During the first half of 2010, I commented on this blog about the state of the Maui Luxury Market a few times. I cited anecdotal evidence of improvements in this market in March. This was followed by more quantitative evidence of increased activity in the luxury market that showed during the May and June real estate statistics. I thought I would provide a quick overview of the overall luxury sales numbers for the first six months of 2010, some numbers in specific communities, as well as a few thoughts on the overall luxury market.
There were 33 homes sold on Maui over $1,500,000 during the first six months of 2010. That includes 5 homes sold over $5,000,000. This compares to 19 homes sold over $1,500,000 in the first six months of 2009. Three of the 19 sales were over $5,000,000. This translates to a 74% increase in sales volume in 2010.
There were 87 condo sales over $1,500,000 during the first 6 months of the year. That compares to 77 sold during 2009. That is a 13% increase in sales volume comparing the first six months of the last two years.
I also looked at luxury home sale activity in some of Maui’s individual communities. There were some notable numbers when making year to year comparisons.
Of the resort areas, Wailea and Makena saw the greatest increase in activity. Lumping the two communities together, there were 12 homes sold in the first six months of 2010 compared to six in the first six months of 2009. Kapalua saw a modest increase with 4 sales in the first half of 2010 vs. 3 sales in the first half or 2009. Ka’anapali had three sales in the first half of 2009 and the same in the first half of 2010.
Outside the resorts, the Lahaina area saw the biggest bump in sales. Sales rose from 2 in the first half of 2009 to 7 in the first half of 2010. The majority of the Lahaina luxury sales activity occurred in the Launiopoko subdivision. Upcountry also saw a modest rise in sales going from 1 sale in the first half of 2009 to 3 sales in the first half of 2010. Other communities and areas of the island saw similar sales figures year to year.
There are some challenges when it comes to the presentation of luxury condo sales figures at the community level. I have frequently discussed the Honua Kai effect when reviewing monthly real estate statistics. Sales at this resort development and other new luxury developments have skewed the statistics over the last couple of years. Many of these closes are based on contracts written as many as three years prior. While it is telling that the buyers are following through on their contracts, the sales numbers are less of a reflection of current market demand.
New development sales in 2009 are part of the reason why the overall 2010 luxury condo sales numbers look a little less dramatic. The first half of 2009 was a particularly big year for new development sales with 51 closes at Honua Kai and an additional 4 long term contract closes at Ho’olei. In 2010, there were 43 long term contract new developer sales at Honua Kai. There were also 2 closes based on longer term contracts at the Residences at Kapalua Bay. While there were new developer closes at Ho’olei in 2010, those closes were based on contracts from this year. When you strip out the long term new developer contracts in both years and compare just the closes based on recent contracts, 2010 looks a lot stronger with 42 closes verses 22. That translates to a 91% increase year to year.
Three other numbers worth noting from the first six months of 2010 are $12,500,000.00, $19,850,000.00 and $17,500,000.00. The first number was the sales price for a condo at Wailea Beach Villas. It is the highest sales price for a condo in Maui history. The second and third numbers are the sales prices for two homes that bookend Paulauea Beach in Makena. They are the highest ever price paid and third highest price paid for a residence on Maui. These numbers have been met with a lot of hype. I would be careful to infer too much from the numbers other than the fact that it is clear that there are ultra wealthy buyers who will pay an absolute premium for some of Maui’s premiere properties.
It is clear based on the numbers above that we have seen improvements in the luxury market when compared to 2009. Volume of sales is up and buyers are willing to make some bold purchases. Improvements in the stock market and improvement in overall economic conditions helped to entice more luxury buyers. That being said, the first half of 2009 was the doldrums for the Maui Luxury market and the overall Maui real estate market. The sales pace is still behind what we saw for the first six months of 2008 and 2007.
It is difficult to say what the second half of 2010 will bring in the Maui luxury market. There is still some pretty good activity on the home front with 18 homes under contract over $1,500,000. Condos appear to have cooled a little with only 4 over $1,500,000 currently under contract. There is still a substantial volume of luxury inventory that needs to be absorbed. That would suggest that it is likely that there is additional room for price adjustments. Luxury sellers are going to have to take a close look at comparable inventory and their need to sell when pricing in this type of environment. Overall economic conditions and potential changes in tax policies could also be market drivers. Rest assured, The Maui Real Estate Team will continue to closely monitor the market. Please feel free to contact the Maui Real Estate Team for assistance buying or selling luxury properties on Maui.