Maui Luxury Real Estate LLC ~ The Hansen Ohana ~ September 2022
As we enter the Fall and Holiday Season of 2022 the real estate market continues to smooth out! Inventory is increasing and prices have stabilized. Energy costs have a huge effect on inflation as the country and the world moves and operates on energy. A recession appears to be upon us with the traditional benchmark of 2 quarters of a fall in Gross Domestic Product, coupled with very high inflation. As of August 31 we experienced 8.3% annualized inflation. The cost of essential items including food, gas, rent, and higher mortgage rates attributes to these increases. The United States needs to move back to energy independence whether it is clean energy, solar, wind, ample supplies of gas, diesel, natural gas, clean nuclear energy and the like. If the United States can cautiously move away from fossil fuels to clean energy over time, maybe the technology will spread throughout the world and help solve some of the countries who pollute the most. I am not sure we can get there in 12 years as some have said, but we will get there, and we should hopefully move there without killing our economy and energy needs.
Maui’s Economy: We continue to attend economic seminars and watch the market. Single-family home prices have actually decreased over the last year by 5.9% to a median price of $983,575. Condos median price increased 26.6% to $820,000. New listings of single-family homes decreased 26.7%% and condominiums decreased by 30.7%. Months’ supply of Inventory of single-family homes increased 60% and condominiums increased 87.5%. Some may say interest rates are too high, but the reality is that we have all been spoiled by 3% mortgage rates over the last few years. How many remember 17% interest rates in the past? People were happy to pay 6% and now that rates are around 6%, Buyers are still hesitant, but with 8.3% inflation, home prices remain a good hedge against inflation. In addition, rents should continue to increase while your mortgage payment remains stable. Don’t forget that the interest portion of mortgage payments are deductible against your income while rents and not. Ask your Tax Professional about your personal situation. Current studies have shown that the monthly cost of owned homes verses rental homes becomes less expensive on average after 3 years while home values should continue to rise. We have seen price reductions on listed properties, however it appears that these reductions are not a decrease in value but rather Sellers adjusting to present market value.
Paul Brewbaker’s economic discussion: A recent economic discussion with Paul revealed many facets of our local, state, and our country’s economic situation. We are linked more than ever to global issues. The discussion covered many facets in our ever-changing world. His recommendation is to be prepared for events that may unfold for the future and learn from the past. Take care of your car, home (due to supply problems), and family. Be knowledgeable in your financial investments. For more in-dept information you might want to watch Paul Brewbaker in the following link to his recent one-hour interview. https://www.mauirealestate.net/mauirealestateradio/#video_14
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Bob Hansen PB R(B) 808-283-9456 RB-17532
Clint Hansen BIC R(B) 808-280-2764 RB-21616
Donna D. Hansen R(S) 808-280-1650 RS-49765
MAUI LUXURY REAL ESTATE LLC
The Hansen Ohana ~ Maui’s Real Estate Family for over 30 years