Maui Real Estate

In today’s tough economic times, it’s not easy to be a top producer, particularly in the real estate industry. This is true for all regions of the country, including Hawaii. Buyers are being more cautious and careful with their money, not wanting to overpay for properties and not wanting to make a wrong move. Moreover, there are fewer residential buyers currently looking for property in Hawaii while there are still more than 18,000 working real estate professionals in the state. However, despite all of the current difficulties, the top agents in Hawaii are managing to stay busy and are continuing to further the success of their real estate businesses.

According to Shara Enay’s article Being the Best in the Worst of Times: 5 Tips from Hawaii’s Top Realtors, there are five main skills and strategies that Hawaii’s most successful real estate agents all possess and utilize every day. The first invaluable skill that is shared by all of Hawaii’s top 100 realtors is the ability to play well and interact well with others, including clients and other real estate professionals. As Hawaii’s top-ranked realtor, Patricia Choi, is well aware, it’s important to be a good listener and to never bad-mouth fellow agents. By being enjoyable to work with, real estate agents build a solid reputation among both clients and other professionals, a reputation that will ultimately speak for itself.

Secondly, all of Hawaii’s best realtors understand that building strong relationships is absolutely invaluable. A significant percentage of most realtors’ business comes from repeat clients and referrals. This means that solid relationships can be a major source of a realtor’s revenue. Of course, top real estate agents like Hawaii’s number four ranked Sachiyo Braden understand that building and nurturing such relationships can take time, but it’s definitely worth the effort in the long run. For Braden, who deals primarily with clients from Japan, honesty, compassion and ensuring that all of her clients’ needs are met have been absolutely essential to establishing the relationships that have made her business so successful.

As Shara Enay notes in her article, Hawaii’s highest ranked realtors also put in the time and effort to build their brand. Establishing a successful real estate business takes hours of tedious work and exceptional organization. This means that persistence, solid communication skills and attention to detail are all essential. Of course, these same skills and attributes are also helpful with regards to the next important asset for top realtors, which is market knowledge. Ken Smith, who is the number three ranked realtor in Maui and the fifteenth ranked realtor in all of Hawaii, understands just how important it is for an agent to know their particular market. For Smith, knowing all the details about the Maui real estate market has allowed him to make the most of every listing and to provide his clients with the very best service possible.

Last but not least, all of Hawaii’s real estate power producers have aggressively marketed to their particular niche. Oahu-based Tracy Allen, who is Hawaii’s fifth-ranked agent by sales volume, knows that it’s extremely important to take the time to carefully prepare listings and to present them in the way that will be best received in the particular target market. Choosing the right media for advertisements and making the right impression through presentation are both absolutely crucial.

While the above skills and strategies are always important for realtors in Hawaii and all other parts of the country, they are even more important during the current slow economic times. By using their knowledge and abilities to the fullest and by dedicating extra time and effort to their clients and listings, Hawaii’s top 100 realtors have persevered through a slow real estate market and a bad economic situation to come out on top and to be the very best in difficult times.

Posted in Maui Real Estate, Hawaii Real Estate | 1 Comment »

With the economic troubles that have plagued the nation lately, people are being more frugal and spending less. This means that many families and individuals are cutting back on luxuries and extras such as vacations. For a tourism hub like Hawaii, that’s definitely not good news. While economists have previously predicted a downturn for Hawaii’s visitor industry, the University of Hawaii Economic Research Organization now estimates that it will take a number of years before visitor numbers return to their past high levels.

This forecast has resulted from a combination of a loss of interisland cruise ships as well as significantly reduced consumer spending across the country. While the impact of this downturn is expected to result in only a modest decline of total jobs on Oahu, areas such as Maui County which are more dependent on the tourism industry will likely experience a greater negative effect. For instance, economists are expecting a 6 per cent decrease in jobs in the service and lodging industries in both Maui County and Kauai County. The Maui construction industry is also expected to be one of the most negatively affected sectors. Overall, Maui County is expected to experience total job losses of 4.4 per cent.

Of course, there are other factors which could influence the above economical predictions. Most notably, the impact that the swine flu will have on Hawaii’s tourism industry remains uncertain. Past experience with the SARS virus has shown that an epidemic in Asia can have a significant effect on Hawaii. However, economists say that it is still too early to determine exactly what impact the swine flu will have on Hawaiian tourism and economics.

Despite all of the bad news, however, there is still reason for hope. Certain sectors of the Hawaiian economy, such as health care and social assistance, are still expanding. Also, while it’s believed that visitor numbers will take several years to fully recover, the downturn is expected to stabilize before the end of the year. This means that it may not be too long before we start to see the situation beginning to move back in the right direction.

Posted in Hawaii Real Estate, Hawaii Tourism | 2 Comments »

In the last real estate cycle, it was the high priced properties that led the way. In our current market environment, we agree with Mary Ellen Podmoliks’ conclusions that are well articulated in her article, “Distressed Properties and First-Time Home Buyers - The Recipe for Real Estate Recovery?”

Yes, it will be the first time home buyers and investors buying up foreclosures and other distressed properties that will ignite the spark leading to a recovery. We can’t predict exactly when that will happen on Maui, but it does appear to have begun in many areas around the country, so we shouldn’t be too far behind. Why?

Well, for starters, there are many more distressed properties in the low and middle end of the market, and these properties have dropped disproportionately more than properties in the high end. Over the next 12 months, we expect a convergence between all segments of the market, i.e. the low and middle end of the market will drop less while higher priced properties will probably experience even steeper declines until they eventually catch up with each other.

Add to this the tax credit incentive for first time home buyers, and historically low interest rates, and you have a recipe for recovery.

This, of course, does not mean that you can’t find great deals in the high end luxury market segment. On the contrary, there is often more room to negotiate for properties in the $1 million plus range. Our featured property this week is evidence of that with an over 50% drop from its original list price.

Let us know if you would you like a list of pre-foreclosures, short sales, and REO’s (Bank Owned Properties).

Have a wonderful week.

Mahalo Nui Loa,

The Smith Team

Note: The above was the introduction from our most recent Newsletter. Please sign up by going to our Website.

Posted in Hawaii Real Estate | 1 Comment »

Not surprisingly, the majority of real estate figures throughout the Maui area are down in the first quarter of 2009. However, some investors are keen to point out that some areas actually showed higher sales figures suggesting that hope is on the horizon. The last two months for Maui real estate have been the worst in the last two years but with some pockets of increased sales figures might indicate that the downturn has reached its lowest point and figures will start improving.

Trends are a bit early to read and many cautious real estate experts are advising that at least 3 or 4 months of real estate sales data needs to be collected before any definitive statements can be made. As far as overall sales numbers are concerned, the first quarter of 2009 showed a marked decline. Declining statistics were also seen in average and median sales prices and dollars generated. Minor improvements on these first quarter trends may or may not be merely an anomaly.

The following are more specific statistics:

• Compared to the first quarter of 2008, 50 percent fewer single-family homes were sold. This represents a drop from 228 sales in 2008 to 113 sales in 2009.
• Single-family home sales averages also dropped from about $910,000 to $805,000 which is an 11% dip.
• Median single-family home sales prices also dropped 11% from around $603,000 to $538,000.
• Finally, the total dollars generated on single-family homes came down a staggering 56% from $207.5 million in 2008 to $91 million in 2009
• Comparatively, figures for condominium sales faced similar drops.
• The total number of condos sold fell sharply. In 2008, 276 sales were finalized in the first quarter but only 148 this year.
• Average condo prices took a larger dip than housing prices going from $940,000 in 2008 to around $721,000 this year. This represents a 23% decline.
• Similarly, median sales prices tumbled 22% from $587,000 to $456,000.
• And finally, the total dollars generated through condo sales fell nearly 60% from about $260 million to $106 million.

Still, there appears to be a glimmer of hope. Some regional figures fared much better than the averages throughout Maui suggesting that things may be looking up in the near future. Central Maui, for example, was the most active region for sales of single-family dwellings. In this location, average housing prices actually increased a modest 5% despite a drop in the number of transactions. While 103 first quarter single-family house sales were tallied in 2008, only 47 were completed in 2009. Another example of modest increases in average housing prices is Kihei. Sales activity did drop 13%, from 36 sales last year to 23 for the first quarter this year; average sales prices actually increased an impressive 9%. This means the average single-family home increased from nearly $650,000 to over $700,000.

Resort areas like Lahaina and Wailea-Makena also had improved figures with regard to median price of single-family homes. In Lahaina, median sales prices raised a very impressive 57% and average sales prices went up around 20%. Similarly, Wailea-Makena benefitted from a 26% rise in both median and average sales prices.

As far as condo owners are concerned, positive growth for condo sales was much less likely. Still, in Kaanapali condo prices were 27% higher this year than last and median prices were up 22%. In fact, the sales of Kaanapali condos also showed positive growth compared to a year ago with 37 condos sold in the first quarter this year compared to 12 last year.
Nonetheless, now is the perfect time to buy! Housing and condo prices are at the lowest point they’ve been in years and it’s not likely that prices will drop much more. The market is tightening up and there are fewer available properties as home owners are reluctant to sell in the current market.

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A ruling by the U.S. Supreme Court gave both sides of the ceded lands dispute some good news. On Tuesday, March 31st the Supreme Court ruled the congressional resolution that apologized for the ousting of the Hawaiian monarch in 1863 did not strip the state of property rights with regard to 1.2 million acres of former crown lands. The unanimous ruling overturned the Hawaii Supreme Court’s previous ruling that used the 1993 Congressional Apology Resolution to prevent the sale of land passed on to Hawaii when it joined the Union and became the 50th state.

This new ruling by the U.S. Supreme Court prevents the OHA from relying on the 1993 Resolution in further court proceedings. Since a resolution is not a law, it comes as little surprise that the U.S. Supreme Court overturned the previous ruling by the Hawaiian Supreme Court. The success of the OHA in selling land should not be dependent on the 1993 Apology Resolution as there are a number of state laws, resolutions, and legal precedents that lend support to its position. Moreover, before the final decision is made by the Supreme Court, ceded land parcels can still be sold off by the state, although this is unlikely. Ceded land sales and transfers would be inadvisable politically as the current state’s Republican government hopes to replace Gov. Linda Lingle with Lt. Gov. James Aiona.

Nonetheless, current state Attorney General Mark Bennett, who lead the appeal of the Hawaiian Supreme Court’s 2008 decision, feels that the U.S. Supreme Court has given the state control over ceded lands. Because the U.S. Supreme Court’s decision ultimately mandates that the Apology Resolution has no effect over the rights of the State of Hawaii, the land that was originally in absolute fee by the United States should now be under the control of the state. The U.S. Supreme Court’s decision clearly supports the argument that there is no implication in the Apology Resolution that Hawaii does not have sovereign right to control its own land. The Republican Party has consistently maintained that the state executive branch has total power to sell or transfer ceded lands according to the 1995 State Admissions Act.

In 2008, the Hawaii Supreme Court created an injunction opposing the sale or transfer of ceded land which constitutes more than a fourth of the land on the islands. This equates to several billion dollars worth of real estate. However, the U.S. Supreme Court’s decision changes nothing of the original arguments. Ultimately, they deemed the Hawaii decision as inaccurate and therefore the argument returns to square one. Both sides of the issue will revisit their original arguments, this time ignoring the Apology resolution. Some believe it will still be possible to halt the sale of ceded lands through legislation pending in the Capitol. Therefore, according to the Supreme Court, the State must still decide the fate of this issue.
Clearly, Native Hawaiians look to protect what they feel is their land. Some government representatives feel that there is a financial responsibility to these Native Hawaiians and that ceded lands should not be sold until these people have been fairly compensated. There is even the possibility that ceded lands be relinquished to family land claims as many would argue that the lands were stolen.
Still, both sides of this issue have solid arguments. According to some, the Admission Act recognizes the legality of the sale and transfer of these lands as does state law and the Hawaiian Constitution. In opposition of this position is the Akaka Bill. This bill has been before congress for nearly nine years and supporters feel there is a hope for this bill to be passed due to endorsement of President Barack Obama. The most current version of the Akaka Bill, presented to Congress on February 4th, seeks to create a process by which Native Hawaiians can gain self-governance, recognizes Native Hawaiians as the indigenous people of Hawaii, and strengthens the trust relationship between Native Hawaiians and a governing body within the U.S. government. However, the bill does not call for a suspension on ceded land sales and transfers and this would have to be an amendment to this or another bill. For example, Senate Bill 1677 calls for two-thirds approval from the Legislature with regards to transactions involving ceded lands. This bill provides an excellent opportunity to legislate the transfer, by sale or otherwise, of ceded lands. Essentially, this bill would ensure that Hawaii, its citizens and government, have final say over transactions involving these lands. Future legislation could also be developed to ensure the protection of ceded lands.

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The Smith Team proudly announces the addition of our latest member. Waiaulia (Graceful Flowing Water) Smith born March 31, 2009 at 8:53 A.M. Mom (Melissa), Dad (Greg), and baby are all doing well. Below are some photos taken at 8 hours after birth.

Baby

Baby Close-Up

Baby With Dad

Grandpa Ken and Waiauli

Mom and Baby

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The current economic crisis has lead to a sharp downturn in home sales figures. Because foreclosures are rising and markets are failing, it is a very competitive time to sell your home. Still, selling your Maui home can be a very exciting time in your life as it is obviously associated with new beginnings. As such, you want to improve your odds for selling your home as much as possible and to do this you must make a good first impression on your real estate agent as well as potential buyers. The following are some tips that will allow you to make that good impression and not only help you sell your home quickly but will also increase its market value.

1. De-clutter

Clutter in the rooms of your home make the rooms seem smaller and distract potential buyers. In addition, clutter in your yard is unattractive and will discourage home buyers.

2. Simple decoration is best

Wherever possible, it’s best to keep your décor simple. Basic furniture with matching accents allows home owners to visualize their own furniture and personal style.

3. First impressions last

The first time potential buyers visit your home they will likely have made a decision already. Keep the lawn well manicured and trim hedges and shrubs. During the winter, shovel your driveway and walking paths so they are clear of snow and ice.

4. Pay attention to details

Because you’ve lived in your home for a while, you may not notice the small problems that buyers are looking for. Be as critical as possible of your own home so that buyers can’t find anything to dislike about your home. Clean the walls, floors, and carpets so your house has a “never-lived-in” feel.

5. Renovations are a great investment

Although it’s not necessary to renovate your home, it can be a great investment that drastically increases the value of your home. Home buyers usually focus special attention on kitchens and bathrooms so even minor renovations can have a huge impact.

6. New paint is refreshing

Painting is inexpensive but can have the biggest impact. Most real estate agents will recommend that you paint with fresh natural tones so that buyers can imagine how they would like to decorate. Bright, tacky colors are distracting.

7. No problem is too minor

Even the smallest issues would be noticed by potential buyers. Fix dripping faucets, faulty fixtures loose cupboards and broken drawers.

8. Tidy up your garage

Again, buyers will be looking at every detail so you should clean out your garage. Garage can be an important selling feature so if you can empty out unnecessary junk you can give the appearance of more room.

9. Consider the ambiance

Ultimately, you want your house to feel as much like a home as possible. Make sure your home is inviting so that potential buyers feel comfortable immediately. Light scented candles to create an appealing smell and always ensure that your home is as well lit as possible.

10. Cleanliness is key

You should thoroughly clean your home, especially kitchens and bathrooms. If your house sparkles, buyers will be impressed. Buyers are likely to be critical about cleanliness and it’s an easy problem to avoid.

11. Check your appliances

Obviously, appliances are usually sold with the house and buyers might be disappointed if they’re not in good working order. Consider hiring a repairman if your refrigerator, dishwasher or other appliances are not working.

12. Get into the nooks and crannies

We might not always dust our windowsills or organize our crawlspace but taking the extra time to make sure every aspect of your house is beyond reproach will go a long way to selling your home and increasing its value.

13. It’s not all about the inside

A dirty, cluttered yard with unkempt lawn and shrubbery can be a major turn off. Tend to your yard and consider your outdoor décor. If necessary, consider painting the exterior of your home or at least the trim.

14. Make them feel at home

Small details like towels in the bathroom or pleasant music in the background can make your house feel like your buyer’s home. Avoid loud, disturbing music or television sounds so that they are focused on your home and not unnecessary distractions.

15. Space, space, and more space

Creating even the appearance of space sells homes. Store excess furniture and trinkets out of sight so that rooms look bigger. Home buyers want space in every aspect of their new home: big bedrooms, spacious living rooms, and lots of storage. Cleaning out your home can give them the space they’re looking for.

Posted in Hawaii Real Estate | No Comments »

Despite a lengthy and heated debate regarding short-term vacation rentals, a large group of residents were given an overview of the new Maui bed-and-breakfast (B&B) ordinance at the Hannibal Tavares Community Center in Pukalani on March 4th. In recent years, the short-term vacation rental issue has been highly controversial in Maui County for both residents and elected officials.

In 2007, the county started enforcing regulations on transient vacation rentals including B&Bs. Months of contentious debate and discussion followed with residents and elected officials that fell on either side of the issue. However, this January the B&B ordinance was finally signed into law by Mayor Charmaine Tavares thereby clarifying regulations and simplifying the process by which B&B permits were awarded in the county.

Wednesday evening’s meeting was co-sponsored by Maui Vacation Rental Association Board Member Tim Croly and Maui County Planning Director Jeff Hunt. This forum was designed to provide residents with the basic details of the new ordinance as well as an opportunity to discuss the merits of the law and the new permitting regulations. Furthermore, the meeting was open to questions from residents and several “break out” sessions were held in order to allow residents to address their concerns about B&Bs, farm plans, and agricultural special use or conditional permits.

In an attempt to highlight the position of the Maui Vacation Rental Association, Mr. Croly identified the goals of his organization and hoped that homeowners would see their opportunity to participate in and benefit from tourism. As of late, many residents have seen his rental association as somewhat aggressive, but Mr. Croly assured residents in attendance that the Maui Vacation Rental Association is determined to work together with the local government and the public to find common ground and institute laws that benefit the entire community. Moreover, Mr. Croly assured residents that his organization is fully supportive of the new ordinance and the proactive steps taken to develop these new regulations.

Speaking for the Maui County Planning office, Director Jeff Hunt also supported the new ordinance. In addition, he applauded the co-sponsored form as it showed that the community was coming together to resolve the ongoing issues of short-term vacation rentals. Mr. Hunt continued by detailing the criteria of the new B&B ordinance and permitting process and expressed contentment with the new streamlined process.

Maui County’s B&B legislation dates back to 1997 and Mr. Hunt discussed the changes that had been seen in conditional permitting which has been the major point of contention for many residents. The new law covers a number of requirements including a provision that only two detached single-family dwelling units can provide overnight accommodations regardless of the number of legal units on a property. Furthermore, the new law requires that property owners live on-site in order to protect the character of neighborhoods. Other mandates include a maximum of 400 permits and a permitting process that is more straightforward.

Still the streamlined permitting process does appear to have some limitations. Namely, agricultural lands require a special-use permit and must follow both state and county regulations. Also, in an attempt to protect neighbors they have the opportunity to object to these permits. Should 30 percent of neighbors within 500 feet of the property object to the permit or if another B&B exists within these limits, the permit will be denied. Hāna residents will notice further restrictions. B&Bs with more than 3 bedrooms will not be approved.

Mr. Hunt admitted that this process will be frustrating to some applicants. There are mounting applications for permits and those wishing to obtain a permit will be greeted on a first come, first serve basis. His office is facing a huge backlog and the process is expected to take some time. In order to speed up the process, Mr. Hunt highlighted a few details of the permitting process to help potential applicants. First, applicants should post a notice sign on the property five days before submitting the application, letters should be sent to neighbors within 500 feet of the property allowing for a 45 day comment period, house rules should be posted outlining quiet areas and parking regulations, and breakfast must be served.

The permitting process may be tedious and difficult for some applicants but it is important to respect the rights of all Maui residents. Applicants should be careful to review their applications as incomplete applications just bog the system and slow the process for others. The new ordinance is designed to represent fairness and a balanced system for all.

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Compared to a year ago, January foreclosures in Hawaii have nearly tripled. The 174% rise represents 337 foreclosures filed in the first month of 2009, making this the seventh consecutive month with a triple-digit increase in foreclosure rates. The continuing real estate woes make a recovery highly unlikely. There are far too many risky loans and the impacts of unemployment are just beginning to show. While foreclosures in January are down roughly 30% from December, there is no indication that this is anything but an anomaly. Lenders temporarily suspended new foreclosures but experts expect activity to resume by spring.

Currently, the government is attempting to create solutions to the foreclosure problem and as such many lenders have taken a wait-and-see approach but more and more evidence suggests that this is just the beginning of a cycle. Many buyers have taken on more debt than they can handle and as such the number of foreclosure, short sale, and distressed property sales is growing rapidly in Hawaii. Moreover, with home prices dropping as foreclosures rise it has been incredibly difficult for homeowners to avoid losing their homes. Owners are unable to save their homes through equity or quick sale and there are other economic factors coming into play. Overall, the tourism and construction industries in Hawaii are also suffering and this brings business closures as well as layoffs. All these factors combined, foreclosures, falling house prices, weakening industry and subsequent layoffs and closures, support the theory that recovery is not in the near future.

Still, there is a glimmer of hope in the sense that Hawaii is faring better than the rest of the nation. While the national average for foreclosure rates exceeds 2 per cent, the same rate in Hawaii is less than 1 per cent. In fact, Hawaii ranks 30th nationwide with respect to foreclosure rates. In addition, there is a great amount of variation in foreclosure rates from neighborhood to neighborhood. While most neighborhoods are affected by foreclosures, Honolulu, Ewa Beach, Kailua Kona, Kihei, Waianae, Kapolei, Kahului, Hilo, Lahaina, Wailuku, Waipahu and Waikoloa have seen the most activity.

Posted in Maui Real Estate, Hawaii Real Estate | No Comments »

With regards to housing and the Obama Stimulas Package, here’s a great letter from the 2009 National Association of Realtors President, Charles McMillian:

Dear Fellow REALTOR®,

Here’s our take on the Stimulis Bill and Treasury announcements made this week. We look at the Stimulis package AND the Treasury’s package holistically, in compliment with each other - mostly because that’s how the Obama team is looking at it. Your representatives, the NAR Board of Directors, asked us in November to do 4 things (with an unspoken but clearly understood mandate to PRESERVE what we already have). Here they are: 1) get loan limits raised for high cost areas, 2) make the $7,500 tax credit NOT a loan, 3) try to find ways to push interest rates down (which are higher than they should be due to systemic risk right now) by 200 basis points, and 4) help provide solutions to the foreclosure/short sale problem.

So here’s what we have achieved: 1) the loan limits will be raised to $727,000 in high cost areas, 2) the tax credit will be raised to $8,000 with NO payback [a true credit], 3) interest rates have come down 125-150 basis points, and 4) the bill has over $50 billion in it for foreclosure mitigation, with Geitners Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES’s thereby freeing them up to do the same with new mortgages, and Fannie has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.

In addition, we preserved what we have - which some tend to forget is always on the table when these negotiations start up again - mortgage interest deductability, real estate tax deductability, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects).

We did make a run at the $15,000 credit — and we would have loved to have gotten that or the Homebuilders $22,000 credit idea as well as their 5 year loss carryback deal, but they were considered too rich for this program. What it did do though is totally take the debate off of whether a tax credit should be reinstated at all (it expired last year) and whether it was a true credit or a repayable loan, and kept the conversation on how much it should be. It also kept the debate off of ‘what we are willing to give up to get a $15,000 tax credit’ and kept the debate again, on how much it should be. It’s pretty hard to complain when they give you what you ask for and you lose something you never had.
While we study the Treasury specifics on their major role in providing the rest of the housing solution — there is much more to come and we are working diligently with the Administration to help ‘unclog the pipeline’ and get capital flowing into housing again.

Sincerely,

Charles McMillan, CIPS, GRI
2009 NAR President

Mahalo,

The Smith Team

Gregory P. and Melissa Smith R(B)

Ken and Jeremy Smith R(S)

Coldwell Banker Island Properties

Shops at Wailea

Posted in Maui Real Estate, Hawaii Real Estate | No Comments »

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