Canadians Buying Real Estate on Maui

Somewhat surprisingly, I continue to work with Canadians buying real estate in Hawaii. As we all know, the US dollar is strong these days and the Canadian dollar has significantly decreased in value the last five years, but just last week I was working with two Canadians buying real estate on Maui.  

In the last few years, more commonly I have been helping Canadians divesting themselves of their US properties.  With the recovery in the Maui real estate market and the increase in the US dollar a lot of Canadians have been opting out of the market and taking their gains.  One client of mine bought at the bottom of the market in 2012 for $525,000, a time when the Canadian dollar was at about par with the USD.  Late last year they sold that condo for $760,000.  This client saw a huge increase in Canadian dollar terms – I think in the end they netted about over C$300,000 profit in less than three years – an outstanding return.

Presently many Canadians have US dollar investments and can make their purchases without having to be too concerned about the devaluation of the Canadian dollar. Mortgage brokers on Maui that work with Canadians have reported to me a decline in the number of Canadians applying for loans, but there still a healthy supply of Canadian buyers in the Maui real estate market.  I think with Canadian baby-boomers retiring, and many having had USD savings we will continue to see a healthy number of Canadians buying on Maui and on the other islands.

If you are a Canadian buying real estate on Maui, Hawaii call me and we can discuss how to find you a home or condo – call me at 808 344 7855.

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Pali’akau Is a Gem Worth Discovering

It is hard to find vacant land on Maui these days, and nearly impossible to find large, undeveloped oceanfront property anywhere on the island, let alone on the North Shore.

Pali ‘akau has changed that!

Five large oceanfront lots are for sale, all with unobstructed views of the Haleakala volcano, the west Maui mountains with the yellow-pink glow of Maui’s stunning sunsets and sunrises to the west, these lots even have views of “Jaws,” the world’s largest surfable wave. See Large Map of Pali ‘akau

Believe me, this land is quite a find. The lots are among the last large, vacant parcels that will ever be available on the northshore of Maui.  The northshore of Maui, is more secluded than the large resort areas in the south and west portions of the island, with fewer tourists and some of the best surfing and windsurfing in the world.  Interest in the properties has been high since the lots entered the market in the fall. Maui NorthshoreThe largest parcel, Lot 1, is a 182-acre gem listed for $4 million, it has the closest view of “Jaws,” where professional, big-wave surfers take on 50-foot waves – Pali ‘akau Lot 1_Map

Pali’akau is located off the Hana Highway and is conveniently located within minutes of the charming towns of Haiku and Paia, once the center of Maui’s pineapple and sugarcane industries.  Paia, for one, was recently ranked among the world’s best surfing towns by National Geographic.

The parcels, which range in size from 13.5 acres to a little more than 182 acres, run up to the cliffs with a birds-eye view of the ocean. It is raw land now, which will be accessed by private roads off the highway. My hope is that each of these lots becomes a family’s private tropical paradise.

To arrange a tour of Pali’akau, or with any questions about real estate on Hawaii, please contact me at 808 344 7855 or email me at MarkMorrisOnMaui@gmail.com.

Thank you,

Mark Morris R(S)

Coldwell Banker Island Properties (Paia)

Alexandra Mitchell, 2012

Alexandra Mitchell, 2012

 

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Maui’s Real Estate Market Shows Many Signs of Stability

The latest report on the Maui real estate market shows a trend among all property classes: Prices continue to go up and sales volumes have been falling.

From January through November, the median prices for homes sold jumped by eight percent (8%) to $570,000 compared to the same period a year ago, the Realtors Association of Maui reported.

Condo prices increased by 11 percent to $415,000; fee-simple condos by 12 percent to $425,000, and land was up 27 percent to $507, 105.

With prices rising, sales volumes predictably fell in all property classes.  Condo and fee-simple condo sales are down by 11 percent, and land sales are off by 20 percent.

Total sales for single family homes have been more stable. A total of 879 homes were sold through November, down just 3 percent from the same period a year ago.

Generally speaking, Maui’s real estate market has shown signs of stability with consistent sales throughout the year.

Despite rising prices, homes and condos aren’t staying any longer on the market. For the January to November period, homes were sold in an average of 129 days compared to 125 days in 2013, and condos lasted 109 days, which was the same as in 2013.

This latest market report contains some good news for both buyers and sellers. For buyers, prices remain well below the peak in 2006, when the median price for a home was $632,000 and for condos, $472,000. Interest rates remain very low. Good deals can still be had; however, the bargain-basement properties left over from the downturn are all but gone. The inventory of REOs and short-sale properties has dwindled.

For sellers, properties that are priced right are getting multiple offers. Also, nearly half of these deals, or 43 percent, are all cash, which makes for a quicker and easier sale. Buyers, however, are holding their ground and waiting on the sidelines. So, sellers need to price their properties right if they hope to sell.

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Canadians Financing Real Estate in Hawaii – Canadians Can Get a Loan to Finance Their Vacation Home or Condo

Canadian Buyers Can Get a Loan to Finance Their Vacation Home or Condo 

Canadian real estate buyers on Maui typically love the time spent tramping through the rain forest, exploring sandy beaches and gaping at waterfalls in their quest to find a dream home on Maui. Certainly, Canadian buyers love the moment when they walk onto a deck with blue-topaz water shimmering in the distance and know this property is the one. Best moment of all comes, of course, when they sign the papers and get handed the keys.

A Canadian buyer of real estate in Hawaii will always remember the happy moment when they buy property in Hawaii. Unfortunately, this is not the entire process. Frankly, the road to the closing table covers many steps and these moments sometimes can be frustrating. One step in particular often causes anxiety for Canadian buyers of real estate in Hawaii: Getting a loan in a foreign country.

Many Canadian buyers of Maui real estate don’t believe it’s possible to get financing from an American bank. Let me assure you, they can. American banks give loans to Canadian buyers of Maui property all the time.

According to a recent article in the Globe & Mail, Canadian borrowers have several financing options. One option involves drawing out equity from their homes in Canada by obtaining a home equity line of credit (HELOC). Another is using a U.S. lender affiliated with a Canadian bank that can verify the buyer’s credit in Canada. If you want to deal with a Canadian lender, you should explore these options.

I want to talk, however, about what I see more often: When a Canadian buyer seeks conventional financing from a U.S. bank in Hawaii. First, the good news. In the U.S., Canadian buyers can choose between 15-or-30-year fixed mortgages, long-term adjustable rate mortgages (ARMs) or hybrid ARMS, which have fixed rates for shorter terms. Mortgage rates for all of these loan types remain very low.

I won’t ever give advice on what kind of loan to get. That you should discuss with a mortgage broker, a lender and your financial advisors. However, I strongly agree with most Realtors on the island that borrowers do best by using a local lender in Hawaii. Local lenders understand the Maui market, properties and neighborhoods. They are more responsive and knowledgeable about the permitting issues, appraisals and taxes. Overall, the underwriting process just tends to go more smoothly when a local lender is handling it.

There are two other pieces of advice I’d like to give to give Canadians buying real estate in Hawaii when seeking financing for their home on Maui. It’s about attitude, two essential ‘Ps’:

Preparation: You should have your financial information at your fingertips when you sit down with a loan officer. Canadian borrowers usually need to show at least two years of financial statements to prove assets, liabilities and credit history. These documents are likely to include two forms of ID, T-4s, tax returns, and mortgage statements, among other documents.

Patience: Canadians have to jump through more hoops than an American borrower. So, patience is needed. As a Canadian, you’ll sometimes have to pay a larger down payment too, as much as 20-to-30 percent for a house and 35 percent for a vacation-rental condo. Expect also to pay a little higher interest rate on your mortgage, anywhere from 0.5 percent to 1.5 percent more.

Personally, I found another “P” works nicely too: A paddleboard. Seriously, go rent one. When the process of buying a house in the islands gets you down, just think of where you are. You are on Maui, my friend, and one step closer to owning a piece of paradise.

Please contact me at 808 344 7855 or email me at MarkMorrisOnMaui@gmail.com if you would like to discuss real estate on Maui or the other Hawaiian islands.

Thank you,

Mark Morris R(S)

Coldwell Banker Island Properties (Paia)

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Canadians on Maui: You Can Buy Your Dream Home in Paradise!

Canadians can buy property in Hawaii!

If you are a Canadian and have visited Maui even just once, chances are you’ve felt the warm sand on your toes and watched the fire glow of the sun dip over the ocean, and said to yourself, ‘Wouldn’t it be nice to live here?’ For some of you, this thought will become a dream, a nagging obsession. I know that’s true because it happened to me before I took a leap, moving from my boyhood home of Vancouver, B.C.

As an experienced Realtor who has helped many Canadian buyers find their dream home on the island, I also know why people hesitate. It can be a big, scary thought to buy property in a foreign country. You might think that the bureaucracy and paperwork will be too much of a hassle, or you won’t be able to get a loan. I hear this all the time from Canadians who call me for help.

Admittedly, Canadians will find the process of purchasing a home or condo a little different than they did in Canada, but not that different.

Let’s look at three major questions that sometimes scare Canadians away:

I Can’t Get A Loan. Yes, you can. The underwriting standards are only a tad tougher on Canadian borrowers. Foreign buyers typically need to put 30 percent down on a home and 35 percent on a condo, a bit higher than the normal 10-to-20 percent range for U.S. buyers. A Canadian borrower with good credit also often has to pay a 0.5-to-1 percent higher interest rate. The good news is that fixed rate, 30-year mortgages are available in the U.S. and interest rates are still  very low.

It Will Take Forever. No, it won’t!  Like any American buyer, a Canadian buyer of Maui property does have to go through a process from finding the right property to the closing process.  The process is a little different than in Canada but not greatly so.  The buyer should hire professionals, including an appraiser, a building inspector, a title and escrow agent and maybe an attorney. In many cases, a sale can be completed within 45 to 60 days after the buyer signs a contract. However, the time can vary significantly.

The Taxes Will Kill Me. Canadians do have some tax liability when investing in U.S. property, but it usually is not a deal breaker. When it comes time to sell a property, non-U.S. citizens are required to set aside 10 percent of the sales price to ensure that U.S. taxes are paid on any capital gains due.  Hawaii has a similar law that requires the seller to set aside 5 percent. (Please scroll down and see my earlier blog on FIRPTA and HARPTA.)

Foreign buyers also need a TIN (Tax Payer Identification Number), especially if they are planning on renting out a property.  If there is rental income derived from a U.S. property then the owner will be liable for U.S. taxes; and, therefore will need to file a tax return in the USA with that TIN number.  Basically a TIN number is like a SIN number in Canada, but it’s for non-residents.

Once upon a time, I had the same doubts and questions about moving to Maui from Canada. It was a big leap, but not an overwhelmingly one. Let me assure you that Canadians are making their dream of owning a property in Hawaii come true almost every month. If you are Canadian looking to purchase a condo, home or land on Maui, I would love to answer any of your questions and work with you to find the right property for you.

Mark Morris, Realtor   Cell# 808 344 7855      Email: MarkMorrisOnMaui@Gmail.com

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Jaws – Large Vacant Land Parcel

Today saw the market release of the first of two large land parcels above Jaws.

Jaws, otherwise known as Pe’ahi, is the famous site on the Northshore of Maui of the largest surfbreak in Hawaii.  These vacant land lots are located in the area of Haiku, Hawaii, in subregion of Pe’ahi:

Click Here to View Listings

The first of these large vacant land lots on the Northshore of Maui is 278 acres and has great views of the ocean and Haleakala.  There are multiple building sites and the potential for subdividing the lot into many more smaller lots.

Stay tuned, this next big release of land lots on the Northshore of Maui will be the largest and last big release of vacant land lots in Haiku.  After this there is not much oceanfront land available on Maui.

For more information on this lot and others that are soon to become available, please contact Mark Morris at 808 344 7855 or email me at MarkMorrisOnMaui@Gmail.com

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Great Article on the Current Market and How it has Changed Significantly

Maui Real Estate Market Improving

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