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August, 2007 - Newsletter for the Maui Market
Aloha! Here is your eNewsletter from Jim Foster
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Make sure you check out the Useful Internet Sites at the end of this newsletter which includes some valuable information.
Don't forget! We provide a free Automatic E-mail Notification Service that goes out to specific recipients when ever a new listing becomes available for a particular condominium complex. Each of these notifications includes a link to view the details of the brand new listing in the MLS. We DO NOT SHARE YOUR EMAIL ADDRESS or your contact information with anyone. To subscribe to our Automatic E-mail Notification Service, please send Won an email at Won@JamesBFoster.com with your first and last name, your email address, and the condominium property you wish to be notified of.
Another service we provide is the Real Estate Market eUpdates which is sent out periodically to inform potential buyers and owners of specific condominium properties about the real estate market activities at those properties. This service is provided exclusively for those interested or owns a condominium property on West Maui. If you would like to subscribe to the Real Estate Market eUpdates or to get a list of all condominium properties that are included in the eUpdates, email Won at Won@JamesBFoster.com.
Property for Sale in New Developments in West Maui
A new commercial development in Lahaina - New Class “A” three story ocean view professional condominium office complex with 8 out of 18 suites available from 847 square feet to 1495 square feet with completion anticipated to be the summer of 2008. There are also going to be true Showroom/Flex Bldg condos with 4 out 10 units available from 800 square feet to 1600 square with completion anticipated to be the summer of 2008. Contact us for more detailed information as to what is available.
A new residential development at Kapalua Bay will be comprised of just 84 three- and four-bedroom condominiums, in four intimate, low-rise clusters, located in the very heart of the property. Beginning at the shoreline and terraced up a gentle slope, each Private Residence will offer its own distinctive ocean views and classic Hawaiian sense of place. Residences will span from 3,002 to 4,271 square feet, including 600 to 1,150 square-foot lanais, celebrating Hawaii’s lively indoor-outdoor lifestyle. Uninterrupted vistas of Lanai and Molokai and dramatic sunsets will form the backdrop for each heavenly day.
A new condominium villas development - These Villas will be located in eight separate buildings on the twenty four acre site of the old Royal Lahaina Resort; the first resort developed at Kaanapali Beach and will consist of two bedroom units from 2,482 square feet up to four bedroom units with 4,807 square feet. If you would like more information please contact Jim at 1-888-661-7994 or send an email to Jim@JamesBFoster.com
A newly remodeled resort condominium property in the heart of historic Lahaina. Located within the Natural Historic District of 19th century Lahaina, it is unlike any other. With nearly nine acres of property, it presents the first opportunity to purchase completely redesigned fee-simple condominium residences in downtown Lahaina in over a decade.
A new condominium development - Located in Lahaina and consisting of two bedroom and three bedroom condominiums across the street from the Cannery Mall and Lahaina Gateway. Sizes range from 1,239 square feet to 1,321 square feet for the three bedroom units up to 1,820 square feet with a home office 10’-6” X 11’. The two bedrooms are approximately 1,201 to 1,231. This is in the pre-construction stage and for sales information you can call Jim at 1-888-661-7994 or send an email to Jim@JamesBFoster.com.
A New Land Development - 28 fee simple ocean view agricultural-zoned lots set on 450 acres of West Maui's historic lands. The 28 lots offered for sale are from 2.79 acres to 13.27 acres and range in price from $1,125,000 to $1,395,000. Two water meters and underground utilities to each lot. CC&R's do not allow any further subdivision. Just 20 minutes to Kihei/Wailea, Kahului and Kaanapali, directly across the street from Ukumehame Beach Park and famous "Thousand Peaks" surfing beach. Access by appointment only. See attached "Associated Project Documents". Two water meters and underground utilities to each lot. The CC&R's do not allow any further subdivision. The land offers residents some of the most breathtaking views imaginable - dramatic mountains and valleys to the East, and 180 degree ocean views to the West overlooking the islands of Lana'i and Kaho'olawe. With preservation lands to the North and South, you can rest assured that your privacy and views will be protected forever. Directly across the street, and well within strolling distance, you'll find Ukumehame Beach Park and world-famous "Thousand Peaks" surf break. For sales information you can call Jim at 1-888-661-7994 or send an email to Jim@JamesBFoster.com.
A new condominium development - Honua Kai - Located on the last stretch of beachfront in Ka'anapali, Honua Kai is the first whole ownership condominium resort to be built on the beach in over 20 years. Amenities include three spectacular pools, a boutique spa, underground parking with valet for owners and the recently announced Duke's Maui restaurant. Currently available is a one bedroom for $760,000 with 615 s.f.; 2 two bedrooms at $1,650,000 with 1,230 s.f. and one at $1,950,000 with 1,315 s.f.; and 3 three bedrooms at $2,100,000 with 1,610 s.f., $3,850,000 with 2,230 s.f. and $5,600,000 with 2,715. s.f. For sales information, you can call Jim at 1-888-661-7994 or send an email to Jim@JamesBFoster.com.
A new residential development in the Wailea area - Papali covers 10 expansive acres with only 24 homes - each a single family residence with two private entries and a generous amount of privacy. Because Papali is nestled on a gently-sloping site that’s terraced into four building “benches”, each and every residence commands a breathtaking ocean view. There are no bad locations. Low-pitched roofs and low-growth landscaping ensures each home’s view is protected.
A new residential development in the Wailea area - Ho'olei features spacious two-story town homes with finely appointed interiors, private elevators, and attached garages, marrying the virtues of a free-standing residence with the convenience of condominium living. Ho'olei has broad, west-facing ocean views and is surrounded on three sides by the Wailea Blue Golf Course. Located just across Wailea Alanui Drive from the Grand Wailea Resort Hotel & Spa and the Four Seasons Resort Maui, Ho'olei sets the standard for beauty and quality in planning, design and construction.
A luxury home community in Wailea area - Kanani Wailea, the latest offering from Pacific Land & Homes, is a planned community consisting of thirty-eight spacious homes with spectacular ocean views. The single-family homes, designed with old Hawaii charm and new Hawaii elegance, will have the amenities of condominium living, including a recreation center, swimming pool, security and maintained landscaping.
A luxury home community in Wailea area - Kai Malu offers maintenance-free living in attached single-family homes featuring luxury appointments and unparalleled quality. The homes are designed for indoor/outdoor living, taking advantage of the natural tropical environment and the magnificent views of ocean, mountains, islands and sunsets. All of these elements combine to offer a special place where residents can enjoy the much sought after Hawaiian lifestyle in the heart of Wailea, on the best island in the world, Maui.
The West Maui real estate market continues to transition from a Seller’s market to a Buyer’s market. The current inventory of West Maui condominiums for sale is now at 469 and seemed to peak at 491 on April 18th and has gone down since. Properties are requiring more time to sell and Buyers have a much larger inventory of properties for sale to choose from. If you’re curious about current trends in Maui real estate and where the market is headed, the answer is - it depends on Location - it depends on if it is condominium or single-family residential - it depends on whether you look at volume, average or median prices. The current Maui real estate market looks steady with minor variations.
Condominiums for Sale in - In the West Maui real estate market, 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 - 166 condominiums with the total value of $154,446,497.00; September, 2005 - 176 condominiums with the total value of $163,215,390.00; October, 2005 - 177 condominiums with the total value of $168,464,220.00; November, 2005 - 199 condominiums with the total value of $188,377,265.00; December, 2005 - 231 condominiums with the total value of $222,669,115.00; January, 2006 - 226 condominiums with the total value of $226,520,200.00; February, 2006 - 280 condominiums with the total value of $281,793,835.00; March, 2006 - 297 condominiums with the total value of $286,082,559.00; April, 2006 - 350 condominiums with the total value of $317,599,199.00; May, 2006 - 354 condominiums with the total value of $321,932,077.00; June, 2006 - 362 condominiums with the total value of $333,616,070.00; July, 2006 - 392 condominiums with the total value of $346,937,598.00; August, 2006 - 393 condominiums with the total value of $344,119,142.00; September, 2006 - 413 condominiums with the total value of $369,322,455.00; October, 2006 - 408 condominiums with the total value of $366,608,574.00; November, 2006 - 407 condominiums with the total value of $357,086,324,00; December, 2006 - 428 condominiums with the total value of $361,399,109.00; January, 2007 - 410 condominiums with the total value of $372,238,031.00; February, 2007 - 431 condominiums with the total value of $393,681,669.00; March, 2007 - 458 condominiums with the total value of $420,941,268.00; April, 2007 - 479 condominiums with the total value of $429,708,159.00; May, 2007 - 472 condominiums with the total value of $424,095,260.00; June, 2007 - 455 condominiums with the total value of $415,187,129.00; July, 2007, there were 475 condominiums with the total value of $432,797,008.00; and at the beginning of August, 2007 there are 469 condominiums for sale in the West Maui area with the total value of $420,479,301.00. The condominium for sale inventory since July, 2005 has been as low as 165 and is up to 469 for August 1, 2007. The “for sale” inventory on West Maui continues to increase.
Condominium Sales 2006 - The total condominium sales for West Maui during the month of January, 2006 there were 42 sales and the total value was $28,574,643.00; for February, 2006 there were 48 sales and the total value was $32,995,078.00; for March, 2006 there were 40 sales and the total value was $32,199,584.00; for April, 2006 there were 43 sales and the total value was $41,898,525.00; for May, 2006 there were 51 sales and the total value was $39,644,886.00; for June, 2006 there were 40 sales and the total value was $32,533,500.00; for July, 2006 there were 30 sales and total value was $26,212,000.00; for August, 2006 there were 28 sales and the total value was $31,885,500.00; for September, 2006 there were 30 sales and the total value was $24,770,000.00; for October, 2006 there were 29 sales and the total value was $23,359,299.00; for November, 2006 there were 22 sales and the total value was $13,414,600.00; for December, 2006 there were 30 sales and the total value was $23,169,999.00. For 2006, the monthly average sales were 36 sales per month with the average sales value of $29,221,468.00 per month.
Condominium Sales 2007 - The total condominium sales for West Maui during the month of January, 2007 there were 37 sales and the total value was $33,091,000.00; for February, 2007 there were 26 sales and the total value was $16,330,000.00; for March, 2007 there were 32 sales and the total value was $24,121,000.00; for April, 2007 there were 27 sales and the total value was $16,766,000.00; for May, 2007 there were 28 sales and the total value was $30,774,929.00; for June, 2007 there were 28 sales and the total value was $18,917,000.00; and for the month of July, 2007 as of 8/1/07 in the MLS data, there were 21 sales and the total value was $13,314,200.00. The monthly average sales were 28 sales per month with the average sales value of $21,902,018.00 per month.
The total condominium sales for August, 2005 was 52; September, 2005 - 58; October, 2005 - 38; November, 2005 - 48; December, 2005 - 47; January, 2006 - 42; February, 2006 - 48; March, 2006 - 40; April, 2006 - 43; May, 2006 - 51; June, 2006 - 40; July, 2006 - 30; August, 2006 - 28; September, 2006 - 30; October, 2006 - 29; November, 2006 - 20; December, 2006 - 30; January, 2007 - 37; February, 2007 - 26; March, 2007 - 32; April, 2007 - 27; May, 2007 - 28; June, 2007 - 28; and July, 2007 was 21.
For previous condo sale details, go to our web site, www.JamesBFoster.com and click on Condo Sales. For the time period of 1/1/2007 to 6/30/2007 the average price for a home on Maui was $970,349.00 which is down 3% for the time period of 1/1/06 to 6/30/06 when the average price was $996,805.00. For the same time period the average price for a Fee Simple condo on Maui was $760,035.00 which is down 3% for the same time period when the average price was $786,552.00 according to the RAM (Realtor Assoc. of Maui) statistics. Condo sales in Wailea/Makena, Kapalua and Kaanapali impacting the Fee Simple Condo average price.
We have gone in to the MLS database and pulled information for 2000 through 2007. In 2000 - 654 condominium units sold in the West Maui area for a total value of $209,064,010; in 2001 - 605 condominium units 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 - 700 condominiums sold for a total value of $375,033,467; in 2005 - 682 condominiums for a total value of $408,582,315; in 2006 - 435 condominiums for a total value of $351,782,614. In 2007, from 1/1/07 to 8/1/07 - 200 condominium units sold in the West Maui area for a total value of $153,849,129.
Mortgage Rates for week of July 30, 2007 - from Town Island Mortgage, LLC -
Rates: Houses & Condos Full docs: 6.125% 30yr fixed 2.25 pts (6.38 APR); 6.375% 30yr fixed 1.0 pt (6.50 APR); 6.625% 30yr fixed No Points (6.71 APR); No Docs: 6.50% 30yr fixed 1.0 pt (6.63 APR); 6.125% 15yr fixed 1.0 pt (6.32 APR); Interest Only: 6.75% 30yr fixed 1.0 pt (6.88 APR); and To $1M: 6.625% 30yr fixed No Points (6.71 APR). No Income, 100%, & Stated Land loans, too (Pts incl. 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 or go to www.JamesBFoster.com/condosales.php.
Some recent news about what is going on in Maui.
Weather - As we progress in to August, the weather continues to be fantastic and has been around 85 degrees during the day and cooler in the evening. Today, it is 79 degrees, slightly overcast with light trade winds. Lucky to be on Maui, come visit and enjoy!
Dry Weather and Fires on Maui - After the 2,600 acres of fires in the Launiopoko area and south, we experienced another brush fire that burned 400 acres above Wahikuli Subdivision, which is just south of the Civic Center in Lahaina. The blaze grew to a mile-long a half-mile wide. The fire was burning about 1.5 to 2 miles away from the new Hawaiian homestead, Villages of Leiali’i, the fire burned an additional 100 acres in 15-20 mph winds.
Halloween Parade on Front Street - The Cultural Resources Commission voted recently to allow the Lahaina Halloween event to continue this October. This has been a celebration that draws tens of thousands to the Front Street area from other islands and the mainland and is like a mini Mardi Gras celebrated in New Orleans.
Maui Traffic Center - The measure, House Bill 1605, would allocate $400,000 to begin the design of an Intelligent Traffic System (ITS) portion of the Maui County Traffic Control Center. By putting up the $400,000 for the plan, the state Dept. of Transportation(DOT) could then submit the plan and have it qualify for federal funding to implement it with the possibility of the federal government funding 80% of the cost.
Maui County purchases Open Space - Maui county recently paid a property owner $1,500,000 for property of 21,524 square feet along Front Street, they had an opportunity to purchase in 2001 for $40,000. The owner after purchasing the property received a Shoreline Management exemption and building permits to build a 940 square foot house without environmental review or public input. Then a coalition of neighbors protested the action.
Maui Beaches Eroding - Sandy beaches are endangered on Maui but progress is being made in that area. A coalition from the Napili and Kapalua area are working with Sea Engineering, Inc from Oahu to provide an analysis of sand quality to determine suitability for beach nourishment, beach profiles to determine volume of sand needed on each beach, evaluation of further steps, permits needed an time and budget for the project. The work should begin this fall.
Medical Facilities on Maui - The Association for Improved Healthcare on Maui (AIHM) http://www.aihm-maui.org whose mission is to serve as an advocate for the creation of a system that will provide improved healthcare services to all of the citizens and visitors of Maui County has been making some excellent progress. For more information on making a contribution to this great cause, please visit www.aihm-maui.org/ourfriends.htm. To stay informed of what is transpiring with future approvals of either the Kihei or West Maui hospital, you can send me an email and request a subscription to the “Coconut Wireless” to either my email at Jim@JameBFoster.com or Jan@SunshineRainbows.com
Space still available in the new Commercial project in the Lahaina Business Park - Located on the mountain side of Lahaina Cannery Mall and Honoapiilani Highway, a new Business Center is being developed that will be comprised of seven entitled, contiguous, commercially zoned parcels along Kupuohi Street totaling 3.27 acres, and an additional noncontiguous, 20,000-square-foot lot on Ulupono Street. Zoning allows for M-1 commercial mixed use. Construction of Phase I is scheduled to begin this month. Plans call for the development of a Class A, three-story, ocean view professional office building and a showroom/industrial building. Showrooms will range in size from 800 to 3,200 square feet, with prices for available spaces ranging from $358,000 to $675,000. Office sizes will range from 847 to 1,495 square feet, prices for available office spaces check in at $475,000 to $771,000.
Lahaina Bypass Status - Construction of the Lahaina Bypass has been delayed once again. Archaeological sites were discovered during recent field survey. More updates in September.
Superferry for Hawaii - Judge Joel August issued a “partial” order this week requiring the Department of Transportation to respond quickly with a new, adequate assessment of traffic impacts. The original assessment had led to a finding of no significant impact was inadequate.
Real Estate & Financial Planning Tips
The Old Standard real estate contract, known as the Deposit Receipt Offer & Acceptance (DROA) has now been replaced by the new standard real estate contract and is called “Purchase Contract” (RR2-1). If you would like a copy of the new contract, send an email to me with your request or call me on the phone 1-888-661-7994 and we will mail one to you.
An excellent idea for owners or prospective sellers is to have a Net Proceeds Statement prepared as property values change. This outlines the various costs a seller has at closings and is an important item to have in your files. If you would like to know what your net proceeds would be if you sold at a particular price, let us know and we can prepare one for you and email you the document in an ADOBE pdf format. If you are not a Hawaii resident, you will have to deal with the Hawaii Real Property Tax Act (HARPTA) when your property sells and 5% of the selling price is withheld unless you do a tax deferred exchange or have transferred title to a Hawaiian registered entity such as a Limited Liability Company. HARPTA is not a tax. This is a common misunderstanding. HARPTA was enacted to provide a means for the state to collect capital gains taxes from absentee owners. HARPTA is very similar to laws passed by several other states as well as to a federal law that applies to non-US citizens that sell real estate called FIRPTA. These are items to discuss with your attorney and accountant.
In past newsletters, I have mentioned that the easiest way to minimize the tax impact when selling is to do a tax deferred exchange. If you have questions about tax deferred exchanges give us a call. If you are considering selling your property in Hawaii, a tax deferred exchange will exempt you from the 5% HARPTA withholding and also the Federal Capital Gains Tax. Planning in advance for the disposition or acquisition of assets is always a wise decision. Another invaluable tool for sellers in doing a tax deferred exchange is having the option of using tenant-in-common (TICs) for qualifying for replacement properties. Many property owners who currently own underperforming assets can sell those assets, taking advantage of tax deferred exchanges, and turn an underperforming asset such as land into an income producing asset. Call me or send me an email if you would like additional information at 808-661-7994 or email Jim@JamesBFoster.com
Most buyers of condominiums use their units for a portion of the year and use a vacation rental management company to manage it for them during the rest of the year when they are off the islands. Understanding how this process works and receiving information from vacation rental management companies prior to purchasing allows buyers to purchase with a lot more confidence than those who are uninformed.
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 use. If when sold the price is below the appraisal value, you’ll have documentation to support your loss. Appraisals for 2007 taxes can usually take place up to April 15, 2008. The astute investor will coordinate these matters with the account or CPA.
To facilitate the tax deferred exchange process for our clients, we have placed our securities licenses with Welton Street Investments, LLC. Welton Street is the leading NASD Member Broker/Dealer formed exclusively to work with commercial real estate professionals offering TIC(Tenant In Common) investments as 1031 exchange options and direct investments. Welton Street works with quality TIC real estate sponsors, providing access to a broad and deep array of institutional quality TIC investment properties providing due diligence, research & securities compliance. Welton Street utilizes three key areas of due diligence before real estate sponsors and TIC investment replacement properties are selected and presented for investor consideration: 1) Audit and Analysis of the Real Estate Sponsor; 2) Analysis of TIC Program Structure & Fees; and 3) Analysis & Underwriting of Replacement Properties.
If you are contemplating selling highly appreciated real estate during 2007 and would like for us to provide an analysis of how to best structure your transaction, please call us at 1-888-661-7994 or send us and email at Jim@JamesBFoster.com
Useful Internet Sites:
www.youmail.com This is a service that will allow you to have a different voice mail greetings for different callers to your cell phone. You can set up one for your boss or clients; one for just your friends and one for those you do not want to talk to. Major newspapers have featured this interesting service that replaces your cellular voice mail with a superior voice mail system that includes features like personalized greetings for each caller, online voice mail access, and complete control over who can leave you a voicemail.
www.pandorarecovery.com In case you accidentally delete files from your recycle bin this is an undelete program that that you can use to recover those deleted files in the blink of an eye. This is a good program to have available right after one of those bad moments when you realize you have deleted an important document or file.
www.summize.com Now you can see how others have reviewed a product you are considering buying with an immediate read with interesting bar graphics. The site uses a new type of search engine that gathers and analyzes user reviews on the web, and then presents the results in easy to visual bar type summaries that run from red (bad) to green (good). You can search here for your product and see how users who reviewed that product rated it and read helpful reviews and a lot of other pertinent information regarding the product or class of products you are interested in.
www.lifelock.com With identity theft rampant this is an important service with modest fees. Lifelock is not like credit monitoring, they are the next generation. They are the lock, and you hold the key. If your Identity is stolen while being a client, Lifelock will go out and hire the right people to work to get your good name back and it won't cost you one red cent. If you lose money they guarantee to re-imburse you all the way up to $1,000,000.
www.carbonite.com Here is a great back-up system for the files on your computer. Carbonite is an online backup service that starts automatically and works quietly and continuously in the background protecting your data. If you accidentally erase something they have the copy. You can restore deleted files with just a few clicks on your PC. If your PC crashes, just visit their website to recover lost files. The service is reasonably priced and invaluable if you lose your data.
www.accucoverage.com/ As we have all observed in the last couple of years hurricane and flood damage have been responsible for billions of dollars of loss. There have been horror stories of consumers having to deal with insurance companies to prove losses. If you have home owners insurance, you have the responsibility of insuring for the correct amount. To be sure that you are covered, you must know the current replacement cost of your home and you can at this web site for only $7.95.
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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