Luxury Home Magazine

SINGLE FAMILY RESIDENCE CONDOMINIUM 2013 Median Price 2014 Median Price Median Price % CHANGE 2013 Median Price 2014 Median Price Median Price % CHANGE Central $397,979 $416,245 5% $242,000 $255,250 5% Haiku $625,000 $800,000 28% - - - Hana - $459,000 - - - - Kaanapali $1,500,000 $1,737,500 16% $679,900 $794,900 17% Kahakuloa - - - - - - Kapalua $3,147,500 $3,250,000 3% $795,000 $974,000 23% Keanae - - - - - - Kihei $487,500 $635,000 30% $299,500 $315,000 5% Kipahulu $592,500 $807,500 36% - - - Kula/Ulupalakua/Kanaio $550,000 $775,000 41% - - - Lahaina - - - $347,000 $450,000 30% Lanai $349,250 $440,000 26% $95,000 $1,700,000 1689% Maalaea - - - $312,500 $530,000 70% Makawao/Olinda/Haliimaile $400,000 $543,125 36% - - - Maui Meadows $1,235,000 $1,112,500 -10% - - - Molokai $358,000 $250,000 -30% $91,000 $140,000 54% Nahiku - $233,000 - - - - Napili/Kahana/Honokowai $836,500 $850,000 2% $335,000 $356,250 6% Olowalu - $1,425,000 - - - - Pukalani $485,000 $582,000 20% - - - Sprecklesville/Paia/Kuau $545,000 $1,375,000 152% $247,000 $270,000 9% Wailea/Makena $2,750,000 $2,108,000 -23% $877,000 $1,000,000 14% MAUI SUMMARY $511,500 $585,000 14% $369,900 $403,750 9% SINGLE FAMILY RESIDENCE CONDOMINIUM 2013 Median Price 2014 Median Price Median Price % CHANGE 2013 Median Price 2014 Median Price Median Price % CHANGE Puna $149,000 $169,000 13% - - - South Hilo $290,000 $268,500 -7% $129,500 $110,000 -15% North Hilo $277,500 $454,000 64% - - - Hamakua $395,350 $346,000 -12% - - - North Kohala $449,000 $650,000 45% - - - South Kohala $374,423 $427,000 14% $440,000 $475,000 8% North Kona $439,086 $514,764 17% $239,500 $260,000 9% South Kona $290,000 $440,000 52% - - - Ka'u $157,000 $149,500 -5% - $165,000 - BIG ISLAND SUMMARY $293,750 $320,000 9% $275,000 $295,000 7% (continued from page 60) Example: Taxpayer originally acquired Property A for $20,000. Taxpayer disposed of Property A in a tax deferred exchange for $100,000 and acquired Property B for $150,000, thereby deferring taxes on $80,000 of gain. Taxpayer’s adjusted basis in Property B is $70,000 ($150,000 purchase price-$80,000 carryover gain=$70,000). Taxpayer now proposes to sell Property B for the same price as he purchased it for – i.e. $150,000. Although Taxpayer is not making a profit on this transaction, he will still have significant federal and state taxes of approximately $28,000 on his gain of $80,000. 3. Excess Borrowing If a taxpayer borrows against appreciated equity in their property, tax consequences can also result if the property thereafter declines in value and the taxpayer is forced to sell the property for little or no profit. Example: Taxpayer acquired property A for $1,000,000, paying $200,000 cash and borrowing $800,000. Taxpayer’s basis is $1,000,000. During Taxpayer’s ownership, the property appreciates in value to $1,400,000, enabling Taxpayer to refinance the existing loan of $800,000 with a new loan of $1,120,000. Taxpayer now sells, but since property values have declined, his selling price is $1,120,000. Although Taxpayer will receive no cash from the sale, he will still have taxable gain of $120,000 ($1,120,000-$1,000,000=$120,000), with combined federal and state taxes of $42,000. As illustrated by the foregoing examples, sales of property that yield little or no cash can still result in taxable gain. Before selling in a down market, taxpayers and their advisors should first determine the taxpayer’s basis in the property to be disposed of and thoroughly discuss upfront the potential tax consequences. Taxpayers can avoid any of the tax consequences noted in these examples by engaging in a IRC §1031 tax deferred exchange. For more information about IRC §1031 e x c h a n g e s , p l e a s e v i s i t www.orexco1031.com or call 800.738.1031. Julie Tumbaga, VP Hawaii Regional Manager 900 Fort Street Mall, Suite 1900 Honolulu, Hawaii 96813 (808) 524-6737 (877) 591-1031 Toll Free Jtumbaga@orexco1031.com www.orexco1031.com Jenni Lee | Account Executive | 808.430.3022 | JenniL@ortc.com Reta Chin-Chiarella | Business Development | 808.268.6554 | rchinchiarella@ortc.com MAUI BIG ISLAND Year to Date Median Sales Prices By Island As of April 2014 www.ortc.com Our Promise "We increase the value of real estate transactions for all participants by identifying, underwriting and managing each transaction with the highest standards of technical skill, client service and professional integrity" All information taken from Hawaii Information Services. MLS Sales Data information shown herein, while not guaranteed, is derived from sources deemed reliable. All information taken from the Realtors Association of Maui. MLS Sales Data information shown herein, while not guaranteed, is derived from sources deemed reliable.