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April 1, 2005 – Newsletter for the Maui Market
Aloha!
Don’t forget; if you currently own a property and would like to be notified when there is a new listing in your particular complex, we can set you up to automatically receive the new listings via email. The service is also available for those interested in purchasing a condominium, home, land or other property. If you provide your first and last name, your email address, and the condo complex you wish to be notified of, we can program the system to notify you as new listings become available.
At the end of this newsletter is some excellent advice on preventing or minimizing identity theft written by an attorney who had first hand experience with this problem. Take the time to review at your leisure and pass it on to your family and friends.
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 were 213 condominiums for sale in the West Maui area and the total value was $192,803,740.00. At the beginning of March, 2005 there are 191 condominiums for sale in the West Maui area and the total value was $175,106,140.00. At the beginning of April, 2005 there are 176 condominiums for sale in the West Maui area and the total value was $166,628,680.00 which translates in to a 7.8% decrease in the number of condominium units listed for sale and 4.8% decrease in total value. As you can see from these statistics, the inventory has decreased and the price per unit of total inventory increased from $916,786 per unit to $946,753 of all condominiums offered for sale. Prices are continuing to 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. April is shaping up in the West Maui area to be similar to March, 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. We are beginning to see some price reductions for listed properties that have been on the market for sixty days or so and have not sold.
This past week we went back in to the MLS data base and pulled information for 2000 through 2004. In 2000 there were 654 condominiums sold in the West Maui area for a total value of $209,064,010; in 2001 there were 605 condominiums sold in the West Maui area for a total value of $271,681,337; in 2002 there were 730 condominiums sold in the West Maui area for a total value of $240,178,915; In 2003 there were 737 condominiums sold in the West Maui area for a total value of $319,748,466; In 2004 there were 699 condominiums sold in the West Maui area for a total value of $374,926,467. These are interesting statistics and at the end of 2005 I think the total of condominiums sold will be less that 699 with the overall value increased but not as strong.
The MLS statistics are available for February, 2005 on our web site www.jamesbfoster.com and if you would like those emailed to you in an ADOBE pdf format let us know. We just updated all of the condominium projects listed with current sales and also the category, W. Maui Condo Sales 2005 as of April 1, 2005.
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 3/28/05 are: House/Condo: 5.625% 30 fixed 2.0 pts ( 5.86 APR) 5.875% 30yr fixed 1.0 pt ( 6.01 APR) - No Docs: from 5.875% 30yr fixed 1.0 pt ( 6.02 APR) Pay Option ARM: form 1.0% at NO pts (5.49 APR) Condotels: 4.875% 3yr ARM 1.0 pt ( 6.12 APR) Construction: 6.5% 30yr fixed 1.0 pt ( 6.64 APR) Land: 7.0%, 3yrs 2.0 pts ( 8.02 APR) No Income, No Doc, 80/20 & 103% loans (Pts include origination) These are rate quotes from Central Pacific Bank and may vary depending on the lender. We have a list of lenders on Maui if you would like one emailed to you.
Some tax tips for Vacation Rentals or Second Homes – How frequently you rent out your property is how the IRS will classify it for tax purposes. If you use your home fewer than 14 days a year or less than 10% of the days rented to outsiders each year, whichever is greater, then your home is an investment property. If you use the home 15 or more days or more than 10% of the days rented to outsiders, it’s a second home. If you can declare it as a second home you can collect 14 days rents without paying taxes on it. If it’s an investment, you have to declare the income to deduct for business expenses on the home (advertising, cleaning, maintenance and etc.) In calculating the days you use the property, “work days” don’t count toward the 14 days – 10% test. Keeping a Guest Book will help in the event of an IRS Audit. If a second home the owner can deduct mortgage interest. As a second home, the owner is believed to treat it almost like a primary residence and can deduct mortgage interest. You cannot take a loss if expenses exceed income. Tax laws since 1986 allow those with up to $100,000 in annual adjusted gross income up to $25,000 in losses from rental properties annually. If losses exceed $25,000, they may carry the sum over to future years as long as their income is still at or below $100,000. As incomes rise, the $25,000 cap is reduced: with $100,000 to $150,000 income only 50 cents for every dollar in losses up to $25,000 can be claimed, over $150,000 no loss allowed. Owners of an investment property can take a loss on the sale of their homes, second-home owners can’t. To prepare for an eventual sale, get an appraisal during the year you convert from personal to income-oriented us. If when sold the price is below the appraisal value, you’ll have documentation to support your loss. Appraisals for 2004 taxes can take place up to April 15, 2005. The astute investor will coordinate these matters with the account or CPA.
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 the 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
Minimize Impact of Identity Theft
A client emailed this to me and it is excellent advice, much of it just good common sense. I have friends who have been victims and it created a tremendous turmoil in their lives and this advice could have prevented it or minimized it.
Great ideas to prevent identify theft. ATTORNEY'S ADVICE - NO CHARGE - Read this and makes a copy for your files in case you need to refer to it someday. Maybe we should all take some of his advice!
A corporate attorney sent the following out to the employees in his company.
1. The next time you order checks have only your initials (instead of first name)and last name put on them. If someone takes your checkbook, they will not know if you sign your checks with just your initials or your first name, but your bank will know how you sign your checks.
2. Do not sign the back of your credit cards. Instead, put "PHOTO ID REQUIRED".
3. When you are writing checks to pay on your credit card accounts, DO NOT put the complete account number on the "For" line. Instead, just put the last four numbers. The credit card company knows the rest of the number, and anyone who might be handling your check as it passes through all the check processing channels won't have access to it.
4. Put your work phone # on your checks instead of your home phone. If you have a PO Box uses that instead of your home address. If you do not have a PO Box, use your work address. Never have your SS# printed on your checks. (DUH!) You can add it if it is necessary. But if you have it printed, anyone can get it.
5. Place the contents of your wallet on a photocopy machine. Do both sides of each license, credit card, etc. You will know what you had in your wallet and all of the account numbers and phone numbers to call and cancel. Keep the photocopy in a safe place. I also carry a photocopy of my passport when I travel either here or abroad. We've all heard horror stories about fraud that's committed on us in stealing a name, address, Social Security number, credit cards. Unfortunately, I, an attorney, have firsthand knowledge because my wallet was stolen last month. Within a week, the thieve(s) ordered an expensive monthly cell phone package, applied for a VISA credit card, had a credit line approved to buy a Gateway computer, received a PIN number from DMV to change my driving record information online, and more. But here's some critical information to limit the damage in case this happens to you or someone you know:
1. We have been told we should cancel our credit cards immediately. But the key is having the toll free numbers and your card numbers handy so you know whom to call. Keep those where you can find them.
2. File a police report immediately in the jurisdiction where your credit cards, etc, were stolen. This proves to credit providers you were diligent, and this is a first step toward an investigation (if there ever is one). But here's what is perhaps most important of all: (I never even thought to do this.)
3. Call the 3 national credit reporting organizations immediately to place a fraud alert on your name and Social Security number. I had never heard of doing that until advised by a bank that called to tell me an application for credit was made over the Internet in my name. The alert means any company that checks your credit knows your information was stolen, and they have to contact you by phone to authorize new credit.
By the time I was advised to do this, almost two weeks after the theft, all the damage had been done. There are records of all the credit checks initiated by the thieves' purchases, none of which I knew about before placing the alert. Since then, no additional damage has been done, and the thieves threw my wallet away. This weekend (someone turned it in). It seems to have stopped them dead in their tracks. Now, here are the numbers you always need to contact about your wallet, etc., has been stolen:
1.) Equifax: 1-800-525-6285
2.) Experiene (formerly TRW): 1-888-397-3742
3.) Trans Union : 1-800-680-7289
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