Declining residential inventory, historically low interest rates and better consumer confidence improved real estate activity on Maui last month and generated increased home sales.

Sales of new and old single-family homes on Maui jumped nearly 26 percent last month as compared with November 2010, according to statistics released Friday by the Realtors Association of Maui. The median price of the 73 homes that changed hands remained flat at $450,000.

There were 74 new and old condominiums sold last month on Maui, representing a 12 percent increase over November 2010. The median price of the condominiums sold on Maui in November fell 25 percent to $261,750.

Maui’s real estate industry is coming back, as evidenced by strong interest from baby boomers, investors and buyers from Canada, said Howard Dinits, a Realtor with RE/MAX Maui.

"We’ll be in a stable market for at least the next four to six months," he said. "We are in our high season. It’s cold outside and people have jobs. The challenge will be matching buyers to the right property."

The inventory of Maui homes has declined 18 percent over the past 12 months, said Terry Tolman, the Realtors Association of Maui’s chief staff executive.

"Many short sales and (bank-owned) properties will need to be absorbed as sales before we can move ahead to a normal marketplace," Tolman said.

Still, there is plenty of demand for that cheap stuff as well as for properties in the $600,000-to-$800,000 sweet spot, Dinits said.

"We are done free-falling," he said. "However, real appreciation is only about 3 to 8 percent annually, and that’s where we are heading."