From Phoenix to Maui Real Estate

Hello Again from Ground Zero in Phoenix Real Estate!

Today we are going to do something a bit different. I've just gotten back from Maui, and I thought it may be interesting to compare Real Estate in Phoenix to Maui. Two very different markets, but with alot of similarities too.

If you are looking for Real Estate in Phoenix, AZ you have alot more choices than Maui.....prices in Maui cluster in the $300-$600 per SQUARE FOOT range. That means that, in Phoenix Real Estate terms, your 1300 sf home that sells for $120.000 here will sell for $400,000+ in Maui. Ouch. Affordable housing there is considered below $200.000. It's an interesting Real Estate Market. Condos on the beach are less expensive than say, California, but homes inland are more expensive. Go figure?

This also means that you need 3-4 times more for a down payment, AT A MINIMUM. Why? First, higher price equals higher amount down, even with the same percentage required. Second, FHA loans cap out, and you will need to put more money down to bring the loan down to an allowable amount.

For investors, it is interesting to note Maui County's policy on rentals. Quite a bit different than Real Estate in Phoenix AZ. If you are planning to use the home as a rental in Maui, they Double (that's right, DOUBLE, your property taxes. Imagine how THAT would go over in Phoenix.

Phoenix Real Estate is down over 50% from the bubble high of 2005. Maui homes are down about 25-30%. The belief there is that values will continue to drop some more, but in Phoenix not everyone is so sure. Prices in Phoenix have shown signs of stabilization.

In short, Real Estate in Phoenix, AZ has frankly fared more poorly than Maui. That's the bad news. The good news, is that it has created an unprecedented buying opportunity in Phoenix Real Estate. The median value is now down to $140.000. Prices are at 2003-4 levels. Sooner or later, they will return to historical norms, meaning that Real Estate in Phoenix AZ has probably 5-6 years of apprecdiation at the historical norm of 3% to catch up on now. That's 15-20% unrealized appreciation. Now that's a sound buy!