Beyond The Reach of Local Buyers

Beyond The Reach of Local Buyers

Local buyers are being priced out of Maui real estate as off-island buyers have more means to afford to purchase homes at the markets current prices.  2016 Half year statistics show that the median single family home price is $630K, up 5% from last year.

Homes below the median price mark are snatched up by local buyers while homes priced above the median mark are purchased by off islanders.  Most local buyers need to qualify for federal loan programs to be able to purchase, they are often left competing with cash buyers.  For the past several months 36% of all purchases have been cash.

We have recently seen an increase in buyers from San Francisco and more of a mix of off island clientele.  The market has not seen the drop off it has seen in past years at this same time due to Canadians returning home.  The Canadian dollar has been weakening for the past couple years.  In turn the Maui real estate market is just carrying on, nothing exceptional.

The problem is that there is no new inventory.  Average local family incomes have not kept up with prices that have risen nearly 2.3 times since 2000 when the median price was $275K.  Just before the Great Recession home prices were out of reach at a median of $679K.  Then following the recession were foreclosures where people lost their homes and those looking to buy could not qualify.  So many of these lower priced foreclosed upon home were bought by investors who then remodeled them and marked up the prices.  Now the market is not able to go back to the lower prices of before the recession.

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