Maui Real Estate News

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2010-04-08T21:05:00.001-10:00

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Hawaiian Hale on Maui

2010-04-08T20:50:00.002-10:00

I saw this classic Hawaiian Hale (house) being built, and stopped by to take a look. It has a ground floor and a first floor .... I would love to have been one of the early settlers, arriving on Maui to see many Hawaiian Hale !

Makena Resort Auction, 29 April 2010

2010-03-18T08:55:00.004-10:00

Lenders Wells Fargo foreclosed on the Makena Resort some time ago when borrowers, Morgan Stanley Real Estate, and Everett Dowling stopped paying on their $ 193 million mortgage. Wells Fargo has roughly $ 183 million left on the loan, but isn't concerned as they are in first lien position and the Makena Resort is worth more than $ 183 million. The ones in trouble are Morgan Stanley and Everett Dowling, as they invested hundreds of millions of dollars, and sit in second position. This means when / if the Makena Resort is sold at auction (29 April), Wells Fargo will be paid first, and remaining proceeds will go to Morgan Stanley and Everett Dowling. Auction estimates range from $ 350 million to $ 425 million ..... which would result in massive losses for the Morgan Stanley / Dowling partnership.

This story from Chris Hamilton at the Maui News.

WAILUKU - The 1,800-acre property formerly known as Makena Resort and the Maui Prince Hotel will be up for public auction April 29 in the lobby of the Wailuku courthouse.

The auction begins at 11 a.m. at 2125 Main St. and is believed to be the largest foreclosure sale in Maui County history.

The transaction is a fee-simple sale, with no minimum bid required, according to the notice of foreclosure that appeared on Page C8 of Wednesday's Maui News.

Last month, 2nd Circuit Judge Shackley Raffetto appointed Honolulu real estate developer and broker Chris Lau to conduct the sale for what is now called the Makena Beach & Golf Resort. Bidders must register with Lau five days prior to the sale, and the winner must be able to provide a 10 percent down payment April 29.

The South Maui property stretches from Haleakala's slopes, across dryland forests and over lava-rock expanses to beaches. The auction comes

after Maui developer Everett Dowling and Morgan Stanley Real Estate defaulted in August on $192.5 million in loans for the original purchase price of $565 million in 2007 from the Japanese firm, Seibu.

Dowling and Morgan Stanley lost their entire investment in the property, which is said to include millions for development planning, design, publicity, archaeological and engineering surveys, land preparation and permit-acquisition work.

On the other side, the lenders are owed an unspecified amount of accrued interest and fees.

Wells Fargo Bank is acting as trustee for the collection debts owed investors holding the resort's commercial mortgage securities. The bank, which managed to come out of mortgage crisis relatively unscathed, is reportedly in the running itself to buy the Makena Beach & Golf Resort.

The buyer will need to have deep pockets and receive the approval of Raffetto, who's been the property's arbiter, landlord and watchdog for months now.

The auction is for the entire property. That includes 36 holes of golf, 18 of which need to be rehabilitated before reopening, a clubhouse, 2,500 square feet of retail space, 5,200 square feet of meeting rooms, three restaurants and bars, a swimming and wading pool and snack bar, seven outdoor areas for weddings and parties, jacuzzis and a lattice work of hiking and mountain-biking trails.

The real prize, aside from shoreline access points such as Makena Landing, is 1,300 acres of vacant land. That's because Makena Beach & Golf resort also has an assortment of lucrative Maui County residential and commercial entitlements for further development, which County Council members approved at the end of 2008 to spur construction jobs that never materialized.

Dowling, who also has said he would like to regain ownership, had planned to build a luxury-home subdivision and spa, among other amenities, and rebuild the 310-room hotel - before the bottom fell out of the economy.

Without enough cash from pre-sales coming in, he lost the capital required to continue with a project estimated to be worth billions when hundreds of homes, time-share units and condominiums were finished after more than a decade of construction. Many county officials have said they are hopeful that once the economy rebounds, Makena Resort, and all the work and contract dollars it would provide to Mauians, will get back on track.

Prince Resorts Hawaii quit as the resort's management in September, after operating the property since the early 1980s. The court-appointed receiver, Miles Furutani, replaced Prince Resorts with the Mainland company, Benchmark Hospitality International, to oversee the hotel, golf course and land until the resort is acquired by a new owner.

General Manager Kelly Lewis has said Benchmark has substantially improved the resort's financial performance.

In the meantime, the management company also has been able to retain dozens of employees.

Maui Mayor looking to raise .... hell ?

2010-03-16T15:13:00.001-10:00

Well, the Maui County Mayor is looking to raise .... hell ?

This article from Cris Hamilton at the Maui News.

WAILUKU With $53 million less in the county's anticipated fiscal year 2011 budget revenues compared with last year, Mayor Charmaine Tavares on Monday proposed to increase or "adjust" the real property tax rates for several classifications.

While Tavares may have asked for real property tax increases, assessed home and land values have sunk so deeply in the global recession - even on Maui, where home values skyrocketed for years - it is estimated that the county's largest source of revenue will still be down by eight digits.

In order to maintain and improve Maui County's utilities, Tavares also said it will be necessary to make increases to some utility fees for at least a second year in a row.

Her proposed budget would make what she said she considers to be modest increases to wastewater treatment, water service, garbage pickup and vehicle registration fees.

Maui Bus, the county's increasingly popular public transit system, likely will also see some fare hikes, as well as beginning to charge customers fares for routes that previously were free, she said.

Maui County had managed to survive the recession to this point without raising taxes. Over the past two years, elected officials instead have cut department budgets, imposed hiring freezes and reduced spending on overtime and travel.

"As we all know, the slowdown of the economy has had a serious effect on real estate, causing a reduction in assessed values," Tavares said during a news conference Monday where she handed out her budget proposal. "If tax rates remain at the same level as the current year, it would mean a projected revenue decrease of $30 million to the county."

This would lead to a drastic reduction in services, she said. So, Tavares is asking the County Council to adjust tax rates upward to generate $223 million in real property taxes, which still is actually $10 million less than the $233 million raised during fiscal year 2010.

Property taxes make up 41 percent of the county's $563 million current fiscal year 2010 budget. It is Maui County's largest funding source, with the hotel tax, or transient accommodations tax, a distant second with about $17 million generated this year.

Despite Tavares' proposed property tax increases, Maui County will continue to have the lowest property taxes in the state, she said on Monday.

Here's a breakdown of the proposed real property tax rates over the current fiscal year. The amounts are per $1,000 of net taxable assessed valuation:

* Time share: $14; no change.

* Improved residential: $5.80; plus 95 cents.

* Apartment: $5; plus 45 cents.

* Commercial: $6; plus 25 cents.

* Industrial: $6.50; no change.

* Agricultural: $5; plus 50 cents.

* Conservation: $5; plus 25 cents.

* Hotel & Resort: $8.75; plus 55 cents.

* Unimproved residential: $7.25; plus $1.90.

* Homeowner: $2.50; plus 50 cents.

* Commercial Residential: $6.25; new tax category.

The County Council still needs to work out its version of the budget during meetings over the next couple months. The fiscal year 2011 budget goes into effect July 1.

A few council members in recent weeks have suggested reducing the homeowners property tax exemption as a way to deal with the shortfall. But that was not an option proffered by the mayor on Monday.

The mayor and County Council were able to make it through the last budget cycle without touching real property taxes. But with fixed costs on the rise, such as fuel and health insurance, and maintenance always an imperative, utility rates will have to go up, as they have in past years, county officials said.

Tavares said the departments need the money in order to keep equipment operating safely and to stay in good standing with other government agencies that grant water-quality and other permits.

This is what Tavares proposed on Monday:

* The monthly base charge for wastewater service would increase by $1.50.

* Water rates will go up by $1.75 a month.

* Tipping fees at the landfill for solid waste will go from 2 cents to 3 cents per pound, or $3 per ton.

* Vehicle registration fees would go up 1 percent per pound of vehicle weight.

* Nearly all of the Maui Bus routes will remain $1 per trip. But commuter fares will double to $2 for the runs to and from Upcountry and East, South, Central and West Maui.

* The Wailuku-Kahului loop routes will no longer be free and cost $1.

Tavares said that the bus system is a subsidized program that costs $7 million a year to operate. She said it will continue to grow to match ridership, including a $1 million program this year to finally install much-anticipated bus shelters.

However, Maui Bus expenses break down to actually cost $4 per passenger ride, Tavares said.

"I recognize the value of our bus service to the community and believe that we can continue to support keeping bus fares at a portion of what it costs taxpayers to operate," said Tavares, who has said that expanding the Maui Bus system is one of her top achievements during this, her first term as mayor.

97% financing from Homepath ???

2010-03-11T21:22:00.003-10:00

Yes, its true ! Buyers can get upto 97% financing from Homepath (Fannie Mae), with no mortgage insurance, no appraisal, and no condo doc approvals !! Minimum credit score is 660. Why ? How ? you ask ... well this program is only offered on Fannie Mae foreclosures ... and is, of course, funded by Fannie Mae !

Freddie Mac has a very similar program for its foreclosures called Home Step.

Please contact me for a list a Freddie Mac and Fannie Mae foreclosures in your area.

Aloha !

Peter

Maui Land and Pine (ML&P) records a big loss in 2009

2010-03-10T19:10:00.004-10:00

Wow ! Maui Land and Pine (ML&P) is at it again .... losing $123.3 million in 2009 !

This article from Harry Eagar at the Maui News.

" A much-shrunken Maui Land & Pineapple Co. finished 2009 losing $123.3 million, equivalent to $15.33 a share.

The year before, it had lost $79.4 million, or $9.98 a share.

With Maui Pineapple Co. gone and the Community Development segment almost at a standstill, in the fourth quarter the company business was mostly Kapalua resort.

The resort had revenue of $6.8 million, down from $8.5 million in the last quarter of 2008, reflecting the decline in the visitor industry. Its operating loss was $4,672,000, down from $6,621,000 the year before.

For the year, Kapalua had revenue of almost $30 million and losses of $16.1 million. Thus the resort accounted for about three-fifths of the company's total operating revenues in 2009 of $50 million, and about 13 percent of losses.

Pineapple had continued at a low level through the end of the year, and it continued to pile up losses. The loss from discontinued operations of $24.7 million accounted for four-fifths of the $30.3 million in losses in the fourth quarter.

Since then, ML&P has sold much of its Maui Pine assets to Haliimaile Pineapple Co., run by former employees, who are attempting to revive pine cultivation, although with a market to be limited almost entirely to the islands.

Of all the losses during the year, pine made up $11 of the $15.33 per share.

Despite the poor results across all sectors, ML&P stock has been riding up along with the broad market. It reached a 12-month low of $2.05 per share in February and rose to $5.23 Tuesday. The fourth-quarter results were released after the New York Stock Exchange closed.

The results released Tuesday were unaudited interim numbers. The final, audited report, with management commentary, is expected to be submitted to the Securities and Exchange Commission by the end of this month.

The 2009 operating results have been adjusted to remove the discontinued Maui Pine operations. Without pine, ML&P in 2009 was about the same size as ML&P in 2008: $50.4 million in revenue.

As of Tuesday, its market capitalization was about $41 million, about one-seventh of what it was before the wheels came off.

The company said its fourth quarter results include charges of $20.9 million related to the sale and lease of Maui Pine assets, employee severance from the approximately 285 layoffs and cancellation of contracts.

The company's failed joint venture into Kapalua Bay Holdings (the Residences at Kapalua) cost it nearly as much as the failure of pineapple. In 2008-09, ML&P took losses of $92.5 million. The project was completed, after a suspenseful search for new lenders after the failure of Lehman Brothers, and it continues to offer units for sale.

The KBH losses contributed to operating losses of $62.6 million last year (and more than $100 million in two years) for Community Development. With little in the way of new product on hand, and not much demand for either resort commercial or resort residential property, the sector had 2009 sales of only $19.9 million, including sales of undeveloped land.

The resort saw fewer visitors (along with the rest of the island and state), lower revenues due to price cutting, fewer rounds of golf and lower income from retail and villa rental operations. After operating the resort itself since developing it three decades ago, late last year ML&P brought in Outrigger to manage it.

That was among the cost-cutting measures that helped reduce the level of operating losses in the fourth quarter."

Maui is #1 !

2010-03-07T13:15:00.007-10:00

That's right ! Maui is #1 .... at least according to this Barron's article by in the Wall Street Journal.

Maui, and specifically, the resort area of Wailea, is their # 1 pick to own a second home. I couldn't agree more !

Aloha,
Peter

" BARRON'S COVER
| MONDAY, MARCH 8, 2010
10 Best Places for Second Homes

By STEVEN M. SEARS | MORE ARTICLES BY AUTHOR

AT LONG LAST, THE MARKET FOR LUXURY REAL estate is coming back to life.

Prices for primary residences, which plunged at least 20% from the peak in 2007, appear to have bottomed. In some of the snappiest locations, scattered bidding wars are breaking out and prices are turning upward.

In Greenwich, Conn., realty brokers say, the final months of 2009 were almost record-setters for sales volume, as two years of pent-up demand was unleashed. Even the megadeal is back. In Beverly Hills, film producer Jeffrey Katzenberg just plunked down $35 million for an 8,700-square-foot home on six acres.

There's nothing like a stabilized economy and a huge rebound in stocks to send folks looking for the perfect manse. The return of hefty Wall Street bonuses hasn't hurt, either.

With all that in mind, and with summer just around the corner, Barron's sized up the market for upscale second homes, one of the greatest luxuries of all. We scoped out dozens of deluxe enclaves across the country, speaking with brokers, homeowners and others. Our conclusion: Now could be an excellent time to buy.

Prices are way down -- 40% off the peak in some locations. Seemingly at or near bottom, they are starting to attract the first wave of bargain hunters -- and not just families in need of R&R. Hard-nosed investors also are on the prowl, says Jan Reuter, head of residential real estate at U.S. Trust Bank of America Private Wealth Management: "We've seen an uptick in buying in just the last couple of months."

To help you in the hunt, Barron's has selected the 10 best places in America for second homes. These alluring locales have it all: gorgeous houses, spectacular views, world-class golf, fishing and skiing, fine dining and great shopping. You'll find the complete range of lifestyles, from peaceful and easy to vigorously social.

Some warnings: 1) Our selections are every bit as subjective as tastes in homes themselves. 2) The prices cited are based mainly on conversations with locals, because hard data isn't available. 3) Your plush new retreat may take some time to rise in value. Serious appreciation will require a better economy and, quite possibly, another big rally in stocks.

But hey, you could do worse than marking time in paradise.

1. Maui Consistently rated the "Best Island in the World" by travel experts, this Hawaiian beauty underwent a growth spurt during the past decade that some critics bemoaned as excessive. But the southern coast, anchored by the hamlet of Wailea, has weathered it all well. One of the first master-planned resort communities in the nation, it's a balanced blend of understated gated communities, luxury resort hotels, three excellent golf courses, a tennis center and, of course, several crescent sandy beaches. Wailea has 500 single-family homes, and their views are stunning: lush, verdant hills, brilliantly blue ocean and, after the steamy sun showers, rainbows over the horizon.

Median Price: $1.5 million
Drop From Peak: 27%
Neighbor: Oprah Winfrey

2. Kiawah Island, S.C. Languid elegance defines South Carolina's coast, and Kiawah, just off Charleston, may be its ideal expression. The island has one developer, Kiawah Development Partners, and an architectural review board that protects the 4,500 or so properties from the excesses often seen when wealth meets water. It has 10 miles of hard-sand beaches and abundant wildlife: bobcats, gray foxes, loggerhead turtles and more. Its Ocean Course has long been favorite of golfers; it hosted the 2007 Senior PGA Championship. Want to tee up some culture? Charleston is just 45 minutes away.

Median Price: $1.4 million
Drop From Peak: 21%
Neighbor: Dan Marino
[Hamptons] David Dietrich, Corcoran

3. The Hamptons Long the favored retreat of high-powered New Yorkers, the Hamptons are a just now experiencing a fresh jump in home sales, realty brokers say. Credit the revival in Wall Street bonuses. Southampton, bastion of old money, is known for its grand estates, but lovely homes can be found in what not long ago were potato fields. In chic East Hampton, the choicest real estate is on Georgica Pond. Alas, most of the area's finest properties never come to market. Once you own a home in the Hamptons, you own it forever.

Median Price: $1.5 million
Drop from Peak: 30%
Neighbor: Steven Spielberg

4. Park City, Utah Skiers love Park City for its powdery winters, but homeowners relish the summers, too. The crowds thin out, life slows down and the tall aspens lining the nearby Wasatch range shimmer in the breeze. The one-street Old West downtown is dotted with classic Victorian houses, while Deer Valley, an understated year-round resort community, sits on the eastern edge. Its namesake ski hill has been crowned by readers of Ski Magazine as North America's top ski resort for three years running. For $100,000, you can join the nearby Talisker Club, with links designed by PGA Tour Champion Mark O'Meara. Bonus: Salt Lake City International Airport, a Delta Air Lines hub, has direct flights to the East and West Coasts.

Median Price: $1 million
Drop From Peak: 45%
Neighbor: Robert Redford
[Aspen] BJ Adams and Co. Real Estate

5. Aspen, Colo. Aspen isn't just a year-round playground; it's also a cultural oasis, the home to the Aspen Institute think tank, a world-class symphony, and dance and art festivals. The four major ski hills speak for the themselves. The Maroon Creek Club includes a challenging golf course designed by Tom Fazio. The city's West End has a mix of 19th-century Victorians and modern abodes not far from the "beachfront" -- downtown neighborhoods within walking distance of the lift. The posh shopping is so good that some folks never find their way up to the trails.

Median Price: $5.6 million
Drop From Peak: 6%
Neighbor: Jack Nicholson

6. Pebble Beach, Calif. Golfer Jack Nicklaus once said that if he had one last round to play before he died, it would be at Pebble Beach. The site of four U.S. Opens, The Links are rated the No. 1 public course in America by Golf Digest for 2009-10. There are several other public and private golf courses within the guarded gates of the verdant Del Monte Forest, which surrounds the community of Pebble Beach. Stunning estates not far from the first tee offer sweeping views of Monterey Bay. Duffers who buy in can play the Golden Bear's dream course every day.

Median Price: $1.1 million
Drop Since Peak: 20%
Neighbor: Clint Eastwood.

7. Palm Beach This Florida island hovers above reality, and at $30 million-plus, so do its finest pads. Oodles of socialites and tycoons wouldn't have it any other way. Neither would Jimmy Buffett, Rush Limbaugh and too many other boldface names to mention. In addition to the never-ending social whirl, residents like the shopping on Worth Avenue and the beauty of Addison Mizner's Mediterranean-style architecture. Mortals can enjoy the town by buying "over the moat" -- in Jupiter, North Palm Beach, Palm Beach Gardens and Delray Beach.

Median Price: $3.5 million
Drop From Peak: 11%
Neighbor: Henry Kravis
[Sanibel] Sotheby's Intl Realty

8. Captiva/Sanibel Island, Fla. Sitting off the coast of Fort Myers, a nerve center of America's foreclosure crisis, the barrier islands of Captiva and Sanibel are the very picture of laid-back living. Linked by a bridge at Sanibel's northern point, the islands are renowned for their pristine beaches and abundant seashells. Then there are the hiking trails; half the island is a nature preserve. The late Robert Rauschenberg is, even in death, one of the largest landowners. His 35-acre spread, complete with studio, is intact on Captiva's northern end.

Barron's Penta inaugural list of second-home communities from the Hamptons to Hawaii.

Median Price: $3.5 million
Drop From Peak: 40%
Neighbor: Ted Koppel

9. Asheville, N.C. Nestled in the mountains of North Carolina, Asheville offers a four-seasons lifestyle with just enough culture and good restaurants to keep urban-withdrawal pangs at bay. Some homebuyers come from the Northeast, and many come from Florida to beat the heat. The locals call them "halfbacks," since Asheville is halfway up the East Coast. The town has a university and a thriving art scene. We like the 1920s-vintage Tudor homes in the Biltmore Forest district, once part of the adjacent Biltmore Estate. The funky Grove Park neighborhood is also worth a look.

Median Price: $700,000
Drop From Peak: 38%
Neighbor: Andie McDowell
[Gasparilla] Gasparilla Properties

10. Gasparilla Island, Fla. Katherine Hepburn used to rent a beach house here, and it's easy to see why. The small island off Florida's southwest coast has been lovingly preserved: The Gasparilla Act, a state law passed in 1980, put a tight lid on population density, building heights and commercial development. Golf carts -- some customized to resemble '57 Chevys -- are the favored mode of transportation. The historic downtown has gracious homes, and the waters around the island are renowned for tarpon fishing. To check it out, check into the plush Gasparilla Inn.

Median Price: $1.8 million.
Drop From Peak: 18%
Neighbor: Harrison Ford, frequent visitor. "

Developer Discounts on Maui

2009-11-24T08:17:00.004-10:00

Regardless of shape or size, developers who have brought new product to market in the last two years, have had to offer big incentives and further reduce prices to attract buyers. Examples of this can be seen at the Cottages and Villas at Kehalani in Wailuku, developed by Stanford Carr, or Moana Estates, and the Ke Alii Ocean Villa's by Towne Island Home, Ltd in Kihei, or the Cottages at Kulamalu in Pukalani, by DR Horton. Incentives inlcude free furniture packages, large closing cost credits, A/C installation, and if the unit is not quite complete, then upgrades to the finishes.

In some cases, the second or third phase has been suspended, like Houna Kai in Kaanapali, developed by Interwest.

When you add foreclosure and distress sales to this saturated market place, its easy to understand why developers have to offer these incentives lure buyers.

Thank you for reading my blog.

Aloha,
Peter Slate R(S)
Haiku Properties

4 Very important steps to remember when buying a home

2009-11-19T08:58:00.002-10:00

Four of the most important steps to remember when buying a home are:

1) Building inspection - absolutely always get a professional building inspector to examine the structure prior to closing the transaction. Its a good idea to accompany the inspector during the inspection, as you'll learn a lot about your new home !

2) Appraisal - even if you're not using a bank, ie paying cash, an appraisal is a good idea, as it will give you an unbiased third party value of the home.

3) Termite inspection - always have this done, no ifs, ands or buts !

4) Survey - don't leave it to chance that some tree, or wall, or driveway is part of the property. A survey will clarify all of the boundary lines, show any encroachments, and for a little extra, you can have the surveyor draw in the location of the house.

I hope you find all these tips helpful in your real estate acquisition.

Thanks you for reading my blog.

Aloha,
Peter Slate R(S)
Haiku Properties

More deals being done on Maui

2009-11-18T10:07:00.003-10:00

I'm pleased to report that the number of escrows on Maui is on the rise. Over the last year the number of escrows on Maui has been as low as 277, compared with 460 escrows today. The bulk of the escrows (98%) are spread out over single family, vacant land and condominiums. The rest are commercial. Single family homes has the best percentage of escrows with 210 escrows on 1112 listings (20.2%), next are condos with 178 escrows on 1573 listings (11.3%) with vacant land having 42 escrows on 610 listings (6.8%).

While this doesn't indicate a red hot market, it does show there is increasing interest in Maui real estate.

Thank you for reading my blog.

All the best,
Peter Slate R(S)
Haiku Properties

North Shore Maui holding its value

2009-11-11T12:38:00.004-10:00

The North Shore of Maui had a very respectable multi million dollar sale recently. 38 Nonohe Place, a 3990 sqft house on a little over half an acre, sold for $ 2.9 million earlier in November. The same house sold for $ 2.7 million at the top of the market in 2005. While the house had been upgraded since 2005, this sale shows that despite a terrible down turn in the economy, buyers are prepared to shell out for what they really want.

Thanks for reading my blog.

Aloha,
Peter

Senate extends $ 8000 first time home buyer tax credit

2009-11-03T20:27:00.006-10:00

Great news ! The $ 8000 first time home buyer tax credit extension has passed the senate and looks like it will be sent to the president for signatures soon. The proposed extension will extend through 30 April 2010.

Stay tuned !

Papali Wailea .... What a deal !

2009-10-20T08:12:00.005-10:00

Papali Wailea is a very upscale, brand new, single family community located at 3100 Wailea Alanui Drive, Wailea, Maui, Hawaii. Completed in 2008, Papali Wailea is well thought out and exceptionally well built. Only 24 single family homes are built on 10.4 acres to ensure low density. The complex has four, evenly spaced terraces which ensures that each home enjoys an incredible ocean view! The recreational area includes a large infinity edge pool, and a state of the art gym .... all of course, with large, expansive ocean views !

Papali Wailea hasn't escaped the softening of real estate prices. Starting at $ 3 700 000 at the out set, one could now own unit 19 for $ 2 595 000 ! ...... further making Papali Wailea a must see !

Thank you for reading my blog.

Aloha,

Peter Slate R(S)
Haiku Properties

Wailea / Makena real estate comps crushed

2009-02-11T08:01:00.003-10:00

Wailea and Makena real estate prices have suffered a major set back by the only real estate sale in the area during the month of January 09.

This beach front house on One Palauea, listed for $ 20 000 000, sold for $ 7 750 000 ! This sale will set the tone for other sales in the area, as appraisers will have to include it when appraising other transactions.

Stay tuned ..... this could get really exciting !

First time homebuyers win with FHA loans

2009-02-02T07:55:00.007-10:00

With housing prices continuing to fall, first time home buyers are in a great position. Not only can they take advantage of improving pricing, they can also take advantage of a Federal Housing Administration (FHA) program that allows for just a three and a half percent (3.5%) down payment, one loan, with the same interest rate as conforming, conventional loans ..... Incredible !

Add to that, first time home buyers can get that 3.5% down payment from their retirement accounts ..... penalty free !

Remember the three rules when buying real estate anywhere, any time listed in my previous blog, and take advantage of your real estate market today.

Good luck !

Wailea Makena, big houses, big discounts.

2009-01-30T08:09:00.007-10:00

The prices of coveted Wailea and Makena are under pressure ! Click on the links and follow the pricing necessary to get these properties sold .... incredible !

Top 3 Rules to Remember when buying a home - anywhere, any time.

2009-01-17T08:50:00.007-10:00

In todays soft housing market, how do you know you're getting a good deal ? Here are 3 simple rules to live by:

1)Does this house suite my needs, and does it meet all of my search criteria ? While location is very important, it's not everything. Having a house that meets all your goals is the # 1 Rule to Remember.

2)Understand the value. Appraisers assign value in two principal ways: sales comparisons (similar style homes sold in the same area), and replacement cost (what would it cost to buy the land and build that particular home on the land, minus the depreciation).

3)Are there any compensating factors ? This includes view, upgrades, yard, easy and affordable maintenance, shops and stores within short distances, manageable Home Onwers Association (HOA), and Association of Apartment Owners (AOAO) fees etc etc.

Thank you for reading my blog. I hope found it helpful.

I look forward to hearing from you.

Aloha,

Peter Slate R(S)
Haiku Properties
808 276 4017

Government seeks ways to reduce housing surplus in 2009 !

2008-12-27T19:17:00.002-10:00

With all the outrage at government over the loose handling of the Troubled Asset Relief Program (TARP) money, where after dispersing the first $ 290B to 19 different banks, mortgage rates went up ! More recently, the debacle of Government funding a request of $34B to save the "The Big 3" automakers left many on Main Street wondering. What about me?

After heavy persuasion from two huge lobbyist groups National Association of Realtors (NAR) and the National Association of Home Builders (NAHB), government knew it had to do something. Two weeks ago Government announced it would back stop through Freddie and Fannie, up to $600B in clean money. This resulted in mortgage rates dropping almost a full percentage point from 6.375 % to 5.5%, which in turn resulted in surge of refinance applications, but still only a small number of purchase applications. It was recently leaked that the Federal Reserve and Treasury Department are looking to offer 4.5 % mortgages for new and existing homes purchased. This leak has sparked a general optimism that Government hasn't forgotten about the guy in the street, and that direct action is underway. A couple other ideas being floated are a $ 7 500 tax credit for any house purchase, and trimming, or even axing altogether, the capital gains tax on housing for a period of time. Given that there are roughly 4.5 Million houses on the market in the US in general, the US Government is simply going to have to do something drastic to reduce the housing surplus ! We believe that if Government adopts all three of these steps, the housing market will soon bottom out, and stabilize.

As many have witnessed, the stock market has been difficult. Experienced investors and new-bees alike, many have taken their losses and gone into cash. Confidence is low. Given that there has been such tremendous hedge fund redemption, and that there is far more than normal cash sitting on the sidelines, that when Government brings into action a plan that Main Street can embrace, and confidence returns .... there will be a strong upward move.

If the Federal Reserve and the Treasury Dept are successful in implementing the plans mentioned above, then this will be the last opportunity for buyers to purchase homes at 70-75 cents on the dollar with great financing.

I want to thank you your support this year, and wish you a Merry Christmas, and a Happy New Year.

All the best,

Peter Slate R(S)
Haiku Properties

The Maui Real Estate Investor and a 1031 Exchange

2008-07-02T10:34:00.006-10:00

Many people have heard about a 1031 exchange, but aren't quite sure what it is, or how it works. I hope to shed some light on the subject. Important to note is that there is a tax exemption on the sale of your primary residence, and while a 1031 exchange can be applied to any property, it's most commonly applied to investment properties, where the owners tax burden is not protected by a primary residence status.

The basic principle of doing a 1031 exchange, forward or reverse, is to defer the taxes on the sale of the house that you own (relinquished property). In a forward 1031 exchange, the seller of a house transfers the proceeds from the sale of his house directly into an account with a 1031 exchange company. Note the proceeds are not realized by the seller, they go directly into an account at the exchange company. The seller then has 45 days to identify a new property (replacement property), and 180 days to close on it. The seller can identify upto three replacement properties, as not every escrow is successful, and the seller has the specified time in which to close on one of the identified properties. The seller can choose to identify more than 3 properties, but if he chooses to do so, the total value of the identified properties can not exceed two hundred percent of the sales price of the relinquished property. So, by doing the forward 1031 exchange, the seller defers the taxes due on the relinquished property, identifies a replacement property, and closes on it in a specified time period. A forward exchange will cost roughly $600.00.

In a reverse 1031 exchange, the owner of a property (relinquished property) can go about acquiring a new property (replacement property) before the the relinquished property is sold. In this case, the seller deeds the exchange company title to the relinquished property, which is held in a Limited Liability Company (LLC) at the exchange company. The owner goes about acquiring the replacement property in the regular fashion, with cash, or some cash and a mortgage, and can begin enjoying his new property. From the time the reverse exchange is established, the owner has 180 days to sell the relinquished property. When the relinquished property is sold, the proceeds from that sale are credited towards the acquisition of the replacement property, and the seller of the relinquished property is credited that amount. If for whatever reason, the relinquished property doesn't sell within the 180 days, the exchange company deeds the title back to the owner. In this case, the owner is not entitled to any refund of the roughly $ 4000.00 cost of setting up the reverse 1031 exchange.

If you have any questions about this post, please contact me by email: SA7@PeterSlate.com or by phone: 808 276 4017.

Thank you for reading my blog.

Aloha,

Peter Slate R(S)
Haiku Properties

Canadians are King

2008-05-20T08:36:00.004-10:00

The Vancouver Sun picked up on an article I wrote about Canadian arrivals on Maui, and since the article published, I've had a great response, with many inquiries into Maui Real Estate, especially ocean view condos.

Looking through the Canadian visitor arrivals for the first quarter of 2008, I arrived at the conclusion ..... Canadians are King ! The following figures are published by Hawaii's Department of Business Economic Development and Tourism (DBEDT). Below is a summary of Canadian visitors to Maui, and to the Hawaii Islands in general for the first quarter of 2008.

14 737 Canadian visitors arrived on Maui in January 08, up 38 % from the 10 654 Canadian arrivals in January 07. Canadian travel to the Hawaiian Islands for Jan. 08 was up 27%, with a daily average census of 20 500 visitors.

15 453 Canadian visitors arrived on Maui in February 08, up 68 % from the 9 156 Canadian arrivals in February 07. Canadian travel to the Hawaiian Islands for Feb. 08 was up 31%, with a daily average census of 21 168 visitors.

17 114 Canadian visitors arrived on Maui in March 08, up 23 % from the 13 862 Canadian arrivals in March 07. Canadian travel to the Hawaiian Islands for March. 08 was up 16%, with a daily average census of 18 877 visitors.

Thank you Canadians ! and thank you for reading my blog.

Aloha,

Peter Slate R(S)
Haiku Properties

Maluhia Country Ranches ..... Kahakuloa's Finest !

2008-04-03T18:09:00.017-10:00

Imagine your dream home on this spectacular view lot in a very upscale, gated community, Maluhia Country Ranches. This 2.954 acre lot offers incredible views of Haleakala, Maui's North Shore and Kahului Town. A 20 minute drive from Maluhia Country Ranches gets you to the airport and Kahului's town center. Private, secure and spacious, this Maluhia Country Ranches lot is being offered at $ 549 500. For more information, please contact Peter Slate R(S) Haiku Properties Tel- 808 276 4017.

Thank you and Aloha !

Kula, Keokea, and Ulupalakua .... Maui Real Estate's new high end market

2008-03-25T09:12:00.012-10:00

It's easy to understand why high net worth people gravitate towards resort areas such as Wailea and Kapalua. Given the manicured golf courses, and the presence of large, high end hotels to help secure the value of their investments, this clientele finds their comfort zone in these areas. However, with new development adding to the traffic congestion and living density, buyers are looking past the typical resort areas, and toward other options ..... and there's plenty to see !

Maui's Kula, Keokea and Ulupalakua areas are the exact opposite of your Wailea / Kapalua resort area, and until recently lacked the large scale marketing and awareness necessary to bring peoples attention to a particular area. Coming online shortly is a 1800 acre development in Lower Kula which will be heavily marketed and promoted by one of the biggest real estate brokerage firms in the world. Given the attention that will come with such a large scale development, and the promise of the long awaited highway that will connect Kula and Kihei with a 20 minute commute, I looked at some of the houses available on the Kula / Keokea market that would benefit from large scale marketing. The results were surprising! I found that what was once considered sleepy old "Upcountry" was, in fact, now, a very high end area, with very desirable Gentleman's estates ! Take for example this 4000 sqft, "Hamptons" style house on almost 4 acres in Keokea, or this incredible 5000 sqft plus house on 8.6 acres complete with pool and exquisite library built in Omaopio Ridge. The most recent Kula mansion on the market boasts over 7100 sqft of living area, a pool, a tennis court, a separate 958 sqft cottage, and every upgrade imaginable !

With all the marketing and roadways aimed at connecting Kula, Keokea and Ulupalakua with the high end resorts, it's my prediction that more and more high net worth people will begin to realize the true value of Maui's Upcountry Gentleman's estate. Click on this Kula, Keokea, Ulupalakua link to see a complete list of incredibly beautiful homes.

Should you have any questions, please leave a comment, or call me directly on 808 276 4017. Thank you for reading my blog.

Aloha !

Makena Property on Maui

2008-03-02T09:07:00.007-10:00

This incredible piece of Makena property is up for sale, but few understand its full potential.

With the current agricultural (Ag) zoning, and leaving the lot lines as they are, the property could be developed into five main houses and three 1000 sqft cottages. Total acquisition $ 26.5MM for the land, plus a $ 30MM (estimated) build out of all the house and cottages, totals $ 56.5MM. Total gross form the sale of the house and cottages would come in anywhere between $90 MM - 100MM (based on current comps), which allows significant profit margin. Expected permitting and build out to take 5-6 years to complete. With water meters and power available on all four lots, a buyer would be able to start planning right away. An SMA (Special Management Area) is required as part of the building permit condition.

To expand on the development possibilities: If the current Ag zoning were changed to match the Rural zoning called for in the General Plan, the owner would be able to subdivide the total property into fourteen, one acre lots, with the possibility to build a main house and a cottage on each lot. The down side being additional fire protection (water) would need to be brought to the property, a major SMA, and sub-division final approval, would need to be completed before any construction could start. With fourteen new lots, an affordable housing component would need to addressed. The upside being an even higher profit margin.

Another option would be four families who acquire this 4 lot, 14.15 acre, magical Makena property, each take a lot, and build their dream homes with ultimate privacy and space!

Click this Wailea Makena Real Estate link for a complete list of luxury properties in the Wailea / Makena area.

Thank you for reading my blog. If you have any questions, please leave a comment, or call me on 808 276 4017. I look forward to speaking with you soon.

Aloha !

Real Estate Agents Fiduciary Responsibilites Questioned

2008-01-22T22:39:00.000-10:00

2008 started with stock markets plummeting around the world. This distracted many people from the ongoing credit crises, and brought about fear and a panic sell off, which resulted in huge losses over only a few days trading.

In the Campaign debates there is much reference to what can be done to keep homeowners in their homes, and who is most likely to achieve it. As many homeowners, feeling poor from the loss of equity in their homes, and the loss of asset value in the stock market, sit and watch all this going on around them, they have begun to ponder: how did I get here ?

With home prices falling in almost all parts of the country over the last eighteen months, in some places double digit declines, here comes the the next question: Was my realtor negligent, or did he/she fail in their fiduciary responsibilities when representing the value, or the future value of a home ? If so, what can I do about it ?

Well, articles like these are seen more frequently, and if there is ever a conviction, then realtors, watch out, and be very careful of what you say !

Stay tuned ......

Reale Estate sentiment in 2008 ...

2008-01-13T21:19:00.000-10:00

There has been so much attention given to the sub-prime mortgage mess, crumbling lenders, falling real estate prices, and rapidly increasing foreclosure, its no surprise that buyer sentiment is dazed ..... confused, and buyers are possibly more than a little freaked out! I've heard seasoned real estate agents say the next cycle won't start until 2009. I disagree.

The Countrywide bomb exploded last week, with Bank of America diving on top of it just before it was too late. In the same way JPMorgan will come to the rescue of Washington Mutual, the time has come for the big banks to bail out those in need. Federal regulators are not going to stop these mergers, as there is simply too much at stake. There is no longer any need to speculate on the extent of the Sub-prime mess ... it went all the way to the top ! with Countrywide having to merge with Bank of America to stay afloat ! How much damage was there along the way ? 218 banks and lending institutions (50 000 jobs) have gone out of business in the last 15 months !! Yeah, I'd say there was some damage.

Looking forward, the Bush Administration is discussing a stimulus package, Federal Reserve Chairman, Mr. Bernanke, has assured the Nation (and the World) that the Federal Reserve will do whatever is necessary to maintain liquidity in the banking system, and the Feds are on the verge of dropping interest rates again. Fantastic ! The stock market is all over the map, which is another indicator that real estate may come back into favor sooner rather than later.

My disagreement with above mentioned realtor's is that the there is now consolidation in banking, investment groups have already taken their write-downs, and while prices will remain soft for some time, there is more incentive for buyers to put pen to paper. You gota remember, opportunity is constant.

Time will tell, stay tuned.