Housing market has
plenty of legs, agent says
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Actually, I was a restaurant manager. Years ago, I managed Kincaid's over there in Ward Warehouse. I worked over here at the Four Seasons Hotel on Maui as a bartender while I was getting my real estate license.
What's your prediction for how high the median price could go?
You know there seems to be two trains of thought. I wish I had a crystal ball but nobody does: I say that probably 20 times a day. No. 1, most of our buyers are from the California market. Their markets are still stronger than ours, but it's not overblown to buyers from those areas. We haven't caught up with that.
The second train of thought is it is not going to slow down as long as the baby boomers come into money. We're coming into the biggest amount of wealth handed down from parents who are passing on to their children in the history of the United States.
Those parents were ones who went through the Depression so they've scrimped and saved. Our generation likes to have the beach house and ski house. We want it all. It dips here and there but we're not going to see it turn away for quite awhile. The year that keeps popping in conversations is 2008.
The median Maui resale price in July was $567,000, up from $406,500. Yet, is there a difference between what is happening in the local homeowner market vs. the resort/investor market?
There's definitely two markets there. We definitely have local people that have lived here and they are buying residential condos, not vacation rental condos. That market is in the $250,000 range. The vacation rental markets starts in the $300,000, $350,000 range.
So how are prices for local buyers?
I think it's just becoming out of reach for someone on a residential condo. It's just starting to get out of reach. If you add up the payments, maintenance fee, you're looking at $1,700 a month.
If interest rates rise to, say, 7 percent to 8 percent, what will happen to the number of average residents able to afford homes? What will happen to sales?
The market is so complex right now you have to look at condos by complex. The same with residential: You have to take it by neighborhood.
For example, we're seeing price reductions in a lot of properties over a million. At the South Point residential condominium, inventory has come up recently. Buyers are having more choices.
Still, what will happen in the overall market?
Depending on their means, we're going to see renters. We call them professional renters, people that never buy, even to their 40s, 50s, they will just continue to rent, because it doesn't behoove them to buy anything. They don't want to get another job, why rock the boat like that? I know several people like that. They say, "I'm going to wait for the market to get better," and I say, "How long are you going to wait there, bud?"
What can be done for people, including moderate-income families, who won't be able to afford homes?
That's a dicey area. I'd hate to speculate on that. Hawaii was in such a down slump for some time, I don't think anyone wants to put the kibosh on something good coming our way.
Is the shortage of housing inventory directly related to development constraints?
Absolutely. Especially on Maui County, commercial property as well as residential. We have a water meter issue. So that's really put the brakes on plans for development, which makes inventory jump because no one can get anything new anytime soon.
There's no easy solution there because you've got all these different interests involved. People in affordable housing and developers developing properties for millionaires, and middle-of-the-road people. One of the solutions is any development has to include affordable housing.
However, there are things that affect us, like a dock strike. I think you have to keep that in mind.