How is the market? That’s a question that Realtors are asked frequently. I know I hear it when I am in Mana Foods, walking down the street, out socially and even when I am in the lineup surfing. The unofficial Maui Real Estate statistics are my place to provide market numbers and a little bit of context as to what they mean. In other words, they are my way of speaking to current market conditions. March is typically a busy month for real estate activity both in terms of properties going under contract and properties closing as this is Maui’s busy season for visitors and real estate. This March was no exception. Without further ado, here are the numbers followed by my thoughts on what it all means.
I counted 78 homes sold in March at a median price of $509,500. By comparison, there were 82 homes sold in March of 2012 at a median price of $435,000. That is a 5% drop in sales activity and a 17% increase in median prices when comparing this March to last March.
There have been 101 condo sales reported thus far for March of 2013 with a median sales price of $375,000. The March of 2012 numbers were 130 sales at a median price of $368,043. That is approximately a 22% drop in sales volume and a 2% bump in median prices when comparing this year and last year.
There have been 25 land sales reported for March of 2013 with a median price of $535,000. In March of 2012, 22 sales were reported at a median price of $467,500. That is a 13% bump in land sales volume and a 14% bump in median prices.
Here were some other interesting numbers that I came across while compiling the sales volumes and medians.
- The highest single family home sale was an oceanfront home on an acre of land in the Kuau area of Paia.
- The Paia sale was one of six closes over $2,000,000. Those included two sales in Wailea, two in Paia, one on Lanai and one in Kaanapali
- The high condo sales was $3,100,000 for a three bedroom/four bath unit at Wailea Point
- This was a good month for luxury condo activity with 11 sales over $1,500,000. Ka’anapali Ali’i saw the most high end activity with four sales over $1,500,000 during March.
- There were 13 bank owned (REO) closes last month. There were 40 bank owned sales during March 2012. That is a 68% drop in bank owned activity for this year.
- There were 19 short sale transactions that closed last month. There were 28 short sale transactions that closed in March of 2013. That is a 32% drop in activity for short sale closes.
- The 25 land closes was the second busiest month for land transactions in the last five years. The only month with more activity was December of 2012.
Last month’s numbers on the surface appear to be a mixed bag. General economic news has featured headlines proclaiming a strengthening real estate market. The general buzz on the street locally is that the Maui market is coming back. So why did we see the dip in activity in the home and condo market? The answer lies with the inventory. Plain and simple, there are buyers in many segments of the market who are having a tough time finding property. This is especially true when you look at properties for sale under Maui median prices. I looked at the number of homes that came on the market under $500,000 during the first quarter of 2013 compared to the first quarter of 2012. There was 40% less new inventory in the first quarter of this year. There was 56% less new inventory under $400,000. Looking at the condo market, there was 22% less new inventory under $300,000 in the first quarter of 2013 vs the first quarter of 2012. If you look at new inventory under $200,000 the decrease in inventory is more pronounced. You are looking at 45% less new inventory under $300,000.
Decreasing inventory is a factor in the increasing median prices as well. The effect is two fold. First, there are fewer lower priced properties on the market and consequently lower priced sales. With fewer lower end properties, the median sales price is going to be higher. Second, values are increasing modestly in many parts of the market. The rate of increase is varying widely based on the type of property, price range and geographic location. Lower priced condos are seeing the strongest increase in values. As you get to higher price points and greater inventory, the increases in value are more modest. At the highest price points in the market, values are flat with some segments potentially still decreasing
As I mentioned previously, land and luxury condos were two segments that stood out this month. The land market has been sputtering for the better part of six years on Maui. That being said, three of the last five months have seen more than twenty closings. While it is clear that we are not seeing a linear recovery in the Maui land market, the dynamics are in place for more months of better sales. Low housing inventory is drawing more buyers to look for alternatives in the vacant land market. The luxury condo market was relatively slow through much of 2012. Sales volume decreased at the high end while the overall condo market increased. While it was just one month of activity, it was encouraging to see a higher number of closes in the luxury condo market.
What does it all mean for buyers and sellers? Buyers looking at the lower and middle parts of the market will find a very competitive market place. Well priced properties can attract multiple offers and above asking offer prices. Buyers who require financing in this segment are advised to get pre-approved for their purchase prior to beginning their search. As you progress higher in the market, the breadth of inventory increases. Some parts of the luxury market have abundant inventory. That being said, don’t expect to find many distressed sellers in the luxury market. Sellers who have equity in their home, but have been waiting for market conditions to improve may find that now is a good time to enter the market. Strong buyer demand and limited inventory make for improved sales conditions. Sellers should be mindful though that not all parts of the market are behaving the same. You may contact The Maui Real Estate Team for a free consultation to discuss local market conditions and how your property might be received by buyers. We would welcome the opportunity.