Last year was a banner year for luxury sales in Maui. There were a number of eye popping closes including the highest sales price ever for a residential property on Maui. A spectacular oceanfront estate in Makena sold for $19,200,000. This year the luxury market has seen a little less fanfare. I noticed a handful of closes during the first few months of the year, but I was under the impression that the luxury market was not seeing the same level of activity as 2007. However, I noticed a pretty good number of high end closings just in the past week. This compelled me to delve into the stats and see where the Maui luxury real estate market really stands.
I broke down the luxury market into four segments and compared sales from the first 5 months of 2007 and the first five months of 2008. The results are as follows.
- Homes between 1,500,000 and $4,999,999
- Homes above $5,000,000
- Condos between $1,500,000 and $4,999,999
- Condos above $5,000,000
Sales between January 1, 2007 -> May 31, 2007 = 46
Sales between January 1, 2008 -> May 31, 2008 = 32
Sales between January 1, 2007 -> May 31, 2007 = 9
Sales between January 1, 2008 -> May 31, 2008 = 9
Sales between January 1, 2007 -> May 31, 2007 = 39
Sales between January 1, 2008 -> May 31, 2008 = 91
Sales between January 1, 2007 -> May 31, 2007 = 3
Sales between January 1, 2008 -> May 31, 2008 = 1
I can’t vouch that the 2008 numbers are 100% accurate. We may get a couple of sales that have yet to be updated in the MLS. That being said, they should be close enough to discern some trends. Overall, the numbers were pretty interesting to me. A few of them merited a little bit of additional digging to see if I could better understand the differences year to year.
The difference in condo sales in the $1,500,000 to $4,999,999 price range between 2007 and 2008 is the most intriguing of the four comparisons. There was an impressive 233% increase in volume of sales. This one merited some digging so that I could better understand this surprising increase. The answer became apparent pretty quickly when I looked at the inventory sold. There were 64 new project sales between Papali, Kai Malu and Ho’olei. This compares to 16 new project sales in 2007. When you strip out the new project sales numbers for both years, 2008 still looks pretty healthy with 26 resales vs. 24 resales in 2007. This segment of the market looks particularly strong when you consider overall condo sales are down 7% as of April.
In my discussion on the unofficial April 2008 real estate statistics, I surmised that the increase we have seen this year for Maui’s median condo prices may be driven more an increase in the number of high end condo sales than actual appreciation in value. I had originally based my argument on the fact that median increases were contradicting the price adjustments that I noticed in a number of condo complexes throughout the island. I was seeing like condos within the same complex selling for less in 2008 that what I saw in 2007. The high volume of high end condo sales appears to provide some quantitative evidence to back my explanation for the increase in Maui’s median condo prices.
The decrease in sales volume for homes between $1,500,000 and $4,999,999 parallels the overall decrease in volume of sales that we have seen for single family homes across the island. As per the April Realtors Association of Maui statistics, the volume of single family home sales is down 31%. I might have to break this segment down further on a future blog post to see if these trends hold up as you get more granular between $1,500,000 and $4,999,999.
Maui’s ultra luxury market has quietly remained resilient. As I mentioned before, we haven’t seen the headline grabbing closes of 2007, but the volume of single family homes sold remains the same. Condos are down a little, but two of the three closes in 2007 were in the Wailea Beach Villas. One was a new development sale and it is unclear if the second was a developer sale or a resale. It is also worth noting, that ultra luxury condo buyers may also be making reservations at some of the high end condo projects currently under development. There are condos available for reservation for $5,000,000 or more at Baccarat, the Ritz Carlton Kapalua, The Villas at Royal Lahaina, and Maluaka.
We will continue to keep tabs on Maui’s Luxury Real Estate Market on THE Maui Real Estate Blog. If you have any questions on Maui’s Luxury market or would like information on the current Maui Luxury Inventory, please don’t hesitate to contact us today.