you at you phone number. Emails sent to your phone number e-mail address will be forwarded to the email address you register. Another great way to simplify your life.
www.beatmyprice.com Want to make sure you are getting a great price on what you are purchasing? Use this web site to see if any other merchant is offering the object of your attention at a lesser price. Easy to use, just enter the URL of the product you are pursuing and up comes a report showing what other folks are selling this item for.
www.theradio.com Want to have your favorite artist, song or type of music at your beck and call? This great place gives you that and more. Just type your choice into a simple Google type interface and you’re off and running listening to all of your favorites. And when you return it starts right up playing your last choice.
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
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