Median Priced Home Sets Record for US

The Mortgage-Pro · Site Admin Joined: 19 Jan 2005 Posts: 2248

KAHULUI – The median price of a single-family house on Maui reached a record $612,000 in January, according to figures from the Realtors Association of Maui.

“It is startling, isn’t it?” says John Stephens of Equity One Real Estate, the group’s president.

And while signs are that prices are going to continue to rise, Stephens says they might not have broken the monthly record except for a few whopper sales in Wailea in January.

More than a few, actually – there were six resales in Wailea in January for a total of $18 million. That was three times the number of houses and more than five times as much money as changed hands the previous month.

The median price in Wailea-Makena in January was $1.6 million, actually down a tad from December.

The lowest median price for an area of Maui last month was $456,000 in Central Maui. (There were no sales in the small districts of Hana, Molokai or Kahakuloa.)

There were 31 sales in Central Maui, with a transaction total of almost $15 million.

The countywide number of sales was lower than last month, as it has been for several months, though Stephens says, “It’s too early to say that’s a trend.”

One thing holding down numbers of sales is lack of offerings. The scarcity of either new houses or offers of older houses after several years of red-hot sales has helped contribute to accelerating prices.

“There’s a shortage of housing in all sectors,” says Stephens, “not just affordable housing. And that’s going to get worse before it gets better.”

That’s what a Wailuku family has learned the hard way.

Donna Davis, whose family now is renting an art-deco-styled home in Wailuku, said she and her husband, Ron, sold their previous home while the prices were rising, and now find themselves priced out of the market.

“We sold when the market was just climbing and climbing,” Davis said. “We couldn’t afford to buy a new house when we wanted to get back in. But we have two daughters who will be starting college soon, so we may not need a big house in a few years.”

Davis said she believes the market moves in cycles and she is hopeful she and her husband, a Maui County firefighter, will someday be able once again to own their own home on the island.

Meanwhile, they are renting a very interesting house that sticks out in their neighborhood like, well, art deco in the heart of old Wailuku.

“It’s a fun place,” Davis said. “People drive by slow and they stop and point.”

Davis said her family has put some of the energy they may have invested into their own home into their unique rental, taking it over from an older couple who moved into a nursing home.

“Nothing’s changed inside, it’s still just the way it was,” Davis said. “They painted it and then we have kind of done a lot of work around the house. The yard was a jungle when we moved in.

“I like living here. I love the neighborhood. Most of the neighbors are the original owners.”

But if some families are able to find a rental they can maintain, many families are squeezing into shared houses while the prices of houses continue to soar. How long can Maui real estate maintain this pace?

Stephens says there are reasons to think it can go on for some time.

The National Association of Realtors economic forecast, taking account of demographic and other factors, is for a continuing strong real estate market.

Locally, Paul Brewbaker, chief economist at the Bank of Hawaii, visited the Maui board a month ago and told them, Stephens says, that the strong statewide market should sustain itself into the next year.

There is some question, Stephens says, whether Maui is leveling off, but the national association says that even with the high prices sellers are getting, many buyers are enjoying mortgages that amount to a lower percentage of debt to income than their predecessors took on in the early 1980s.

That was a time of record-high interest rates, and today’s rates continue to stay well under 6 percent.

Also, says Stephens, many buyers are able to make large down payments with money they got by selling their old homes.

In January 2004, the median price of a Maui resale single-family home was $520,000, and for the whole year it was only a little higher, $525,000, although prices spurted late in the year.

In December, the median was $595,500, also a record.

Maui prices lead the state, although Oahu broke the $500,000 median-price barrier in January.

The scene with condominiums is the same. The median in January here was a record $415,000, up from $355,000 in December and far ahead of the $275,000 median in January 2004.

Staff Writer Matthew Thayer contributed to this story.