Newsletter XIX

May 24, 2004

Perhaps, because I am the senior Real Estate agent on the West Side, and having lived here on Maui for 36 years, many of the younger Real Estate agents respect what I have to say. Lately, many have asked me my opinion, concerning the present Real Estate climate, as well as where we are heading in future sales.

I think it is worth repeating, but having grown up in Hollywood, as a teenager, when I was not working, I would head for the beach at either Malibu, Santa Monica, or Venice, and occasionally I would go to Hermosa Beach, as well as Manhattan Beach, Newport Beach or to Balboa Island.

In 1963 my former wife and I visited Hawaii, toured all the islands, and once we discovered Maui, and stayed at the brand new Kaanapali Sheraton Hotel, we had no desire to go to any other island than Maui, which we did for 5 years in a row. When I finally got the guts to pull up stakes and move to Maui in 1968, I opened the first beach concession on Maui, on the beach at the Sheraton Hotel. I had brought with me the knowledge of the growth I had experienced in Southern California, or the Blue Print of where Maui would be heading in the future, and so far it has played out exactly how I had envisioned it.

Today, everyone will agree there is a land rush for lots and acreage on the West Side, and with the lack of inventory, partially due to the Counties "Planned Growth" policies, land is even tighter than ever, and as always "SUPPLY AND DEMAND RULES."

In the last two years the pricing on all properties have increased dramatically, but it has still not deterred people from wanting their own little piece of Paradise.

As an example, a home that I had listed for $895,000 a little over a year ago, where I could not sell the home for even $800,000, it will now sell in one day for over a million. I have had a license since 1970, and since 1995, I have sold 51 houses in the area, with 17 sales on one street alone.

As of recently, I have constantly been asked the question, "how long will this last, or when will the bubble burst?" I fully expected that we would have been in recession by now, based upon what I had experienced in 1974, 1984 and 1994. In the year 2001, the first three homes that I did sell, closed escrow for a bit lower that what the owners anticipated, and it appeared we were following the predictable down turns in the market.

As I had touched on in my two previous Newsletters, the impact o 9/11 hit us all, and sales of homes came almost to a dead stop for a short period of time. The prices on Real Estate flattened out, the inventory of homes started selling off, and it was hard to believe, but suddenly there were only two houses for sale in the Kaanapali area. Then the prices for homes ramped up sharply, which is where we are today.

Where are we heading now? Theoretically we should nave experienced a slow down in sales when the year 2002 rolled around, but it did not happen. Yes, if interest rates begin to climb, it will eliminate some of the buyers, but historically, interest rates may not go up until after the presidential elections. Some of my wealthier clients believe the surge in buyers will continue on for several more years, and they may be right. Having purchased and sold our own properties for over 15 times, the first 9 years living here on Maui, we have always managed to make a profit on every property we have owned, as well as real estate I owned in California, through the ups and downs of the economy.

It is my opinion, that in the long run, many more people will want to live on Maui and enjoy the weather and lifestyle Maui offers, which was the attraction for me from the first day I drove into Lahaina.

With the constant threat of a terrorist attack on the mainland, I do know , if I still lived in a city, the threat would constantly be on my mind, and I assume it is one more factor why people desire to buy property on Maui. I doubt very much that the terrorists will want to waste their resources and time to target little old Lahaina, for I am sure they have plans for a major city, which of course I pray will not happen.

Many years ago in 1971 when we were in a recession, I was talking to a couple I Lahaina, who were debating if they should be investing in real estate in the area, and I said to them: "As long as we don't have a major depression, a revolution, terrorists start shooting down airlines, or the sun stops shining, Maui will still remain on e of the safest, and most beautiful places to live, and invest in this world."

Sincerely,

Cliff Mc Queen (S)
President of Galaxy Inc. 
DBA Maui Isle Realty

Call: 808.669.5377 / web: www.maui-isle-realty.com / email: landnmaui@aol.com 

Copyright© 2004 Cliff McQueen