If you’ve ever thought about buying a home on Maui — whether it’s a condo or a multi-million dollar beachfront property like the one Peter Thiel, PayPal co-founder, purchased last year — don’t ask me for advice.
James and I bought at the height of the market 😉
Instead, ask Josh Jerman, local real estate expert and author of the “Ask Josh” column in the Maui Weekly. (Josh is also James’s golf buddy and a sponsor of the new edition of Top Maui Restaurants.) Since so many of our readers tell us they’re moving to Maui one day, I thought I’d find out whether Josh thinks this is a good time to do it.
[Not only is Josh one of Maui’s top producers last year – he’s also one of the nicest people I know.]
It turns out, now’s a pretty good time to buy a place on Maui. Here’s how our conversation went.
Molly: Maui’s been hit hard by the recession, and I know there has been a surplus of distressed properties. Is the slump going to continue in 2012, or do you think it’s turning around?
Josh: Maui’s real estate market has been in a slump. Some properties are actually priced below 2003 prices. But it’s already on the rebound, and will continue to improve over the coming year. 2012 is a very good time to buy a place on Maui.
M: Why do you think the market’s going up? What do you see that I don’t from where I sit as a homeowner?
J: The ultra luxury properties have already started to rebound, in 2011, and those properties (worth $5 million and up) are indicators of the overall market. Last year was a banner year, with landmark sales on both Maui’s South and North Shores. For example, in July, 2011, PayPal co-founder Peter Thiel purchased a 1.7-acre property in Makena for $27 million … the largest amount ever paid for a single-family home in Maui County. The seller purchased the home in 2006 for $19.2 million — a significant increase within a five-year period. And, on Maui’s North Shore, the previous highest sale was an oceanfront single-family home in Kuau, which sold for $5.8 million. And just last quarter, a Spreckelsville home closed at $9.6 million. The momentum generated from these, and other, stellar sales will continue thru 2012, with the spotlight particularly on Wailea and Makena.
M: Is that why developers are starting to poke their heads above the sand? There’s been talk about new shopping areas in South Maui…
J: Yes, there are lots of rumblings, and when developers start new projects, it’s a sign of renewed confidence, a good sign for the market in general.
M: So developers are confident.
J: Yes, but not just developers. Overall, inventory has been diminishing in Maui County. The market is becoming more competitive as distressed properties (foreclosures, short sales, and bank-owned properties) are scooped up by astute buyers. (Canadians and other international buyers have been very active.) These properties are in high demand, and the demand will get higher as the inventory goes down. We already saw that in 2011, when residential units sold increased by 10% and average sales prices increased by 5% over 2010. I expect this upswing to continue in 2012.
M: So we have probably “hit bottom” and are on the upswing? The deals are still there, but disappearing?
J: This year is the ideal time to invest in Maui real estate, it’s not the time to shy away. Interest rates are at historical lows. Many properties are below 2003 prices. In some cases, you can now pay less per month for a mortgage than you would for rent. And, the local economy is rebounding. I really think this is the year to invest in Maui.
So there you have it. Now’s the time, people! To learn more, you can always contact Josh through his website, www.JoshJerman.com.