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July 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 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 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 were 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 were 176 condominiums for sale in the West Maui area and the total value was $166,628,680.00. At the beginning of May, 2005 there were 176 condominiums for sale in the West Maui area and the total value was $166,079,990.00. At the beginning of June, 2005 there were 164 condominiums for sale in the West Maui area and the total value was $161,629,240.00.At the beginning of July, 2005 there are 165 condominiums for sale in the West Maui area and the total value is $159,356,997.00 which translates to a slight reduction of condominium units listed for sale and small decrease in total value.
The total condominium sales for West Maui during the month of December, 2004 was 47 and the total value was $21,974,500.00 during the month of January, 2005 total condominium sales for West Maui was 30 and the total value was $18,658,400.00; during the month of February, 2005 total condominium sales for West Maui was 64 and the total value was $32,380,771.00; during the month of March, 2005 total condominium sales for West Maui was 62 and the total value was $36,995,304.00; for the month of April, 2005 total condominium sales for West Maui was 69 and the total value was $37,681,957.00; for the month of May, 2005 total condominium sales for West Maui was 59 and the total value was $33,964,000.00; for the month of June, 2005 total condominium sales for West Maui was 59 and the total value was $34,565,250.00.
Prices are continuing to go up but are gradually slowing compared to the previous four years (2000 to 2004) Hot Market. For previous condo sale details go to our web site, www.jamesbfoster.com and click on Condo Sales. July is shaping up in the West Maui area to be similar to June, using a scale of 1 to 10 with 10 being a good Seller’s Market; West Maui is approximately an “7” 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. The real estate market is still very active. At May 31, 2005 the average price for a home on Maui was $976,150 which was up 31% from a year ago for the same time period ending May 31, 2004 according to the Realtor Association of Maui statistics.
We have gone 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. Up through July 1, 2005 we have 225 condominium sales in the West Maui area at an approximate value of $125,715,000 . At this same time last year, June, 2004 there were 375 sales with a value of $206,447,097 so it appears the market is beginning to slow with fewer sales and lower sales dollar volume.
The MLS statistics will be available for 2 nd Quarter, 2005 by July 15, 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 July 1, 2005 . Just go to the web site and click the tab at the top of the site that says Condo Sales.
Mortgage Rates as of 6/27/05 from Central Pacific Bank - House/Condo: 5.125% 30 fixed 2.0 pts ( 5.36 APR) - Interest Only: 5.125% 30yr fixed 1.0 pt ( 5.91 APR) No Docs: 5.375% 30yr fixed 1.0 pt ( 5.50 APR) - No Points: 5.625% 30yr fixed 0.0 pt ( 5.69 APR) - Condotels: 4.75% 3yr ARM 1.0 pt ( 5.87 APR) Construction: 5.0% 3yr ARM 1.0 pt ( 5.88 APR) – 1031 Exchange: 5.75% 30yr fixed 1.0 pt (5.88 APR) No Income, 80/20 & 103% loans (Pts include origination)
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.
Here are two web sites to review some of the future development for the West Maui area - www.SAVEWESTMAUI.com - www.kaanapali2020.org and www.kaanapaliland.com
I recently had a person who was interested in our selling property and that she and her sisters had inherited the property from their mother. They wanted to know if they were subject to the Federal Capital Gains Tax and Hawaii Real Property Tax Act (HARPTA). As they received a new "stepped-up basis," which is the market value on the date of the decedent's death (or valuation date used by the deceased's estate), the heirs can sell the inherited property immediately with no capital gains tax to pay. The reason is the heir receives a new "stepped-up basis" of the property market value on the date of death (or alternate valuation used by the deceased's estate). However, if a dying person deeds real estate as a gift, the donee takes over the donor's usually low adjusted cost basis and does not receive the major benefits of a new stepped-up basis on the date of death. T here generally is no need to hurry and sell inherited real estate as you will have a new stepped-up basis for the property. You will owe capital gains tax only on the increased net sales price above the stepped-up basis.
We have the Real Property Tax Rates for July 1, 2005 through June 30, 2006 and can email you an attachment with the new rates and additional information. You can also check your current assessed value and taxes at the Maui County web site for real property taxes at http://www.mauipropertytax.com/
Hawaii has recently increased effective July 1, 2005 , the Real Estate Transfer Tax. It had been 10 cents per $100.00 of actual value. For a $500,000 condominium the tax was $500. There has been no increase for residential, commercial, industrial, hotel, resort, agricultural and conservation with a value of less than $600,000. A 100% increase for properties with a value of at least $600,000 and less than a $1,000,000 and now 20 cents per $100.00 of value. A 200% increase for properties with a value of $1,000,000 or more and now 30 cents per $100.00 of value. For more details send me an email and I can email the information to you.
We discussed in previous newsletters the benefits of selling a property subject to an IRC Section 1031 Tax Deferred Exchange. There are more than one type such as 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. There also 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.
We are assembling a directory and source of information for remodeling and construction on Maui . If you have been involved in the construction of a new residence, the remodeling of a condominium or single family residence and would like to share the experience please email me the information or write it out and mail it to me. I will assemble the information so we will have information pertaining to reliable contractors, sub-contractors, material suppliers and so forth. There have been many condominium owners and property owner who have had bad experiences and if we develop a list of quality contractors, service providers and material suppliers we can support those who provide quality service and quality product. I have started assembling the information and if you have anything to contribute I would appreciate you emailing or mailing the information to me such as: Carpet suppliers, carpet installers, plumbers, granite counter top installers, cabinet installers and suppliers, landscape contractors or maintenance providers, general contractors specializing in condominium remodeling, general contractors specializing in custom homes, architects and etc.
For those of you who enjoy or use the internet on a regular basis or use your computer frequently, here is a web site that is a great source of information relative to computers, software and the internet - http://www.komando.com/ She also does a radio talk show that is syndicated in most states, including Hawaii and is broadcast here on Saturday morning, 990 AM at around 6:30 AM . If you would like to listen go to the web site and check the schedule.
www.talkingstreet.com - Next time you're in Boson, New York or D.C. (expanding to Chicago, San Francisco and New Orleans soon) visit this great place, download a tour map and sign up for a modestly priced celebrity tour that will then be available 24/7. You can take your tour whenever you want - on your schedule, and at your own pace. Each tour is narrated by a big name and "offers a uniquely entertaining, enriching, and easy-to-use experience-full of great stories, expert commentary, eyewitness accounts, historic audio and original music." No one will know you're a visitor - you'll look like all the rest of the natives --- talking on the phone!
www.hospitalcompare.hhs.gov - Moving to a new area -- or just want some intelligence on surrounding hospitals? This tool from the U.S. Department of Health and Human Services will help. Here you can get information on how well the hospitals in your area care for their adult patients with certain serious medical conditions. You can compare the quality of care and get the address, telephone number and other important information for all Medicare-certified hospitals in the United States .
www.benjaminmoore.com - How would you like to see the results of your redecorating without picking up a paint brush? With this great tool you can change the color combinations in your home with a mouse click and if you don't like the looks of your creation just start over and see another masterpiece in two minutes. This color visualization program allows you to select an exterior home or interior room image from a big pictorial library. You can even import an image of your own home and experiment with colors to your hearts content.
www.citysearch.com - Whether you are moving to a new town, traveling or just staying put there is an abundance of information on your area on the web. The trick is to retrieve the important things you need without getting overwhelmed. That's where this great place come s in handy. A quick visit to this great place with your zip code will give you up-to-date information on local businesses, restaurants, shopping, professional services and many entertainment categories such movies, theater, sports, galleries and museums.
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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