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February 4, 2005 – Newsletter for the Maui Market
Aloha! At the beginning of December, 2004 there were 186 condominiums for sale in the West Maui area and the total value was $156,629,640.00. At the beginning of January, 2005 there were 202 condominiums for sale in the West Maui area and the total value was $181,300,850.00 which translates in to a 9% increase in the number of condominium units listed for sale and 15.75% increase in total value. At the beginning of February, 2005 there are 213 condominiums for sale in the West Maui area and the total value is $192,803,740.00 which translates in to a 5% increase in the number of condominium units listed for sale and 6.34% increase in total value. As you can see from these statistics, the inventory is increasing slightly and the perceived value of the sellers has also increased. Prices are continuing it go up but are gradually slowing compared to the previous four year (2000 to 2004) Hot Market. The year end statistics are now available on our web site, just go to the tab in the upper left hand corner and click on condo sales then click on MLS Statistics 2004. In West Maui, using a scale of 1 to 10 with 10 being a good Seller’s Market, West Maui is approximately an “8” and will likely weaken a bit for Sellers as 2005 progresses.
Even though interest rates are beginning to creep upward, they are still relatively low, and it is still a very good time to buy or sell. Properties that are priced according to the market are moving very quickly. Current mortgage rates as of 1/31/05 are: House/Condo loans primary residence 5.00% 2 pts or 5.25% 1 pt 30 year loans; No Doc loans from 5.375% 1 pt 30 yr fixed; Condotel loans 4.875% 1 pt 5 yr ARM; Construction loans 6.00% 30 yr fixed 1 pt and Land loans 7.0% 3 yrs 2 pts and No Income, No Doc, 103% loans are available. These are rate quotes from CityBank and may vary depending on the lender.
In the last couple of days the Federal Reserve Bank moved interest rates up another quarter-point to 2.5 percent Wednesday, February 2, 2005. This leaves many wondering why with less than robust hiring and relatively low inflation. The danger in this case could be that when you increase the interest rates you begin to make investing look unprofitable. Rising rates eventually hit ordinary Americans by increasing monthly payments for credit-card bills, and loans for cars and mortgages. About 10 percent of borrowers have adjustable loans that are already seeing interest increases. Long term rates actually decreased slightly.
The unanimous vote among the Federal Open Market Committee Wednesday, February 2, 2005, marks the sixth time since June that policy-makers pushed up the federal funds rate, the interest that banks charge each other on overnight loans, from its 46-year low of 1 percent. Even at 2.5 percent, interest rates remain at historically low levels. The reasoning behind the Fed’s decision pointed to robust productivity, moderate output and contained inflation as reasons for another rate increase.
With the labor market conditions continuing to improve gradually and the economy performing so well, the Fed is likely trying to get rates back in neutral territory. The U.S. economic activity continues to be healthy - 3.1 percent for the fourth quarter - it was below expectations. And productivity gains have largely kept companies from adding to payrolls. There are expectations that the Fed will continue raising rates by 25 basis points in future meetings between 3 percent and 4 percent.
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. I also post a Vacation Rental Management Report for your viewing by clicking on that tab in the upper left corner of my web site. The fourth quarter, 2004 should be posted soon. If there are any specific condominium complexes that you wish to be notified by email when a condominium becomes available for sale, send me an email as I check the MLS data about four times daily and if a new listing comes on the market I immediately notify any clients who have requested that information. Many owners also like to track what units are selling for in the building where they own which they can do from my site.
Kindest Regards, Jim Foster
Chase 'N Rainbows Real Estate, Inc.
P.O. Box 10398
Lahaina, HI 96761
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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