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Three Takeaways from the Maui Real Estate Market During the First Quarter of 2017

It has been a while since I have done an island wide stats post. After over ten years, I was struggling with rehashing the same format on a monthly basis. I decided to take a different approach this month. Rather than barraging you with lots of numbers, I wanted to try to distill the numbers into a few key takeaways. I also am gong to try to do this on a quarterly basis. With our smaller market, I think there is some merit to looking at slightly longer time horizons to overcome some of the variability we get on a month to month basis. Hopefully, those two changes will make for a better and more informative read. Without further ado, Here are my three key takeaways from the first quarter of 2017 followed by a some thoughts on what we may expect over the next few months.

1. Scarcity was the biggest driver of the Maui Real Estate market for the first three months of 2017. This was particularly true in the home market under $1,000,000. The lack of inventory in this price range has resulted in a lot of bidding wars and upward pressure on pricing. It also meant a decrease in sales volume as there just aren’t as many homes to sell. Buyers are out looking, but they are having a tough time getting into places. This is reflected in the stats with median prices up 15% compared to the first three months of 2016 and sales volume down 5%. The March median home price of $769,000 was the highest that we have since 2006. Again, this really hammers home the scarcity of listings at lower price points.

Scarcity is not a Maui specific phenomenon. It is happening throughout the United States. I was listening to Jill Schlesinger of CBS on Here and Now. She talked about the factors constraining the housing stock nationally. She cited a Baby Boomer generation that has not been quick to sell their homes at retirement. There are quite a few members of that generation who are choosing to modify their homes so they can age in place. Schlesinger also said that a lot of homes were acquired by private equity companies during the last downturn. They have kept those properties as rentals rather than putting them back on the market. I am not sure that the same factors are in play on Maui. For one, private equity firms were not buying property in big numbers on island. I think the biggest constraint we are seeing on Maui is a lack of new construction. New construction is not even coming close to keeping pace with population growth. It takes a longer period of time for new developments to get off the ground on Maui and many times they will fizzle out in between market cycles. We are also seeing a lot of new development occurring at higher price points in the market and less development occurring at the entry points of the market where demand is highest.

2. Luxury Real Estate Sales Trend up and Shift South. Luxury home sales were up in the first quarter of the year. There were 16 sales over the first 3 months of 2017 compared to 11 over the first 3 months of 2016.

Over the last couple of years, luxury home sales have been stronger in West Maui compared to South Maui. Launiupoko has led the charge with Kapalua and Kaanapali following close behind. There were eight sales in West Maui over $2,000,000 during the first 3 months of 2016. There was a a solitary sale in South Maui during that period. This year, there were four sales in West Maui over $2,000,000, and there were eight sales in South Maui over $2,000,000. Makena market activity was particularly notable with four sales over $9,000,000. It is hard to account for the shift in sales volumes between the different part of the island. Sometimes it just depends on the comparative quality of the inventory. Makena may also be seeing a bump due to the development of the Makena Golf and Beach Club. While none of the four sales in Makena were part of this development, this ultra high end development from Discovery Land Company may be drawing some affluent buyers to explore more immediate options for purchase outside of the new development.

There was also an uptick in luxury home sales outside the resort areas. There was a single sale in each of the communities of Hana, Haiku, Kula and Paia.. That compares to a single sale outside the resorts during the first three months of 2016.

The luxury condo market saw some similar trends. Sales were up overall. There were twenty-three sales over $1,500,000 during the first few months of this year compared to seventeen during the first three months of 2016. Twenty of the sales were in South Maui during 2017 compared to nine last year. Conversely, West Maui has seen a dip in activity with three closes compared to eight in 2016. Some of that can be attributed to a decrease in inventory in Honua Kai. All of the developer units have sold there which means we are now depending exclusively on resales.

3. Overall, the condo market had strong start during the first quarter of 2017. Condo sales do not seem quite as constrained by inventory when you look at the sales volume. Sales volume is up 17% compared to last year***. Almost all of that growth in activity can be traced back to the vacation rental condo market.

The vacation rental market had been in the doldrums for the previous couple of years. Much of that can be attributed to a decrease in demand from our neighbors North of the border. The Canadian Dollar has slumped after a number of years of parity. As a result, we saw relatively limited activity and a glut of inventory in some of the more popular vacation rental condos in the Kihei area. That appears to have shifted during this buyer’s season. Overall, sales of vacation rental condos were up 48% county wide. In Kihei, sales of vacation rental friendly condos were up 73%.

It is hard to attribute an exact reason for the sudden boom in the Kihei condo vacation rental condo market. While we may be seeing a few more Canadian buyers, the Canadian dollar remains far below the peak that prompted the last wave of Canadians. I surmise that there may be a number of factors at play. The concept of vacation rental ownership is being more ingrained into people’s psyche as companies like Airbnb become more prominent. A number of our domestic feeder markets are feeling their own real estate booms. West coast markets like Seattle, Portland and much of California continue to see strong activity. We also have seen a sustained bull run in the stock market that may provide people with the discretionary capital to make a second home purchase.

As with the luxury condo market, West Maui hasn’t seen quite the same level of activity for the general vacation rental condos. Numbers are down slightly in West Maui for condo sales. Again, Honua Kai plays a part in the lack of activity. This condo complex has been the driving force in West Maui condo sales in all price ranges since 2010. With the remaining inventory higher priced resale units, sales have slowed substantially at Honua Kai.

What can we expect over the next few months?
There is no immediate relief coming with the housing supply issues on Maui. On the demand side, island rents remain high and interest rates are still comparatively low. Barring a cataclysmic shift in the economy or a major upheaval in global politics, market conditions should remain similar to what we saw in the first quarter of the year. That means that competitive bidding will likely remain the norm for well priced homes in the $1,000,000 and under price range. You may even see a few bidding wars at well priced homes over $1,000,000. This can be a frustrating time for buyers as strong offers can still be trumped by irrational exuberance. That said, buyers should remain patient, make sure they have their ducks in a row when it comes to financing, be realistic about their financial picture and act decisively when properties that meet their needs come to market. While this is a seller’s market, there is some variability in demand by town and even neighborhoods on the island. Not everywhere is booming so sellers should consult closely with their Realtor and study recent sales to develop a realistic market price. Contact the Maui Real Estate Team if you are considering buying or selling property on Maui. We would welcome the opportunity to sit down with you face to face or to talk on the phone to discuss your real estate needs.

***Note the numbers reported for vacation rental condo sales are not 100% accurate. It is not a mandatory field in the Maui Multiple Listing Service to report whether or not a condo may be vacation rented. As a result, vacation rental condo sales can be under reported.


Hana Land Opportunity

This is an opportunity to own two side by side 6 acre lots in Hana. The agriculturally zoned lots are located on the North side of Hana town just a few minutes drive from the black sand beach of Waianapanapa State Park. The lot provides a number of different opportunities for potential buyers. The land was previously used for cattle ranching by the Hana Ranch. Parts of the land have become lightly forested since it was last grazed. There is good farming potential in the land. It could be re-fenced for a smaller number of livestock. Other nearby properties grow Cacao, a variety of citrus and other tropical fruits or tropical flowers. With an implemented farm plan, the zoning would allow for two primary homes and two 1,000 square foot cottages between the two lots.There are plenty of good building spots and there is potential for excellent views with a little bit of clearing. The number of potential homes could be conducive to a family compound or a property split among friends. A four unit CPR is another possibility.

An aerial shot looking towards the Hana coastline over the two lots listed in Hana

Looking to the South over the Hana lots

Looking to the North Over the two lots in Hana. The road to Hana is shown to the left side of the picture.

Aerial view of the Hana lots showing Haleakala views

The properties do not have water meters, but there is ample rainfall for water catchment. There is overhead electricity that runs through the property, or you could always go off grid to save on your electric bill and to lighten your impact on the planet.

Hana town offers an incredibly laid back lifestyle. It is secluded from the rest of the island. The natural scenery is stunning and there are great beaches and waterfall hikes. It is a great spot to get back to nature.

The two lots are offered together for the price of $655,000. Check out the 2401 Hana Highway Listing Page for additional photos and details. Contact The Maui Real Estate Team to discuss the property with the listing agent.

By » 4/22/2017 » in

Awalau Waterfall House

Yesterday, I posted about a home that would be a great fit for someone whose vision of Maui is focused on the beach. Today, I wanted to introduce you to a property that fits the ideal of tropical Maui. This Haiku home is situated on 3.43 acres. The land starts mostly flat up front and terraced in the back. The property is landscaped with over 30 coconut palms, hibiscus, torch ginger, and colorful Ti plants. If you are looking for edibles, there are tons of banana and passion fruit. Have you ever fantasized about drinking your own coffee? The terraced slopes of the property are covered with Arabica Coffee plants. The highlight of the property is a series of small waterfalls that gently cascade down the slopes of the property below the house.

hibiscus and ginger dot the landscape at the awalau waterfall house

one of the waterfalls at the awalau waterfall house

The two bedroom, two bathroom home is airy and expansive with large rooms and a soaring, vaulted, open beam ceilings. The great room has a fire place and panoramic views. There is also a large enclosed lanai with a separate entrance. The home has lots of covered parking and substantial storage areas for gardening equipment or beach toys. If you are off island and want to get a better sense of the house, the 3D tour of the home is the next best thing to seeing the home in person.
In addition to the main house, there is a one bedroom, one bath cottage with covered lanais.

the house and cottage at the awalau waterfall house surrounded by coconut palms

the living room and kitchen area at the Awalau Waterfall House

living room at the awalau waterfall house

awalau waterfall house kitchen

The Awalau Waterfall House is listed for $1,550,000. For more photos and information check out the 51 Awalau Road Listing Page. Contact The Maui Real Estate Team to arrange a showing or to discuss the property with the listing agent.

Kuau Beach House

When people move to Maui or buy a second home on island, many are seeking out a beach lifestyle. They want the surf, the sun and the sand and they want it close to home. Our new beach house listing in Kuau is a great home base if your vision of Maui is focused on the beach. Located on a quiet street with no through traffic, it is just a few minutes walk from the front door to the sand of Tavares Bay. Tavares is a great place to soak in the sun, go for a swim, or surf. The house is just a few minutes drive from world renowned Ho’okipa Beach Park and its great windsurfing, kiting and surfing. Paia town is walking distance from the home. There you will find good restaurants, one of the best little health food stores on the planet, boutiques galore and a variety of yoga studios.

Aerial view of 101 Kuau Beach Place with Tavares Bay in the Background

The three bedroom, two and a half bath home is very well designed. The focal point of the home is the large and open great room and kitchen area. Vaulted ceilings and a wall of sliding glass doors open up to the large lanai area. The sliders allow for good ocean views from throughout the room. This room is a great space for entertaining friends and family. On one side of the living room is the master suite area. You can check the surf on the outer reefs from bed. Just off the master is a nice nook that could be used as an office, reading room, nursery space or a yoga/meditation room. The other two bedrooms are on the opposite side of the home from the master. If you want to get a better sense of the floor plan and the interior, you can take a 3d tour of the house. It is the next best thing to seeing the home in person.

View from the lanai at Kuau Beach Place

101 Kuau Beach Place C has a large and open living and dining space. A wall of sliding glass doors offers lot o light and beautiful ocean views

Another shot of the great room living area showing a little more of the outside lanai

ocean views from the bedroom of 101 Kuau Beach Place

The home has a photovoltaic system and a solar hot water system. This limits the home’s environmental impact and your monthly electric bill has a lighter impact on your wallet.

The home has an oversized double car port and a detached one car garage with copious amounts of storage and a bathroom. There is also a 100 square foot storage shed with electricity. If your vision of the beach lifestyle includes lots of water toys, there is plenty of room for all your surfboards, stand up paddle boards, windsurfing gear, kitesurfing gear, fishing equipment, kayaks and canoes.

The half acre lot was lovingly landscaped with a variety of native plants, garden areas and fruit trees. Edibles include but are not limited to, Julia Mangoes, Avocados, citrus and Princess lilikoi. Nice rock work and two outdoor showers are other nice exterior features of the property.

The beach at Tavares Bay is a short walk from the home

Two turtles rest on the sands of Tavares Bay. It is just a few minutes walk from our listing at 101 Kuau Beach Place

This home is a residential condominium with its own separate water meter. The only shared element is the driveway. This property is offered for sale for $2,250,000. Check out the 101 Kuau Beach Place Unit C listing page for additional photos and details. Contact the Maui Real Estate Team to arrange a showing or to discuss the property with the listing agent.


By » 4/19/2017 » in

Paia 2016 Real Estate Market Year In Review

Paia town is home base for the Maui Real Estate Team. It also happens to be one of the more in demand real estate markets on island. A bohemian vibe, Plantation town charm, access to great water sports, galleries, good restaurants and shopping have made this little town internationally renowned. We want to take a look back at how the Paia market performed in 2016 and how it might perform in 2017.

One quick note, typically the Spreckelsville neighborhood is lumped in with Paia when people talk about Paia real estate. We believe Spreckelsville is somewhat unique within Paia and opted to exclude it from this overview. We did a separate Sprecks market update at the end of 2016.

The map above shows the 2016 sales as well as the one 2017 sale that was based on a contract from 2016. You can click on individual pins on the map for additional details on the sales.

Looking back at the year in sales, there were some notable numbers that I think are worth highlighting.

  • There were 31 homes sold in Paia and Kuau during 2016 with a median sales price of $600,000 and an average sales price of $1,119,216. In 2015, there were 26 home sales with a median price of $587,000 and an average price of $701,942. That is a 19% increase in volume, a 2% increase in median price and a 59% increase in average price.
  • The highest priced home sale was $6,000,000 for an oceanfront estate in Kuau. The property consists of a 4 bedroom, 4.5 bathroom home with 6,258 square feet of living space and a 1 bedroom, 1 bathroom cottage with 1,050 square feet of living space on approximately 1.283 acres of land. Last year, the high sale was $2,995,000 for a single family oceanfront home on Kuau Point.
  • This year’s high sale was one of three transactions to close for over $4,000,000 in Paia and Kuau during 2016. All three properties were oceanfront.
  • The lowest priced home sale was $455,000 for a 3 bedroom, one bath house with 1,104 square feet of living space on a 6,791 square foot lot. This home is located in the Skill Village Neighborhood. The 2015 low sale was $345,000 for a three bedroom, one bath home with 1,080 square feet of living space on a 6,599 square foot lot.
  • There were three condo sales in 2016 at Kuau Plaza. Kuau Plaza is the only condo in the Paia/Kuau area. The highest of the three sales closed for $325,000.
  • There was one land sale in Paia in 2016. This oceanfront .432 acre lot closed for $2,950,000. There were no land sales in Paia in 2015.
  • There were no bank owned properties or successful short sale transactions that closed in Paia during 2016.

While the numbers above give you a glimpse into market activity in Paia and Kuau as a whole, I also wanted to take a look at some of the individual areas and neighborhoods around Paia.

Kuau Bayview
Kuau Bayview has been one of the strongest performing neighborhoods on the island. It was setting all time high prices before any other neighborhood on the island during this market cycle. The neighborhood holds a lot of appeal to buyers due to location, walkability, consistent pride of ownership and in some cases views. Last year was another strong year for the neighborhood. Record sales prices were set not once but three times. The current record high of $952,000 pushes Kuau Bayview pretty close to the $1,000,000 threshold. In addition to the three high sales, there were two other smaller floor plan sales. The five total sales for 2016 was up sharply from the single sale in 2015. That said, it is worth noting that sales volume in this neighborhood tends to be more of a reflection of available supply instead of demand.

North Shore Village
North Shore Village was the last new development built in Paia. It is hard to believe that it was completed 14 years ago. There were only two sales in the neighborhood in 2016, but one was quite notable. 21 Hoku sold for $750,000. That is a new record high sale by a considerable margin. It sold for 13% more on a cost per square foot basis than the other sale in the neighborhood which only closed 4 months prior. On a cost per square foot basis, it was 19% higher than the previous neighborhood high sale. It will be interesting to see if that will be the new standard or if that sale is viewed as an outlier by future buyers.

Skill Village
Skill Village is another neighborhood that had a record high sale in 2016. A four bedroom, three bathroom home sold for $680,000 in September. It also remains the busiest neighborhood in Paia for sales volume. This was the second straight year with 9 transactions. While the recent high sales price may suggest otherwise, Skill Village provides the most opportunity for buyers who want to get into Paia for below the island’s median sales price for homes.

Oceanfront Paia
While Paia has seen a strong real estate market since the start of the recovery, Paia oceanfront has been slower. There has been a lot of inventory and relatively few sales. We saw a change in dynamics during 2016. After just one sale per year in 2014 and 2015, we saw four transactions in 2016. There were three oceanfront home sales and one land sale.

2017 Market Outlook
After a strong 2016, the big question is what should we expect during 2017 in the Paia Real Estate market. There are few things that I think will drive the market.

Inventory tops the list of market drivers. Island wide, we have seen home inventory shrink. Paia is seeing a more acute decrease in active listings than most other parts of the island. There are currently only 14 active home listings in Paia and Kuau. Three homes are currently under contract. Of the active listings, only five listings are priced less than $1,000,000. The one home priced for less than $500,000 is a short sale facing foreclosure. It also happens to have four additional liens on the property. The lack of available inventory makes it hard for me to imagine that we will come close to last year’s sales volume.

Low inventory and continued demand are a dynamic that is likely to provide continued upward price pressure in the Paia market. Interest rates are something that could prove to be a counterweight to the lack of inventory. Conventional wisdom suggests that we are going to continue to see increases in rates throughout the year. If that comes to fruition, I would suspect that might limit the increase in values particularly in the bottom of the half of the market. Entry level buyers face a tough barrier with current pricing in Paia. Increases in rates will make the cost of ownership that much higher.

We may also look at recent market history for a forecast of the future. Paia has seen significant appreciation since the last downturn, but appreciation has not been linear. If I were to chart values over the last four years, it would likely look like a stair case. Strong increases in value were followed by a pause in values as the market would seemingly catch its breath. Kuau Bayview is a good example of this dynamic. That neighborhood saw a series of record high sales in 2013. The next year and most of 2015 were pretty quiet due to a lack of inventory and sales. As mentioned above, 2015 saw the neighborhood high sales mark broken three times. If the pattern continues, we might see a quieter 2017.

One segment that will be interesting to watch is the oceanfront home market. This price range tends to be less interest rate sensitive due to the higher percentage of cash transactions. The last year was the strongest year since the downturn and one of the strongest overall historically for Paia and Kuau Oceanfront. Part of that stems from sellers adjusting to the market. The high sale for the year closed well below replacement cost. There is currently one oceanfront home under contract, and sellers have continued to adjust their pricing hoping to find the market. I would anticipate the oceanfront market might remain more active particularly if sellers continue to adjust prices.

Paia town and Kuau from above

The Future of Paia Real Estate
The strength of the Paia market over the last 15 years has been a simple case of supply and demand. Demand has only increased over the years as the town has become more and more renowned. Paia has made a couple of lists for the Best Beach Towns in America. Numerous other publications have cast the spotlight on Maui’s hip beach town. For each new article, there seemed to be more buyers of Paia real estate. All the while, supply has been practically unchanged since North Shore Village was built back in 2003. The town’s growth has been limited by the surrounding cane fields. The closing of the sugar plantation in December of 2016 may mean the end of that growth barrier.

There has already been one large parcel of land sold to the West of town. A 340 acre parcel directly to the West of Paia sold for $9,900,000 in January. The agriculturally zoned land is on the Mauka (Mountain) side of Hana Highway. The land runs from the town’s parking lot and mini bypass up towards the mill and heads West towards Baldwin Beach Park. Plans for the land have not been presented to the public. The coconut wireless has suggested 16 high end agricultural lots with the potential for mixed use development along Baldwin Avenue closer to the mill. I don’t anticipate that development will happen quickly. The subdivision process can be lengthy on Maui. If any rezoning is done, that could lead to additional delays.

While we are unlikely to see changes over the next couple of years, the cane fields may no longer serve as a limitation for growth. Some of this cane land will become ranch land. Still more areas could be sold off for future development.

Buying and Selling Paia Real Estate
You can see all of the Paia Area Real Estate Listings on MauiRealEstate.com. Our office is located in the heart of town in Paia Plaza at 71 Baldwin Avenue. Our agents live in the area and have decades of experience in this market. We watch the market closely and keep our ears to the ground for properties coming up for sale. Contact The Maui Real Estate if you are interested in buying or selling in Paia.


Well Priced Beachside Vacation Rental Condo in Maalaea

The Maui Real Estate Team has a great new listing at the Hono Kai condos in Maalaea. At the time of listing, this is the 2nd lowest priced, fee simple, vacation rentable condo in a beachfront complex on Maui. The low price does not mean you need to sacrifice quality. You won’t find popcorn ceilings and formica counter tops in this unit. The condo was remodeled with style and panache in 2009. Upgrades include granite counters, maple cabinets and stainless steel appliances in the kitchen. The bathroom has custom tiles. The flooring is Koa wood. This has been used as a second home by the current owners so it has seen very little wear and tear since it was remodeled. That said, it is well suited for VRBO or Air BnB.

Hono Kai is a boutique condo complex with 46 units on an acre of beachfront property. The beach side pool overlooks beautiful Maalaea Bay, Molokini and Kaho’olawe islands. It is located on the western most end of Sugar Beach. Sugar Beach stretches for over three miles to Kihei. It is the island’s longest beach for walking. Maalaea is a smaller community with a harbor that is used as a frequent launch point for whale watching and snorkel tours. It is also home to The Maui Ocean Center Aquarium and a handful of shops and restaurants.

Hono Kai B12 Living Room

Hono Kai B12 Living Room

The kitchen of Hono Kai B12

Hono Kai B12 Bathroom

Hono Kai B12 Lanai

The pool at Hono Kai

Hono Kai B-12 is offered for sale for $310,000. Check out the Hono Kai B-12 Listing page for more photos and details. Contact the Maui Real Estate Team to arrange a showing of this property or to discuss the property in more detail. If you are off island but interested, take a 3D tour of the condo.


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