Posted on: Thursday, April 22, 2004

Maui home prices rising rapidly

Associated Press

WAILUKU — The median price of a single-family home in Maui County has soared past the half-million dollar mark, more than double the median price five years ago.

The new median price of a single-family home, based on 288 sales through March 31 of this year, is $513,500, up from $401,586 a year ago, according to statistics from Realtors Association of Maui.

In 1999, the median price — the point where half of all sales are for more, half for less — was $250,000. With many homes in the millions, the average price is $684,020.

Fred Haywood of RE/MAX Maui real estate, said prices are rising so quickly that sellers are starting to hope that buyers fall out of escrow.

"We've had things sell for more when they fall out," he said. The cheapest house he's sold this year went for $360,000, "and a month later it's up another $50,000."

Typical deals are "in the 600s," Haywood said, while the most expensive home he brokered this year sold for $3.2 million.

"Buyers have to be very, very careful what they're getting," Haywood said.

With only ultra-expensive homes available, many first-time buyers are being frozen out.

"I miss very much selling to people about to purchase a home for the first time and seeing the look in their eyes," said Moana Andersen, principal broker at Equity One Real Estate.

Condominium prices on Maui are advancing nearly as fast as for houses, with the average price this year topping $437,288, up from $384,325 a year ago. The median price for a condo is $292,000, also up from $239,575 a year ago.

The highest-price community in Maui County so far this year is Kapalua, where the median reached $1.9 million, based on two sales. The lowest is $207,000 on Lana'i, also based on only two sales. The median price for a house on Moloka'i is currently $843,500, but that also is based on just two sales.

Central Maui's median price, based on 68 sales, is $377,500, up from $320,000 a year ago, while the average price there is $395,853, up from $316,593 a year ago.

Andersen, past president of the Maui Board of Realtors, characterizes the current Maui real estate boom as a bubble, though one not yet ready to burst.

"It's been horrible for some time" from the point of view of buyers, she said.

The county median income is around $60,000 a year, and Housing and Urban Development affordability guidelines include only people making up to 160 percent of the median — a bit over $90,000.

Low interest rates have helped some buyers to stay in the market by increasing the amount they can borrow.

At current available mortgage rates, a family with income of $90,000 could likely qualify for a mortgage of close to $400,000.