The Kihei real estate market

Skyline of Kihei, Hawaii
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The Kihei real estate market, which is a subsidiary of Maui’s larger housing market, may be a good place to look for investment properties. According to an October 11, 2010 article from Pacific Business News, Kihei has had a large amount of foreclosures and short sales in recent months. The report by Janis L. Magin noted that “REOs, the industry term for those houses and condos the banks now own after taking them back through foreclosure, that have been put back on the market for sale have kept prices down in a lot of areas on Maui, Kauai and the Big Island. Same goes for short sales, those transactions where the property sells for less than what the homeowner owes, which is usually less than what the market-priced home across the street sold for. What that means is the median-price home on Maui last month was $440,000, the same as it was in September of last year, but nearly $100,000 less than two years ago, and more than $150,000 less than September 2007, according to the numbers recently released by the Realtors Association of Maui. In 2006, that median-priced house went for $769,000. Some neighborhoods actually saw prices rise, but places like Kihei, which has seen a lot of foreclosure and short-sale activity, are still seeing lower median prices. For example, the median-priced home in Kihei that sold for $450,000 in September 2009 sold for $381,000 last month, a 15 percent discount.”

Among distressed sales, more Hawaii homes for sale and Kihei homes for sale were sent to short sale as opposed to foreclosure. A September 30, 2010 article in the Honolulu Star Advertiser stated that “More Hawaii homeowners are going the route of a short sale rather than foreclosure when they are unable to keep up payments on their homes. A new report from real estate research firm RealtyTrac shows that there were 298 short sales in the second quarter compared with 228 sales after lenders took back homes at auction. In a short sale, lenders approve selling the property to an interested buyer, often for less than the seller owes on the mortgage. It is a way for the owner to avoid foreclosure and the possible negative impact it could have on credit scores. The average price for all Hawaii home foreclosure sales was $383,292. RealtyTrac said that was 12.5 percent less than the average for all nonforeclosure home sales in the period in Hawaii.”

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