MauiMovingSource.org - Housing - Maui Housing and Real Estate Explained

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Contents:

To Buy
To Rent
Tropical Living
Brief Description of Areas to Live

To Buy:

Warning. The Maui real estate market is irrationally hot. There is a feeding frenzy with people willing to pay very inflated prices. Please remember, the Maui real estate market is not driven by the Maui economy. It is driven by economies and markets far away. In the late 80's and early 90's the Japanese were buying up Hawaiian real estate left and right, and like now, no price seemed too high. The Japanese economy went in the tank and a lot of Japanese lost a lot of money.

Today's market is primarily driven by California. History has a way of repeating itself. Should the economy of California falter, the effects will be magnified here on the islands. Imagine Hawaii being at the end tip of a long whip. When the whip pops, the strongest effects are felt at the end, and property values will nose dive, just as they did before.

We've received reports that some insurance companies will not insure a house for the full price you paid for it because they feel the prices are drastically overvalued. Keep that in mind as you shop for property.

As for buying, bring your checkbook, heck bring the checkbook of a few friends as well. Here are the median prices as of June 2005, nearly double what they were a few years ago:

Single Family Homes = $735,000

Condos = $405,000

Land = $673,216

To sample the Maui offerings, please visit the Maui Board of Realty website.

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To Rent: (see classified section of the Maui News for listings)

To know your legal rights, read the Hawaii Landlord Tenant Handbook.
New York Times Article: Rent vs. Buy

A strong case can be made that it is a better financial move to rent on Maui instead of buy, even with the inflated rents. Consider the following example. A nothing too fancy 3 bedroom home in Kula can cost $800,000. With 15% down and a 30 year mortgage at 6% your mortgage would be about $4100 per month. Add in property tax, trash, yard care and water and that bill goes higher. To rent the same home will cost $2000 - $2300 per month, with no tax, no trash/ water/ yard bills as traditionally those fees are taken on by the landlord. Do the math, over 30 years your rent bill will be about the same as your interest payments to the bank over the same period of time if you bought instead.

Many long time residents are selling their homes to take advantage of the inflated market and then moving into a rental.

If you are buying a property to then rent it, even with the high rents, you're likely to not be able to pay your mortgage with the rents collected unless you build a bunch of cottages, and there are strict Maui zoning laws governing the building of cottages.

Illegal Ohanas (cottages): When you look in the paper for a rental you will see many listings for "ohanas" or cottages. "Ohana" is the Hawaiian word for extended family and refers to an attached or detached in law apartment or cottage. A significant portion of these "ohanas" are illegal dwellings that violate Maui's strict zoning laws. Some landlords attempt to rent these structures knowing full well it is illegal to do so. What this means to the unsuspecting renter is that the County can show up at any time and evict you with no warning. To protect yourself, before you sign a lease for an "ohana" or cottage, call the Maui County Department of Planning's Zoning Administration & Enforcement office at 270-7253. Provide the very friendly officer with the exact address of the "ohana" and they will tell you whether or not the dwelling is legal. It's a matter of public record. If it's not legal, do not rent it as doing so will put you in a very vunerable position, essentially stripping you of your legal rights as a tenant. If you rent one anyway, insist upon a good discount.

To see a photo and short article on an actual illegal cottage, click here.

Paradise Tax:
Rents have risen 30% - 40% over the past 3 years thanks to the real estate boom. To view the sad state of affairs please go to the Maui News and click on the classified section. They update their online listings everyday and they are the exact same ads you'd see in their print edition. The greed is in high gear. It's so bad that even the Maui Dharma Center, supposedly a compassionate Buddhist organization, decided to cash in by raising the rent 40% on a wheelchair bound fixed income woman renting on their property.

Perhaps the 4th Noble Truth has been rewritten and is now, "Market Forces, grasshopper." 8-)

Rental Price Ranges:
(these are generalities, see the Maui News Classifieds for specifics)

Studio = $800 - $1100 per month
1 Bedroom = $900 - $1500 per month
2 Bedroom = $1400 - $2000 per month
3 Bedroom = $1600 - $2500 per month

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A few observations about renting in the tropics:
In the down country areas, those at or near sea level, the temperature only varies 7 degrees throughout the year. Because of this, most dwellers leave their windows open year round in order to let the breeze blow through. Very comfortable indeed. However, in the more crowded areas of the island, this also means that you're likely to hear far more of your neighbor's life than you'd want. Talking, arguments, the TV, people having sex, you name it, whatevah, you'll hear it. The tropics are different from the mainland where the windows are only open a small part of the year. Just something to keep in mind so that you are prepared.

The rental market is currently blistering hot, competition is stiff, especially in West Maui.

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Here are brief descriptions of the areas listed the Maui News' classified ads.

Central:

Refers to Wailuku, Waiehu and Kahului. Away from the major tourist locations, this area has a large local population (very friendly) and some of Maui's best inexpensive places to eat. Climate is tropical, highs around 90 in the summer and low 80's in the winter. The housing is congested, but generally less expensive than other parts of the island. Fewer beaches than west or south Maui.

West:

Refers to the area from Lahaina north to Kapalua. Lahaina is shielded from the trade winds thus is dry and often very hot. If you go north towards Napili or Kapalua it gets progressively cooler due to trade winds and more rainfall, much more comfortable than Lahaina. West Maui is the center of tourism on Maui, hence there are lots of jobs which leads to high demand for housing which leads to the highest rents on the island. West Maui has a very party, hedonistic climate to it.

South:

Refers to the areas of Makena, Wailea, Kihei and Ma'alea.

Makena and Wailea are very high end, similar to Ka'anapali and Kapalua in West Maui. Some of Maui's best beaches are in Makena, world class. Climate is dry, almost desert like, and tropical. A very nice area.

Kihei is a bit of a mess, a poorly planned community with rampant out of control growth. Tons of condos in Kihei. Rents used to be lower there but have caught up in recent years. Lots of places to eat and low paying jobs to be had. Due to the ice (crystal meth) epidemic, crime has been on the rise island wide, but especially in Kihei. Decent beaches, can get windy and hot.

Ma'alea is a small port town with a few condos for rent. Be forewarned, this is the most windy location in the state of Hawaii and a wind farm is in the planning stages. Hold on to your hat!

Upcountry:

Refers to Paia, Haiku, Makawao, Pukalani, Kula etc. These areas offer more bang for your rental buck, but are generally farther away from work than other parts of the island.

Paia is a small hippy town near Baldwin Beach and world famous Ho'okipa, the world capital of wind surfing, and home of Mana Foods, the best food store on the island. A very laid back surfing community. Sprecklesville is more high end. Tropical climate, but not too wet.

Haiku is a rural area running from sea level to an elevation of a thousand feet or so. This is windward Maui, lots of rain (no really, lots of rain, mold), trade winds to keep things cool, and lots of tropical beauty. If you want a bit of privacy and still want the tropical warmth, this is a good place to live. Rents are lower, but still not cheap.

Makawao and Pukalani are at about 1500 ft elevation. 5-7 degrees cooler than sea level. Pukalani is a bit drier than Makawao though Makawao has more charm. Once again, rents offer a better value. Very friendly places.

Kula covers an area on the slopes of Haleakala from roughly 2000 ft to 4000 ft elevation. The climate is subtropical, similar to Santa Barbara. Very rural and peaceful. Rents are higher in Kula than in Haiku and Kula is much drier while still affording an ideal climate to grow flowers. For instance, at 3000' elevation, summer highs are around 75, while 69 in the winter. Nights are in the upper 50's during the summer to lower 50's, even some 40's, in the winter. A typical Kula day is sunny in the morning, and cloudy in the afternoon. No stinging centipedes or scorpions like down below.

Keokea and Ulapalakua are similar to Kula, only more rural. There are fewer rentals the further out you go.

East:

Refers to Hana and all places in the direction of Hana. Very tropical, very rainy and very beautiful. It is not practical to live in Hana and work in any other place besides Hana. And there aren't many jobs in Hana, keep that in mind.

And there you have it 8-)

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