MAUI LIKE ASPEN?
A colleague sent us a fascinating article from New West today. In it the author cites a number of major trends that make Aspen real estate expensive today and likely more so tomorrow. Here's a snippet:
Along with a handful of other resorts, Aspen's international credentials are unique. The real estate market here is cushioned by a global demand for the Aspen product - a sport, intellectual, and cultural mountain resort powerhouse that’s unmatched anywhere in the U.S. And there is a limited supply of properties here.
Except that we are ocean rather than mountain drive, they could be talking about Maui. So what are the key drivers of this phenomenon? Here are several:
1. Baby Boomer Wealth: An estimated $30 Billion is expected to transfer from the WW II generation to baby boomers (Forbes).
2. Stock Market: New records are being set (DJIA).
3. Fall in the Dollar: US properties are now trading at a larger discount (about 40% compared to five years ago) from a European perspective.
4. Technology: Advances in information technology, communication infrastructure, the emergence of the service economy and the aging demographics have created a “footloose economy”. The economy is no longer bound by “space” and geography.
5. New Global Wealth: There has been a huge ratcheting up of global and US wealth accumulation. China, India and Russia are obvious international examples. In the US, the hedge fund industry is remaking the world of wealth.
According to a recent New York Times article, this surge of new money is “reshaping wealthy communities as drastically as did the dot-com boom a decade ago…in less than a decade, hedge funds have created a class of centimillionaires…in Greenwich, Ct. super luxury home sales increased even as the total number of homes sold fell 10%.”
6. High End Real Estate Resilience: Traditionally, upper end real estate markets tend to hold their own even as the rest of the housing market slows. Wealthy buyers are seemingly buffered by market volatility.
7. Trophy Properties: Everywhere one looks, trophy properties are being snapped up at unbelievable prices.
8. Public Lands as Magnet: People are flooding to areas surrounded by public lands - US National Forests, National Parks, BLM - places where ‘open space’, green forests and wilderness appeal prevail. Dominated by recreation and tourism, they have become the equivalent of prime waterfront property.
The entire article is worth a read as many of these trends clearly apply to Maui as well.
Contact us to discuss this further.