Often when it’s time to once again get my Monthly Newsletter into your e-mail boxes I scramble for worthy material. After 17 years without missing a month I guess that’s to be expected. This month, though, my Inbox has been inundated and it’s been a matter of deciding what to eliminate. Perhaps, like me, sheltering-in-place has given purveyors of Real Estate news a lot more time on their hands.
Let me start with housing news on a national level, which for the most part is good. I’m going to give you a brief overview and lots of links to articles that will help pass the time on one of those Covid-19 stay-at-home days.
First, and no surprise to most, interest rates on residential properties are at an all-time low since 1971 when Freddie Mac started keeping records—a stunning 3.15% on 30-year fixed! New construction is performing better than expected, and competition from first-time homebuyers has temporarily pushed investors to the sidelines. Lack of inventory continues to be a bit of a roadblock but as business around the country begins to open up more and more and prices hold, more sellers may be encouraged to come to market.
While buyers and agents still strive to maintain social distancing, in-person showings–and in some areas Open Houses–have seen an uptick. This, in itself, has created more pending sales in May than the previous April and March. While some economists are a bit surprised at the tenacity of the housing market, nonetheless the outlook for the rest of the year has been upgraded for both number of sales and prices. Home sales are expected to decline by only 11% instead of 15%, and prices, rather than remaining flat, are expected to rise by 4%. Go figure.
The housing market on Maui is following many of the national trends, but I still believe there’s a potential maelstrom lurking in the plumerias. The state’s economy–and perhaps even more so Maui’s–is driven by tourism, pure and simple. The ability to offer properties, especially condominiums, for short-term rentals is a definite driver in establishing market value for such units.
As the world turns and state and local authorities begin opening the economy—including hotels, retail stores, hair salons and barber shops, restaurants by degree, state parks, beaches and swimming pools, even gyms—quarantines and restrictions remain on visitors coming to the islands. The 14-day quarantine, which requires visitors and residents to be confined to their hotel room, condo, or home (in the case of returning residents) for 14 days, is a definite deal breaker. The quarantine has been extended to June 30 and it is expected Governor Ige will extend that date at least through July in the next few days. Some believe September may be the earliest the quarantine will be lifted.
As our tourism industry stagnates, owners of vacation rental properties, car rentals, property managers, housekeepers, handymen, furniture stores, restaurants, etc. are hurting. Some think it will be 2025 before tourism returns to 2019 levels.
So far, we have been very fortunate here on Maui to have had relatively few cases of corona virus, and even fewer over the last several weeks (see Covid-19 update). Our Mayor wants to keep it that way. It is one of those nasty little problems with no solution for the foreseeable future. One thought is to test all passengers heading this way prior to their departure and enlist the airlines to be the gatekeepers. The airlines have yet to agree to that plan. A serious outbreak in the state would be a major disaster so “caution” remains the word.
Thus, many owners, especially of mid-range and entry level vacation properties, are paying mortgages and maintenance fees every month with zero income. In my opinion, this will inevitably cause some to throw in the towel and attempt to sell their units. This may create some opportunities for buyers. Personally, I am not one to get enthusiastic about benefitting from other’s hardship or loss, but that may become a reality.
No doubt you are wondering about the funny little guy (me?) and the doghouse you saw when you opened this letter. Our Maui Humane Society holds many hearts near and dear as they champion the rights of lost and abandoned animals. Although they prefer not to be referred to as a “no kill” facility, they make maximum effort through an extensive foster home program they have established to find good homes for all furry friends they take in. Some foster parents are even on the mainland. Only animals with end-of-life conditions or behaviors that make them unadoptable are laid to rest.
In an effort to further support their mission, I am positioning to be a resource to people with pets who want to own Maui Real Estate. I have current information on quarantine laws, properties that are pet friendly, veterinarians, pet-sitters, etc. In addition, I will donate $500 to the Maui Humane Society in my client’s name with every completed transaction. That’s my cute kitty “Mooshka” in the photo.
There was one new Covid-19 case reported today on the island of O’ahu, bringing Hawai’i’s COVID-19 case total to 653.
To date, 609 people (95.7%) have recovered including 111 in Maui County. There are currently 27 active cases in the state.
The breakdown by island includes the following:
O’ahu: 422 confirmed positive (398 released from isolation);
Maui County: 120 confirmed positive (111 released from isolation);
Hawai’i Island: 81 confirmed positive (81 released from isolation); and
Kaua’i: 20 confirmed positive (19 released from isolation).
Hawai’i residents who were diagnosed outside of Hawai’i: 10 confirmed positive.
Pending cases, where the island of residency has not been determined: 0
I’m exhausted from writing this, and I’m sure you’re exhausted from reading it, so I promise to pick up the Featured Listings you’ve come to expect next month. But I do want to end with this:
The last many days of events in our country have saddened me deeply. In some ways, it seemed a bit trite for me to be writing a Real Estate Newsletter when we are facing a deadly, life-changing Pandemic and our cities are burning with civil unrest. These are the most difficult times I have experienced in my 70+ years on this Earth.
Beyond current events, our democracy is constantly being challenged, our Constitution is being tested to the max and often trampled, and now the result of hundreds of years of systemic racism in this country is rearing its ugly head. We cannot continue on this path; it is literally a dead-end street.
The social, economic, and political divide in this country must be addressed. Many of us Baby-Boomers made a pass at it in the 60’s—Peace and Love, you know—a good concept but lacking the commitment to make it sustainable. Selflessness ultimately gave way to selfishness; the lure and pursuit of a more decadent lifestyle—we became fat, bald, and the fire that burned in our bellies became great stories to share with our wide-eyed grandkids.
Indeed these times have caused me to lament the dream that never was. But we still have a chance to right the ship—at least get it going in the right direction. There are thousands protesting in the streets—most peacefully; perhaps you have been one of them. America needs real change—NOW!
We have an election coming up in November (God willing). The best way to make yourself heard, to support your belief system whatever it may be, is to get out and vote.
Maui Realty Associates
(808) 283-9093 cell
(808) 879-5510 fax