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December, 2006 - Newsletter for the Maui Market
Aloha and Happy Holidays!
Don't forget; we provide a free Automatic E-mail Notification Service where an automatic email notification goes out to specific recipients when ever a new listing becomes available for a particular condominium complex. In each of these notifications includes a link to view the brand new listings 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 us an email at Won@JamesBFoster.com with your first and last name, your email address, and the condo complex you wish to be notified of.
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 428 and seemed to peak at 429 on November 29th and has slowly dropped. Properties are requiring more time to sell and Buyers have a much larger inventory of properties for sale to choose from. The peak season is upon us and we are now seeing an increase in showings with more visitors on island. The properties for sale during the holidays receive more showings generally as they attract prospective buyers on island for the holidays. This is when vacation rental condominium occupancy jumps for the holidays in November, December and January.
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 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; June, 2006 there were 362 condominiums for sale and the total value was $333,616,070.00; July, 2006 there were 392 condominiums for sale and the total value is $346,937,598.00; August, 2006 there were 393 condominiums for and the total value was $344,119,142.00; September, 2006 there were 413 condominiums for sale and the total value was $369,322,455.00; October, 2006 there were 408 condominiums for sale and the total value is $366,608,574.00; November, 2006 there were 407 condominiums for sale in the West Maui area and the total value was $357,086,324,00; and at the beginning of December, 2006 there are 428 condominiums for sale in the West Maui area and the total value is $361,399,109.00. The condominium for sale inventory since July, 2005 has been as low as 165 and is up to 428 for December 1, 2006. The “for sale” inventory on West Maui continues to increase.
As of December 2006, the total condominium sales for West Maui during the month of August, 2005 were 52 and the total value was $31,852,104.00; for the month of September, 2005 total condominium sales were 58 and the total value was $39,539,021.00; for October, 2005 total condominium sales were 38 and the total value was $23,503,291.00; for November, 2005 total condominium sales were 48 and the total value was $35,051,564.00; for December, 2005 total condominium sales were 47 and the total value was $26,101,467; for January, 2006 total condominium sales were 42 and the total value was $28,574,643.00; for February, 2006 total condominium sales were 48 and the total value was $32,995,078.00; for March, 2006 total condominium sales were 40 and the total value was $32,199,584.00; for April, 2006 total condominium sales were 43 and the total value was $41,898,525.00; for May, 2006 condominium sales were 51 and the total value was $39,644,886.00; for June, 2006 condominium sales were 40 and the total value was $ 32,533,500.00; for July, 2006 total condominium sales were 30 and total value was $26,212,000.00; for August, 2006 total condominium sales were 28 and the total value was $31,885,500.00; for September, 2006 total condominium sales were 30 and the total value was $24,770,000.00; for October, 2006 total condominium sales were 29 and the total value was $23,359,299.00; and for the month of November, 2006 as of 12/1/06 in the MLS data, total condominium sales were 20 and the total value was $11,819,600.00. The total condominium sales for August, 2005 was 52; September, 2005 was 58; October, 2005 was 38; November, 2005 was 48; December, 2005 was 47; January, 2006 was 42; February, 2006 was 48; March, 2006 was 40; April, 2006 was 43; May, 2006 was 51; June, 2006 was 40; July, 2006 was 30; August, 2006 was 28; September, 2006 was 30; October, 2006 was 29 and November, 2006 was 20. Remember, the contract was written 60 to 90 days or more prior to closing so if the high was May, 2006 the contract was likely between January and March.
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 10/31/2006 the average price for a home on Maui was $1,000,595.00 which is up 8% from a year ago for the time period of 1/1/05 to 10/31/05 when the average price was $927,317.00. For the same time period the average price for a Fee Simple condo on Maui was $803,660.00 which is up 50% from a year ago for the same time period when the average price was $536,124.00 according to the RAM statistics.
We have gone in to the MLS database and pulled information for 2000 through 2006. 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 - 700 condominiums sold for a total value of $375,033,467; and in 2005 - 682 condominiums for a total value of $408,582,315.00. To date for 2006 (January thru November) 402 condominiums have sold for a total value of $326,547,615. It appears we will not achieve the number of sales for 2006 as we experienced in 2005 by year’s end, 2006.
Mortgage Rates as of 12/4/06 from Town Island Mortgage, LLC – Hse/Condo: 5.5.0% 30yr fixed 2.0 pts (5.73 APR); 5.75% 30yr fixed 1.0 pt (5.88 APR); 6.125% 30yr fixed No Points (6.19 APR). No Docs: 5.875% 30yr fixed 1.0 Pt (6.00 APR); No MI 90%: 6.00% 30yr fixed 1.0 Pt (6.13 APR); No MI Int Only 95%: 6.375% 7/1yr ARM 1.0 Pt (6.19 APR); $1M: 6.125% 30yr fixed No Points (6.19% APR); No Income, 100%, & Stated Land loans (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 http://www.JamesBFoster.com/condosales.php 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.
Rainy Weather – Today Lahaina and West Maui is experiencing steady rain and the forecast shows continuing rain through December 7, 2006 but the mountains are beautiful and green and the wetness is preferable to some of the severe weather being experienced in many areas on the mainland.
Kaanapali Golf Course – The Kaanapali Golf North Course, part of a two-year, $13 million investment to enhance Kaanapali’s courses and golf facilities should be back in operation in time for Christmas. Santa Claus and his canoe is back at the entrance to the Kaanapali Resort and it’s looking like a Hawaiian Christmas – Mele Kalikimaka
Medical Facilities on Maui – The citizen’s action group, PUSSH, organized a demonstration at the State Building in Wailuku on Monday November 27, 2006. It was an opportunity for Malulani supporters and those protesting the certificate-of-need (CON) process to unite through the demonstration. PUSSH supporters want the CON process modified or abolished. There currently is an effort under way to have the reconsideration of the Malulani CON on Maui rather than Ohau. Representatives of Malulani filed an appeal in October asking for reconsideration of a decision to disapprove Malulani. County Councilwoman Johnson plans to introduce a zoning change that would allow the acute emergency care facility to be built on 14 acres donated to WMIF by Kaanapali Development Corp. next to Lahaina Civic Center. The new web site for PUSSH supporting Malulani is www.maui-PUSSH.org
Trumph Hotel-Condos Bought up In Single Day – The real estate market has not died in Hawaii, just slowed some. Investors spent more than $700 Million for the more than 460 Waikiki suites. Prices ranged from about $400,000 for a 500 square foot studio to more than $9 million for a three bedroom penthouse. About 40% of the buyers were from various Asian areas.
Lower Honoapiilani Road – The lower road will begin resurfacing early 2007. The work for portions of the road are anticipated to take about sixty days and will provide temporary improvements until the permanent improvements fo the Lower Honoapiilani Road Phase IV Project can be completed.
Traffic on the Honoapiilani Highway, DOT and the Lahaina Bypass – The State of Hawaii’s Department of Transportation announced that Hawaiian Dredging has been selected and awarded a $48 million dollar contract submitted bids for Phase 1A, the first of five phases of the bypass project. The winning bid will receive a Design Notice to Proceed from the DOT in late December. A Construction Notice to Proceed will be issued no later than April 13, 2007. The selected contractor will then have 750 days from the actual Notice to Proceed to complete Phase 1A of the Lahaina Bypass project. DOT has identified all parcels of land and right-of-ways to be purchased for this initial phase of construction. Owners of these parcels have been contacted, and certain legal agreements have already been reached, allowing DOT to proceed even before actual land purchases are made.
Initial OK given by Maui County Council to Road Impact Fees – You wonder what took them so long. Builders would be required to pay $8,442 per West Maui home and $4,625 per South Maui home under proposed traffic impact fees that advanced in the Maui County Council recently. This is for road improvements to handle additional traffic caused by development.
Real Estate & Financial Planning Tips
Year End Tax Planning - Still time to sell if you price it right and one or two transaction could result in saving thousand of tax dollars this year and future year.
- Buy Your Principal Residence Before Year End - Buy a house or condo for your principal residence, the current "buyer's market" where sellers are anxious to negotiate. The mortgage interest you pay the lender in 2006 is also tax-deductible on your 2006 income tax returns.
- Deduct Theft Or Uninsured Casualty Loss – If the loss is personal and exceeds $100 and over you could deduct up to 10% of your 2006 adjusted gross income.
- Delay Taxable Property Sales until 2007 - The capital gain tax on your 2007 profitable sale won't be due until April 15, 2008. This same principle also applies to other types of property sales.
- If You Changed Your Residence Due To A Job Location Change Deduct Your Moving Costs - If you changed both your job site and your personal residence in 2006, you may be able to deduct your moving expenses.
Prepay Your January 2007 Mortgage Payment in 2006 – Make sure the payment is before December 29, 2006 so your mortgage lender will include it on your IRS 1098 and it will be an itemized deduction for 2006.
Prepay Your 2007 Property Tax in 2006 – If you need additional deductions for your 2006 return, check with the Assessor’s Office and if allowed take the deduction by prepaying.
- Refinance Your Home Mortgage and Deduct Loan Fees Not Previously Deducted - If previously refinanced home loan for which you paid a loan fee -- and are amortizing the interest over the life of the mortgage – consider a refinance to pay off an adjustable-rate mortgage and take tax-free cash from your home equity for home renovation or other purposes. In the year of paying off a mortgage with loan fees which have not been deducted, the fees become fully tax-deductible as itemized interest. To avoid this issue consider “no-cost mortgage”.
- Sell Your Principal Residence Before New Year’s Day – If you owned and occupied it at least 24 of the last 60 months before its sale, you can claim up to $250,000 tax-free capital gains (up to $500,000 for a qualified married couple filing a joint tax return). This can be used every two years or 24 months.
Utilize A Home Equity Credit Line To Create Tax Deductible Interest – If the funds are used for personal reasons you can deduct up to $100,000 which is tax-deductible and for use in your business there is no limit.
- Tax Deferred Exchange IRC Section 1031 Of Business or Investment Property – This will allow you to defer capital gains tax if you were concerned about a substantial capital gains tax. In Hawaii, where non-residents have to deal with HARPTA (State Capital Gains Tax) and the Federal Capital Gains Tax, an IRC Section 1031, Tax Deferred Exchange will allow you to retain the 22.25% tax on your taxable gain. Send us an email to Jim@JamesBFoster.com and we will help you with the process or call me on the toll free number 1-888-661-7994.
Private Annuity Trusts - On October 18, 2006, the U.S. Treasury Department released proposed regulations (REG- 141901-05) for Private Annuities which reverse both the Treasury and the IRS position on Private Annuities. The proposed regulations disallow deferral of capital gains taxes via a Private Annuity from this point forward if, and/or until, new regulations are created (final regulations set for Feb 16, 2007). An alternative being utilized in lieu of the Private Annuity Trusts are Insured Structured Installment Sale. This program will provide a legitimate solution for those that have highly appreciated assets and desire to sell these assets and not endure the taxable event all at one time. This will allow a scheduled series of installment payments to the participant (much like the Private Annuity had) to be made (monthly, quarterly, annually, etc.) where taxes will only be due on the proportionate part of the funds received. Insured Installment Sales are based on tax deferred structured annuities. Also the installment sale and tax deferred sales using Tenant In Common Interest to replace the property are also alternatives.
Increased Inventory and Fewer Buyers – With more property on the market and fewer buyers Sellers need to make sure the property is priced right, the property shows well in comparison to the competition and know the recent comparable sales. When it was a Seller’s Market the Sellers did not have to negotiate much and that has changed and the Seller has to keep an open mind and if possible remain unemotional during the negotiating process. Buyers are more likely to make multiple offers and the Seller that is willing to negotiate has a higher probability of selling.
Useful Internet Sites:
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http://www.heidi.ie/eraser/ Here’s a good utility to have on hand when you really want to get rid of a file containing sensitive information that identity thieves thrive on. Use this utility when you get a new computer to completely remove sensitive data from your hard drive by overwriting it several times with carefully selected patterns.
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.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.giveanything.com Last minute Christmas Shopping? Try this 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.
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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