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June, 2006 - Newsletter for the Maui Market
Don't forget; if you would like to be notified when there is a new listing in the particular complex that you own or that you are interested in, we can set you up to automatically receive the new listings via email. This service is also available for those interested in purchasing a condominium, home, land or other property. If you provide me with 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 beginning of July, 2005 there were 165 condominiums for sale in the West Maui area and the total value was $159,356,997.00; August, 2005 there were 166 condominiums for sale with total value of $154,446,497.00; September, 2005 there were 176 condominiums for sale total with value of $163,215,390.00; October, 2005 there were 177 condominiums for sale with total value of $168,464,220.00; November, 2005 there were 199 condominiums for sale with the total value of $188,377,265.00; December, 2005 there were 231 condominiums for sale with the total value of $222,669,115.00; January, 2006 there were 226 condominiums for sale with the total value of $226,520,200.00;February, 2006 there were 280 condominiums for sale with the total value of $281,793,835.00; March, 2006 there were 297 condominiums for sale with the total value of $286,082,559.00;April, 2006 there were 350 condominiums for sale with the total value of $317,599,199.00; May, 2006 there were 354 condominiums for sale with the total value of $321,932,077.00; and at the beginning of June, 2006 there are 362 condominiums for sale in the West Maui area and the total value is $333,616,070.00 The condominium for sale inventory since July, 2005 has been as low as 165 and is up to 362 for June 1, 2006. The “for sale” inventory continues to increase.
The total condominium sales for West Maui during the month of August, 2005 were 40 and the total value was $21,749,104.00; for the month of September, 2005 total condominium sales were 51 and the total value was $36,318,521.00; for October, 2005 total condominium sales were 32 and the total value was $18,973,291.00; for November, 2005 total condominium sales were 38 and the total value was $28,453,380.60 ; for December, 2005 total condominium sales were 43 and the total value was $25,171,967; for January, 2006 total condominium sales were 36 and the total value was $23,362,643.00;for February, 2006 total condominium sales were 44 and the total value was $30,594,578.00; for March, 2006 total condominium sales were 36 and the total value was $30,194,584.00; for April, 2006 total condominium sales were 42 and the total value was $41,368,525.00; and for the month of May, 2006 as of 6/1/06 in the MLS data, total condominium sales were 45 and the total value was $35,430,886.00 The total condominium sales for August, 2005 was 40; September, 2005 was 51; October, 2005 was 32; November, 2005 was 38; December, 2005 was 43; January, 2006 was 36; February, 2006 was 44; March, 2006 was 36; April, 2006 was 42; and May, 2006 was 45.
For previous condo sale details, go to our web site, www.JamesBFoster.com and click on Condo Sales. For the time period of 1/1/2006 to 4/30/2006 the average price for a home on Maui was $964,194.00 which is up 3% from a year ago for the time period of 1/1/05 to 4/30/05 when the average price was $934,731.00. For the same time period the average price for a Fee Simple condo on Maui was $709,539.00 which is up 39% from a year ago for the same time period according to the RAM statistics.
We have gone in to the MLS database and pulled information for 2000 through 2005. In 2000 - 654 condominiums sold in the West Maui area for a total value of $209,064,010; in 2001 - 605 condominiums 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 - 698 condominiums sold for a total value of $374,342,467; and in 2005 - 672 condominiums for a total value of $402,340,315.00. To date for 2006 (January thru May) 218 condominiums have sold for a total value of $171,098,716.00.
Mortgage Rates as of 5/29/06 from Central Pacific Home Loans – Hse/Condo: 6.125% 30yr fixed 2.0 pts ( 6.35 APR); 6.375% 30yr fixed 1.0 pt ( 6.5 APR); 6.625% 30yr fixed No Pts (6.67 APR). No Docs: 6.5% 30yr fixed 1.0 pt ( 6.63 APR). Hse/Condo: 6.25% 15yr fixed No Pts ( 6.31 APR) Condotel: 6.5% 30yr fixed 1.0 p t ( 6.63 APR) FHA: 6.375% 30yr fixed No Pts (6.4 APR).
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. 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.
Some recent news about what is going on in Maui.
Office & Commercial Space – A shortage is driving up costs and is being made worse by a shortage at the Kahului Harbor. Vacancy is under 5% and worse for warehouse space. Adding to the problem is the situation where there is no zoned property to build a warehouse anywhere in Central Maui.
Hawaii Airports – Governor Linda Lingle has presented a $2.3 billion airports plan that would upgrade the airports in Hawaii to world-class standards. On Maui, the plans over the next five years, call for building a new airport road to the Hana Highway, resurfacing runways and taxiways, completing alien species detection and cargo facilities and expansion of the ticket lobbies.
Supper Ferry & Disaster – As we all know, a positive event for one person can mean disaster for another. Young Brothers, Ltd, who has a monopoly on inter-island barge traffic, warned that Maui faces “chaos at the Kahului Port” where the Super Ferry is proposed to dock. The problem emanates from both the Super Ferry and Young Brothers Ltd being forced to share an already crowded Pier 2 in 2007. More space is needed but it is not going to happen. This has potential for increased shipping times and further shortages for a variety of products and increased construction costs as a result.
Hawaii & Energy Reform – State lawmakers this year passed meaningful energy reform through two omnibus energy package bills. Hawaii State imports more fossil fuel than any other state. The state is now focusing on the potential for solar and wind resources to be developed. This is a clear message that Hawaii is ready to move away from its crippling dependence on fossil fuels. The ideal is for the state to cleanly generate all of its electricity and then use that energy to help power Hawaii’s cars and to achieve this goal in the next ten years.
Dr. Beach Names Maui – The best kept secret winds up being D.T. Fleming Beach in the Kapalua area. Want to read more? Go to the web site www.drbeach.org What they say about Maui, “It’s one of the sunniest places in the world. What you call winter there everybody else calls a nice day.”
DOT and the Lahaina Bypass – The State Deputy Transportation Director, Brennon Morioka, said at a meeting, “In the end, completion of the Lahaina bypass falls on three entities, state and county government and community residents.” If the West Maui residents or commuters want it funded and constructed, they need to attend the upcoming hearings and let their county and state officials get the message loud, clear and often. Traffic congestion is having an impact on tourism and the impact will only increase in the future.
Traffic Impact Fees on Maui – All residents and commuters to West Maui should be actively involved in communicating with the Maui County Council Members and convey the absolute necessity of traffic impact fees for all of Maui County and opposition to any new development unless traffic impact fees are paid in advance of development permits. The current infrastructure is woefully inadequate to cope with the developments already planned for West Maui.
Medical Facilities on Maui – For details on the proposed West Maui Hospital go to www.WestMauiHospital.org and for details on the proposed South Maui Hospital go to www.malulani.org Unfortunately, Maui is not the place to be if an individual has any serious health problems. As in any state, there is a Certificate of Need (CON) process that has to be followed for additions to existing hospitals, new hospitals, surgery centers and so forth. It is often a costly and bureaucratic maze and too often politics are a key factor in the approval and issuance of the CON. We need both facilities on Maui and the message needs to be sent to our lawmakers and officials to allow both facilities to proceed. All Maui residents and tourists will greatly benefit if the Certificates of Need are approved.
Real Estate Tips
Selling Property in Hawaii – The tax liability a seller has depends on whether they are a Hawaii resident on a non-resident. If a non-resident, they will typically have a tax liability for the Conveyance Tax, Hawaii Capital Gains Tax (HARPTA), and Federal Capital Gains Tax. A Foreign Property owner will have a tax liability as a result of the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) An Estimated Seller’s Net Proceeds Statement can be prepared for an owner thinking about selling their property which will estimate the various deductions against the selling price.
The Conveyance Tax - in Hawaii, effective July 1, 2005, depending on the type and value of the property being conveyed, ranges from ten cents ($.10) to thirty-five cents ($.35) on each one hundred dollars ($100) of actual and full consideration. (Act 156, Session Laws of Hawaii 2005) The conveyance tax is imposed on all (1) transfers (2) of ownership or interest in real property (3) through deeds, leases, subleases, assignments of lease, agreements of sale, assignments of agreements of sale, instruments, writings, or other documents, unless the transfer is specifically exempted.
Multiple Offers – If a buyer is involved in a situation where there are multiple offers they can have their agent include an escalation clause in their offer. An escalation clause provides that the purchase price will be a certain amount higher than the highest competing offer, not to exceed a cap. The buyer’s agent should explain in detail the positives and negatives of an escalation clause in Multiple Offer situations.
Counteroffers – A seller should always provide a written counteroffer no matter how far below the listed price a buyer submits an offer for. The seller will accept the offer as written, reject the offer or make a counteroffer. As we transition from the seller’s market of the last five years to a buyer’s market, the seller should take this in to consideration.
Acquisition Indebtedness & Home Equity Indebtedness – The property owner should make sure the transactions are structured so the interest they pay is deductible or so they receive the maximum allowable deduction. Review your transaction in advance with your agent and accountant to insure you are in compliance.
Taxation of Profit – Know in advance of selling what your approximate tax liability is going to be so there are no surprises whether selling investment property or the home. Determine what your “adjusted basis” is and how this is also applicable on the purchase or sale of options.
Tax Consequences for Sale of Personal Residence – IRC Code Section 121 now allows a taxpayer to exclude up to $250,000 ($500,000 for certain married taxpayers filing joint returns) of gain realized on the sale or exchange of a principal residence if certain ownership and use requirements are met. The $250,000 exclusion rule applies if, during the five-year period ending on the date of the sale or exchange, the property has been owned and used by the taxpayer as the taxpayers principal residence for periods aggregating two years or more.
Passive Loss Rules – Income from Limited Partnerships, all rental activities (with a partial special allowance for some real estate), and any other business in which the owner does not materially participate. Losses from these activities are deductible only against profits from a passive activity, or on disposition of that activity.
Useful Internet Sites:
www.FruCall.com - This is a high powered price-comparison shopping service that blends the benefits of in-store shopping with the flexible nature of shopping online. And it’s easy. Just fire up your cell phone (or any phone) with the product in hand and enter the UPC code. This neat service immediately searches the on-line database gives you the Internet prices for your product - regardless of where you are.
http://SoftVoile.com/ClipDiary - The Microsoft Windows Clip Board overwrites any copied material every time you copy something new. Here is a solution that is a great little utility that will record everything placed on the clipboard so you will never lose data once copied. Any time you want, you can see your clipboard history and select and paste any item - easily and exactly when you need it.
www.LocalHarvest.org – Here is a location you can locate where the local farmers bring the freshest, healthiest, most flavorful food that’s grown close to you. Just click on the map provided or enter your zip code to get the what, when and where about the people who bring you all this goodness.
www.SurfTheNetSafely.com - A tech savvy college professor has created a fine primer on Internet safety where he has information on all of the "nasties" out there -- along with tips on how to cope with all this bad stuff.
www.PhoneDog.com - One visit will help to take the mystery out of telephone service pricing and terms, as this independent, privately held company objectively ranks each long distance plan. Make a quick comparison of phone deals in your area, both regular land line and cellular. Once you enter your location you'll see a list of over 20 companies ranked by estimated annual savings along with long distance and in-state rates plus any other costs. One click on the Company name brings up detailed information regarding this particular plan.
http://www.Pandora.com/ If you love music, use this site to enjoy the type of music you identify – exactly as you ordered it. No downloads – no cost – just a little advertising. Type in the name of one of your favorite songs or artists, a “station” appears that plays songs that are musically similar to the song title or artist you provided. This site is one of the best! Try it!
http://www.Komando.com/ This is a great site for staying current on new technology, new software and internet issues.
Kindest Regards,
Jim Foster
Chase 'N Rainbows Real Estate, Inc.
P.O. Box 10398
Lahaina , HI 96761
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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