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Kapalua Market Report

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Kapalua is a beautiful resort community on the Northwest coastline of Maui. The resort boasts stunning natural beauty, renowned beaches, tropical foliage and two great golf courses. One of the courses is the site of the first PGA event of the year. The community is home to beautiful estate properties and luxury condominiums. We wanted to look at how the Kapalua market performed in 2012, how it has done in the first two months of 2013, and the outlook for the rest of the year.

This chart compares the real estate sales volumes for home, condos and land in Kapalua during 2011 and 2012

This chart compares the real estate sales volumes for home, condos and land in Kapalua during 2011 and 2012

There were six homes sold in Kapalua during 2012 with a median sales price of $2,880,000. The 2011 numbers were eleven sales with a median sales price of $2,850,000. That is a 45% drop in sales volume and a 1% increase in median values.

The condo market in Kapalua was more active in 2012 with fifty closes at a median sales price of $570,500. There were twenty-seven sales in 2011 with a median price of $830,000. That is a robust 85% increase in activity for 2012, while the median price dropped by 32%.

There were six land transactions in 2012 with a median sales price of $838,200. There were five land transactions in 2011 at a median sales price of $950,000. With sample sizes this small I am reticent to comment on changes in volume and median as they tend to be misconstrued.

Here are some other numbers that I found interesting about the 2012 Kapalua Real Estate Market.

  • The high sale for a home in Kapalua during 2012 was $5,998,000 for a 7,645 square foot home in Plantation Estates
  • All of the home sales in Kapalua were $2,000,000 or higher. Kapalua has the highest entry point of any community on Maui with the exception of Makena.
  • There were four homes sold in Plantation Estates. That was the busiest year of sales ever in Plantation Estates.
  • 197 Plantation Club Drive sold for $2,600,000. That was the lowest recorded sales price for a home in Plantation Estates.
  • The high condo sales price in 2012 was $3,425,000 for a three bedroom, four bath beachfront condo at Kapalua Ironwoods.
  • There were a total four condo sales over $1,500,000 in Kapalua in 2012.
  • Kapalua Golf Villas was the complex with the most activity. There were 25 closes at Golf Villas in 2012.
  • There were seven bank owned sales and five short sales that closed in Kapalua during 2012.

This was an interesting year for the Kapalua Real Estate market. The decrease in home sales follows a market trend we saw with luxury properties around the island. Sales of homes over $2,000,000 were down island wide including other resort markets like Wailea and Makena. For the sales that did close, value appeared to be a driving force among many of the sales. The six sales included the lowest priced sale in Plantation Estates and the second and third lowest sales prices for Plantation Estates. In addition to those three value closes, we also saw the second lowest sales price for a home on two acres or more in Kapalua up in Honolua Ridge.

The Kapalua condo market saw a sharp increase in activity. The focal point for the boost in activity was Kapalua Golf Villas. Last year was a year of transition for Golf Villas. It was discovered late in 2011 that the complex needed to undergo a big maintenance project. That resulted in a significant assessment for all of the owners. The assessment flushed a lot of motivated sellers on to the market. The market absorbed most of these listings in 2012 as buyers took advantage of good values in a complex that should have strong upside with all major maintenance issues in the process of being addressed. Kapalua Ridge was another complex that saw pretty good activity as buyers took advantage of a number of listings offered at good comparative values.

The Kapalua land market saw a very slight uptick in activity during 2012. That is in line with what we saw in general island wide. We did start to see a bigger uptick in land sales on other areas of the island late in 2012, but much of that activity came at lower price points where buyers were looking for alternatives due to a diminished inventory of homes. Kapalua still had a pretty healthy home inventory through much of 2012 as it does during the start of 2013.

What does 2013 have in store for the Kapalua Real Estate market? We have two months of sales / results for some perspective. On the home front, early market feedback shows that buyers are continuing to show a trend towards value purchases among the Kapalua Luxury home inventory. There has been one sale and there are two properties pending. The one sale was $1,795,000 for a home in Pineapple Hill. That is at the low end of pricing for Pineapple Hill historically. One of the pending sales is a short sale up in Honolua Ridge. Construction was abandoned on the home and the price reflects the work remaining to be completed.

In addition to the two properties currently under contract, there are an additional 32 homes actively listed in Kapalua ranging in price from $2,295,000 to $28,000,000. The depth of inventory makes for good selection for buyers. Typically, this type of inventory may create some motivated sellers. That being said, luxury home owners tend to have more staying power when it comes to waiting out the market.

It will be interesting to monitor the condo market in Kapalua during 2013. The initial market data appears to be positive with 10 sales and 4 pending sales to date. Of note, two of the sales and one of the pending were priced over $1,500,000. We are on pace to exceed the ultra luxury sales totals for 2012.

There are currently 60 condos active in Kapalua. The chart below shows the current number of active listings by complex and compares it to last year’s sales by complex.

This chart compares the current inventory of condos for sale in each of the Kapalua Condominium complexes as compared to the 2012 sales at the same complexes

This chart compares the current active listings of condos for sale in each of the Kapalua Condominium complexes as compared to the 2012 sales at the same complexes.

Looking at the chart above, you can see there are some complexes with a year or less of inventory and some condos that have an abundance of inventory based on last year’s absorption rates. Last year’s busy complex was Kapalua Golf Villas due to an abundance of motivated sellers. The motivated sellers have for the most part sold their properties, and we aren’t seeing the rock bottom prices that we saw just a year ago. I would surmise that Kapalua Golf Villas will see a little less activity as prices return to normal. At the other end of the market, Kapalua Bay Villas has the biggest inventory compared to recent sales. Typically, that type of inventory could result in a few motivated sellers coming to market. That being said, many of the Bay Villas sellers might have the means and inclination to wait until market conditions improve in their favor. Bay Villas will be a place to watch the rest of the year.

A condominium complex that might have the biggest impact on the Kapalua Market isn’t event listed in the chart above. I am speaking of the Residences at Kapalua Bay, formerly known as the Ritz Carlton Residences at Kapalua Bay. The Residences opened their doors in 2009. The developers spared no expense when they built the Residences. Finishing and materials are all top notch. Unfortunately, they had a tough time recouping their investment in a slumping real estate market. The property was foreclosed upon in June of 2012. A foreclosure auction was held in December with a winning bid of $55,000,000. On January 1, Timbers Resort took over management of the property for Ritz Cartlon. On February 1, 2013, a confirmation hearing was held for the foreclosure auction. Two other parties ended up bidding on the sale driving the price up to $100,000,000. The resulting sale should take up to two months to be completed. That means it is likely that at some point later this year, condos at the Residences at Kapalua Bay will be coming back on to the market.

The Residences at Kapalua Bay will have a significant impact on the ultra luxury market place in Kapalua. They will offer significant competition to sellers at places like Coconut Grove, The Ironwoods and other luxury condominium developments around the island. The full ownership condominiums at the Resort include both three and four bedroom floor plans with roughly 3,000-4,000 square feet of living space. The amenities and the physical plant of the Residences are second to none on island. It will be interesting to see how they are received by the market now that their financial future is well defined and market conditions have improved. Contact The Maui Real Estate Team if you are interested in being kept up to date on the latest developments regarding The Residences at Kapalua Bay.

What does this all mean for Kapalua Buyers and Sellers for the rest of 2013? Buyers should find that the Kapalua market has plenty of inventory to choose from throughout this year. The only place with a scarcity of inventory is at the entry level of the Kapalua Condo market. Kapalua condo buyers will find a lot fewer rock bottom price opportunities with fewer bank owned properties coming to market, and the situation at Kapalua Golf Villas stabilized. Sellers will find that there is a fair amount of competition in the marketplace. If they want to sell quickly, they will need to price well compared to the rest of the market. Contact The Maui Real Estate Team today with questions or for assistance buying Kapalua Properties. You can search the current active inventory of Kapalua Homes for Sale and Kapalua Condos for Sale on MauiRealEstate.com.


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3/11/2013

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