During a recent vacation on the island of Maui, I became interested in how the recession had affected the real estate industry in a market that is dominated by second homes and investment property. The numbers are similar to what is happening on the mainland. The quantity of sales are down dramatically, the average sale prices are lower by some 20%, and properties languish on the market for in some cases over a year. That being the case, I decided to drop in on an open house and speak with a local realtor.
The house that attracted my attention is very similar in size and quality to my own home in rural Vanderburgh County. The price however is as the realtor put it a steal at only $8 million dollars. Now that is quite a difference in what such a house commands in my neighborhood. It must be that oceanfront thing and the perpetual great weather. I was intrigued. During the course of conversation, I learned that the home is owned by a dentist from Georgia who bought another home just across the bay so he could have a sunset view instead of the sunrise view that this home offers. The dentist’s total investment in the two homes now stands at a cool $20 million. I was beginning to think that I should have become a dentist instead of a CEO.
Dentistry is a profession that requires the highest levels of both education and dexterity, but $20M houses I learned through the Bureau of Labor & Statistics that a general dentist in Georgia earns a median wage of $171,280 and that in Indiana that figure is $158,080. I don’t understand why we pay less in Indiana than Georgia but who am I to argue with statistics. I further learned that by specialization, a dentist can earn as much as $315,000. This will enable one to have an extremely good lifestyle but not to own $20M in Maui real estate outright. The numbers just don’t add up.
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