The headlines are not the story.
As Paul Harvey used to say, "And now, the rest of the story."
For those of you that don't remember or aren't old enough to do so, Paul Harvey was a radio personality who presented his show as news and commentary. He was professional enough to make sure the listeners knew when he was reading the news and when he was giving his point of view.
Last month, National headlines screamed "Foreclosures are up 115%" which, while true, didn't tell the rest of the story. As the chart below illustrates, 2021 had the lowest number of foreclosures since before the Great Recession. So, the eye-popping 115% increase was the gain over the previous year, 2021, which had the lowest number of foreclosures since at least 2000.
For a bit more context, foreclosures listed for sale on Maui were down 66% from January to February. That huge drop in foreclosure inventory was because we went from 3 for sale down to just 1 for sale.
Earlier this week the Maui News trumpeted "Housing sales continue downward tumble." The sub-headline went on with, "UHERO director: Sales across state falling to levels not seen since the Great Recession." Tying together "downward tumble" and the "Great Recession" would make most readers believe that the value of real estate is tumbling down at a rate similar to that during the Great Recession. As any consumer looking for a home or any Realtor trying to help that consumer can tell you, there isn't much for sale and prices are not falling on what is for sale.
Sales have slowed due to lack of inventory. We are also seeing reductions in asking prices, but selling prices are stable or "stablish" for homes and are up a bit for condos.
Read on for the rest of the story.
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SALES:
In February, home sales and home inventory were both down, but pending sales increased. The 44 home sales in February were 25% lower than the previous month. That is actually 10 fewer homes sold than December of 2008 during the Great Recession. Of course, the median selling price back then, at $567,500 was less than half of today's median price. And instead of having 264 homes for sale, there were 1,103 for buyers to choose from.
Condo sales, at 66, were up for the month, and, up from the 36 that were sold in December of '08. The big difference in that there are plenty of people who want to buy condos today, as demonstrated by the fact that we have only 3 months of inventory. In 2008 we had 1,722 condos for sale on the market or 4 years' worth of condos for sale. And buyers back then were a little nervous about investing in real estate.
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INVENTORY:
Clearly the downward tumbling market of 2008 had nothing to do with inventory. Today's slow sales rate has everything to do with inventory. Although, with home sales off 25% for the month and inventory down only 2.5%, but still down, the number of homes being sold compared to the number available for the month indicated we have 6 months of inventory at the current rate of sales. That is, by most measures, a balanced market.
The rest of that story is that of the 264 homes list for sale, 219, or 83%, are priced at over $1,000,000.
Inventory for condos dropped by about 4% last month. However, the number of sales, pending sales and prices were all up. It doesn't seem like today's buyers are nearly as nervous as they buyers during the Great Recession were.
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SELLING PRICES: average and median sold prices
The month-to-month average selling price for a Maui home has been erratic for the last few months as you can see on the pricing chart. The median price has been much calmer, in fact, almost flat over the last 6 months.
The average and median selling prices also tell a story of the huge mismatch in supply and demand. The median selling price indicates demand for homes selling at the $1,076,000 level. The current median asking price for a home is $2,000,000, and the average asking price is $3,952,000.
The average selling prices for condos have also been up and down over the last 6 months, hitting a low at $888,000 in October, and zipping back up to $1.35M in November, then down for 2 months and back up. What a ride!
The median selling price seemed to be on a downward trend, bur then rose 38% month over month. Tune in next month to see if condo prices stay up or if the pricing tide goes out and prices settle back down a little.
The rest of the story
The rest of the story is not so much the devil is in the details, but even factual headlines can be click-bait. And we'll keep digging into the numbers and trends to try and give you...the rest of the story.
It's always good to end with a sunset.
Get more information and details
To get more information on property and trends, you can search all properties listed for sale at www.AlohaGroupMaui.com. If you can’t find what you’re looking for there, send us an email to lee@alohapotts.com, and we’ll do our best to get an answer for you. As we get more requests for information, we’ll add new sections to the website, newsletter or both.
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About Aloha Group Maui
Aloha Group Maui was founded by L. Lee Potts, MBA, REALTOR® R(B) and Barbara S. Potts, MBA, REALTOR® R(B) and former California CPA. Our team consists of talented professionals; Cheri Miller R(S), Suni Novotny R(S), Keri Nicholson R(S), Myra Plant R(S), Anthony Freda R(S), Courtney Stice, R(S), Kathy Becklin, R(B), Heather Zidell, R(S), Magdalena Odonnell R(S), and Tony Brown R(B). We are businesspeople, and we treat our clients with the same care and service attitude that we would like to receive when we do business. We are in business for pleasure and profit. We expect that most of our clients will enjoy the property they own in Maui (pleasure), and it would be nice for everyone if your property performs well for you (profit). Real estate can be highly speculative, and profits are never guaranteed. So if you are buying property in Maui, it’s a good idea to surround yourself with a professional team.
Lee Potts is the former President of an international software company and former Marketing VP of a publicly traded franchise organization. Lee and Barbara are both licensed under Keller Williams Realty Maui.
Barbara Potts was a CPA with Ernst and Young before joining Apple Computer back when both Steve’s were there (Jobs and Woz). She was also Director of Strategic Marketing for Grass Valley Group, a division of Tektronix, and a business broker in California.
Copyright 2023 L. Lee Potts
Statistical information in this newsletter is based on actual sales information reported to the Realtors Association of Maui, Inc. While this information is deemed reliable, it is not guaranteed. This newsletter is for informational purposes only and not intended as advice for investment or any other purposes. Real estate is considered to be highly volatile, and purchasers and sellers of real estate should always seek expert outside advice before investing.
