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August 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 were 165 condominiums for sale in the West Maui area and the total value was $159,356,997.00. At the beginning of August, 2005 there is 166 condominiums for sale in the West Maui area and the total value is $154,446,497.00. Since June of this year the for sale inventory has been around 165 condominiums for sale and we are seeing more of the lower priced units coming on the market and the higher priced units are typically taking a longer period of time prior to sale.
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; for the month of July, 2005 total condominium sales for West Maui was 73 and the total value was $43,969,186.00. Seventeen of these sales were at The Villas at Kahana Ridge and represented $5,404,161.00 of sales. It is a 117 unit condominium and is 100% affordable in the less than 80% to 160% of median income range. They are all 2 or 3 bedroom units, some with lofts an ocean views. When you back these sales out July, 2005 drops to 56 condominium sales and total value of $38,565,025.00.
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. August is shaping up in the West Maui area to be similar to July, using a scale of 1 to 10 with 10 being a good Seller's Market; West Maui is approximately a "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. As of June 30, 2005 the median price for a home in Maui is $735,000 and at the end of June, 2004 the median price for a home was $516,000 according to the Realtor Association of Maui statistics. In Lahaina the median price at the end of June, 2005 is $1,200,000 and at the end of June, 2004 it was $810,000.
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 August 1, 2005 we have 432 condominium sales in the West Maui area at an approximate value of $246,539,649 . If you deduct The Villas at Kahana Ridge 54 sales of $15,273,992.00 it puts us at $231,265,657.00. At this same time last year, July, 2004 there were 433 sales with a value of $234,211,097 so it appears the market is beginning to slow with fewer sales and lower sales dollar volume if you factor in The Villas at Kahana Ridge.
The MLS statistics for the first half,05 are now 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 August 1, 2005 . Just go to the web site and click the tab at the top of the site that says Condo Sales.
Mortgage Rates for August 1, 2005 from Central Pacific Bank - House/Condo: 5.375% 30 fixed 2.0 pts ( 5.60 APR) ; Interest Only: 5.875% 30yr fixed 1.0 pt ( 6.01 APR) ; No Docs: 5.75% 30yr fixed 1.0 pt ( 5.88 APR) ; No Points: 5.50% 3yr ARM No pts ( 6.15 APR) ; Condotel/Int Only: 6.0% 30yr 1.0 pt ( 6.12 APR) ; Construction: 5.375% 3yr ARM 1.0 pt ( 6.14 APR) ; 1031Exchange: 5.625%, 3yr ARM 1.0 pt ( 6.15 APR) ; No Income, 80/20 & Land 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. 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 some web sites to review some of the future development for the West Maui area - www.SAVEWESTMAUI.com - www.kaanapali2020.org and www.kaanapaliland.com
We recently listed and sold two one bedroom units that were each valued in excess of $1,000,000. An owner wanted to purchase the unit we had listed on an upper floor and sell his unit on the lower floor. We completed both sales simultaneously and the seller of one unit had used it as their primary residence and the other unit was an income and investment property for the other seller/buyer. We completed a tax deferred exchange for the seller/buyer so there were not tax consequences at closing.
For a seller to qualify for an IRC 1031 tax-deferred exchange, the qualified property must be held for investment or business purposes. After renting investment homes for 6 to 12 months some investors move in and convert it to their principal residence. Then, after owning and occupying the principal residence at least 24 of the 60 months prior to its sale it can qualify for the IRC 121 principal residence sale tax exemption up to $250,000 (up to $500,000 for a qualified married couple filing jointly). What some are not aware of is the October 22, 2004 tax law change that requires the acquired property be owned at least five years before the principal residence can qualify for the IRC 121 $250,000 to $500,000 sales exemption. The sales date is what matters; the date of acquisition is irrelevant.
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.
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.
For those of you who enjoy or use the internet on a regular basis or use your computer frequently, here are some interesting web sites you may want to visit.
www.ehow.com - How to do just about anything. Ever scratch your head and say, "I wonder how to do that"? Every month over 4 million folks visit this site to learn how to do something from the clear and concise, step by step instructions provided. Whether you want to learn how to build a deck, train your dog to heel, lose weight, negotiate a raise, or fix a clothes dryer you'll find it all. There are thousands of "how to" helpers here along with a handy Google site search function. Some of the main categories are: Automotive, Computers, Finance & Business, Food & Entertaining, Home & Garden, Personal Care & Style, Sports and Travel.
www.salary.com - What should you be paid? Do you know what you are worth? Here's the place to check and see what folks with your talents are being paid today. Just enter your specialty and location and you are provided with a graph showing the base median salary for that specialty. Ever wonder what a short order cook in Juneau , Alaska earns? $34,147.00. How about a Senior Janitor in Great Falls Montana ? $24,319.00.
www.giveanything.com - Can't Miss Gift Store! Panicking for a last minute gift? If not today the day will come - guaranteed. When it does you'll be glad you saved this one. Here's the place to get online universal gift certificates You can send the good looking certificate right to you printer so you can present your gift in person or in a greeting card. For instant delivery you can e-mail the certificate. Your recipient can use your gift card directly at hundreds of online stores including Sharper Image, Linens-N-Things, Sports Authority and Restaurant.com to name just a few. Great place when you are under the gun for a birthday, a new baby, thank you, holiday or corporate gift.
www.gizmodo.com Gadget Heaven! Anyone you know a gadget freak? If so let them know about this site that is dedicated to everything related to gadgets, gizmos, and cutting-edge consumer electronics. In addition you'll find the latest news, reviews and recommendations for products including laptops, cell phones, PDAs, digital cameras, home entertainment and lots more. How about a sink faucet that has LEDs that light up in response to the water temperature. Blue is for cold, red is for hot. Or maybe a tiny 3 ounce cell phone with all the 3G trimmings: 1.3-megapixel camera, video recording, data transfer, and video-conferencing. Something new always happening here. Fun place to stay up with lightning speed change!
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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