This past week, unit 2F, a one bedroom with excellent ocean views has gone into escrow. That unit has been listed for $1.575 million and has been on the market for three months. There have also been two modest listing price reductions in the complex this week.
Subprime borrowers are those with credit scores which are inadequate to qualify for a conforming mortgage. A conforming mortgage is one that qualifies in all respects with the Federal agency guidelines and can easily be resold in the $6 trillion mortgage capital markets. Sub-prime mortgages instead are divided in such a way that creates various risk categories and then resold. What has happened recently is that these subprime mortgages have seen higher than expected defaults. That hinders the ability of providers of sub-prime mortgages to gain access to more capital for additional growth. That, in turn, has created a crisis for sub-prime mortgage providers and they have stopped making loans. The question then becomes what will be the impact on the housing market in general? There are two schools of thought. The first says that these default rates will not rise much from here and the impact on the housing market will be muted. The big mitigating factor in this view will be continuing job growth and wage increases. The second is the doomsday scenario. This school says that construction job losses and reduced consumer spending as confidence in housing collapses will lead to an economic recession which will in turn lead to fewer people looking for new homes and on and on we go.
Every few months the Journal interviews sixty economists to gauge economic expectations going forward. What makes this report telling is that it is after the subprime mortgage market collapse of the last few weeks. Here are the average expectations from the group:
West Maui's newest development, Ukumehame is now available. It is located fifteen minutes south of Lahaina and consists of forty-three lots of between 2.7 and thirteen acres zoned for agriculture. Each lot will offer stunning, panaramic ocean views. All utilities will be underground so no lines will mar views.The community will have strict CC&R's to protect the neighborhood. Prices are in the $1.1-$1.3 million range. Great lots remain. If you like the West Side and are looking for a very large parcel on which to build a dream home, please contact us!
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Since the beginning of 2007, three Wailea Ekahi units have gone into escrow. In the past week, unit 44E, a studio asking $675,000 was both listed and went into escrow. Currently, Wailea Ekahi has fifteen properties listed. They have been on the market an average of four months. Wailea wide, over 120 condominiums remain for sale. For more information, contact us!
According to today's Wall Street Journal, Japan's economy grew at a robust 5.5% annualized rate in the fourth quarter of 2006.
A colleague sent us a fascinating e-mail this morning. It is entitled "Global Intelligence Briefing for CEO's" and is written by Herb Meyer, a former Special Assistant to the Director of the CIA. In this briefing, Meyer speaks to four major transformative issues facing the United States. Here are some snippets most relevant to Maui property owners.
In today's New York Times business section, an article claims "Troubles Hit Real Estate at High End." A problem for Maui? Not if the article is accurate. What anecdote are they describing? A planned condominium conversion of the Royal Palm Hotel in South Beach that has had no sales and has gone into the bankers' hands. Here's the key to the entire article:
The local humpbacks are at their most active in the month of March. Why? The naturalists tell us it is because those still here have yet to mate and are getting, um, anxious before their return to Alaska to feed. This is among the very best times to get on a whalewatch boat and spend half a day in the presence of these magnificent beasts. If you're fortunate you'll see them breach (photo 1) or a competition pod fighting over a female (photo 2). The last photo was taken by gifted local photographer Monica Sweet. For more of Monica's extraordinary work go here. Don't let the season end without seeing Maui's gigantic treasures up close.
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