MAUI / MOVING ON UP

Home prices
hit new highs

Demand from mainland and
local buyers continues to be
strong on the Valley Isle

SPECIAL REPORT A 7-Day Series During the 1980s, property values on Oahu and parts of the neighbor islands shot sky high as wealthy speculators from Japan bought up real estate. As the decade closed, the Japanese bubble burst and property prices started to slide. Hawaii residents who bought homes as prices soared were trapped with real estate worth less than they had paid. But many neighborhoods are to making a comeback. This is the final part of a seven-day look at home prices and sales volume in the state of Hawaii.

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By Lyn Danninger
ldanninger@starbulletin.com

As 2001 drew to a close, the median resale price for a single-family home on Maui hit an all-time high at $305,000, up from $276,000 the year before.

So far this year, Maui is still going strong. The prices have risen further, with the median price for a single-family home sitting at $360,000 for Maui as a whole.

Strong economic growth during the past few years explains much of the rise, not just from West Coast arrivals looking to relocate or retire. Local demand for single-family homes is also up.

Having taken note of that trend, developers have been building homes targeted to appeal to a more affluent local buyer rather than the first-time homebuyer.

As such, new home prices rose in 2001, coming more in line with the resale market and rising 5 percent from a year earlier to a median of $288,000. The median price for a new home on Maui also broke records in 2001, increasing around $60,000 from the last record set in 1995.

One example of new housing being built to meet local demand is the Maui Lani, a 1,000-acre planned development complete with a golf course in the Kahului area. When completed, it will contain more than 3,000 homes. The project was launched by developers Bill Mills and Ross Perot Jr.

So far, two increments at Maui Lani, the Greens and the Grand Fairways, have been completed and sold out. Resales are already occurring in both developments, said Janice Texeira, a Realtor with Kahului-based Carol Ball and Associates.

The average re-sale price for single-family homes in the Greens subdivision, now three years old, is running around $360,000, Texeira said.

Three years ago such a property could have been purchased for around $185,000, she said.

Developer Schuler Homes recently purchased part of the Island, a subdivision in the project.

Schuler's Hawaii division president, Mike Jones, anticipates homes will be ready in about eight months. Jones estimates homes will run from the mid-$250,000 range to nearly $300,000.

In addition, Schuler is completing the last phase of a 450-unit Wailuku condominium project called the Iao Parkside. Prices run from above $90,000 to more than $150,000, he said.

A fourth increment of Maui Lani, called the Bluffs, is expected to be about two years away, Texeira said.

Upcountry, a new single-family project called Kula Malu is also poised to break ground. Located on Pukalani Golf Course, there are about 200 lots, Texeira said.

These days, it's difficult to find even a fixer-up single-family home for less than around $250,000, Texeira said. Moreover, the rentals in central Maui and in some other areas of the island are also scarce, Texeira said.

In South Maui, with its mix of longtime residents, retirees and part-time residents, Coldwell Banker Realtor Sandra Albrecht reports a brisk pace in sales, especially the past couple of years. Several developments are under way in Wailea. They are on the high-end of the market by local standards, but low by Wailea resort standards.

There are two single-family home developments, the Wailea Pualani and the Wailea Kai running in the $700,000 to $800,000 range, said Albrecht.

Albrecht said she anticipates price increases this summer as less inventory is available.

"We're selling more than we are listing so it's only a matter of time," she said.

In the Kihei area, known for its many condominiums, sales are brisk with very few oceanfront condominiums left, Albrecht said.

"Asking prices are up, there are multiple offers. I haven't seen a bidding war yet but in some instances, I hear they are getting above asking price," she said.

Albrecht, who also manages rental properties, notes that rental prices in her area have decreased slightly compared to before Sept. 11.

"I have 60 rentals and if I go to re-rent, depending on what it is, I haven't been able to get the same price since pre-Sept. 11," she said.

With more new homes coming on line, Albrecht speculates that may have something to do with the demand.

"I think there has been more buying since Christmas, more people seem to want to get off the mainland so I think that's why sales have picked up," she said.