Last year was a banner time for sales in the Kuau Bayview neighborhood of Paia. While the bulk of the Maui Real Estate market experienced a steady modest recovery in 2013, Kuau Bayview was exceptional in that it pushed up above the high prices established during the last real estate peak. There were six sales in the neighborhood with a record high sales for Kuau Bayview established in March and once again in August. Have we seen the same type of activity in the first six months of 2014? Have new record high prices been established? We give an update on what’s sold, what’s for sale, what we think is driving the current market dynamics, what we expect for the next six months and our expectations for Kuau Bayview over the long term.
View Kuau Bayview June 2014 Market update in a larger map
The map above shows all of the sales activity for Kuau Bayview over the last 18 months. The 2013 sales are represented by purple pins. The one and only sale in 2014 is represented by a red pin and the one active listing is represented by a green pin. It is worth noting that the active listing previously sold in May of 2013 for $750,000. If you run your cursor over the pins on the map, sales details will be provided.
Kuau Bayview has had a quiet first half of 2014. Inventory has been limited with just the two listings active all year. The Maui Real Estate Team represented the seller on the one transaction that closed this year. The lack of activity in the neighborhood is a reflection of inventory and not due to a lack of demand. We did more than our fair share of showings. While merely anecdotal evidence, the frequency and feedback of our showings suggested strong interest in the neighborhood.
The sales price of the one close this year also points to a less robust market. The lone sale this year closed at $644,500. There wasn’t a single sale in all of 2013 below $700,000. The one listing active is priced only 3.5% above its sales price last year, but it appears to be sitting. As of the last day of June, it has been on the market for 157 days. What is causing this lack of activity? Is the Kuau Bayview market declining in value?
A quick glance at the numbers would suggest some sort of decrease in value. As is often the case in the Maui market, statistics can be deceiving. While the homes in Kuau Bayview are fairly homogeneous, there are significant differences in value among the homes. View is a big driver of values in the neighborhood. Views in the area run the gamut from no view, to slight ocean view to big panoramic vistas of the North Shore. The high sales of last year fit the latter. The sale from this year had no ocean view. Another big factor for Kuau Bayview values is location within the subdivision. Specifically, proximity to Hana Highway can have a big impact on value. Hana Highway experiences high traffic volumes. The homes that border Hana Highway can have extensive road noise. The one home that sold this year was close to the road and had significant road noise. I can’t begin to tell you how many times we heard potential buyers say, “if only this house weren’t on Hana Highway”. The one active listing in the subdivision is also situated along Hana Highway. That is the biggest reason that it has had tepid market feedback.
It will be interesting to see what the second half of 2014 brings for the Kuau Bayview market. Supply is going to be the biggest factor for market dynamics. All the demand in the world doesn’t mean anything if there isn’t any supply. I thought we might see a new listing coming at 19 Hoe Place. This home went through the foreclosure process earlier this year. We just learned that it was listed on Auction.com where it went under contract with a bidder and is set to close in July. From what we are hearing, the sales price was pretty low for the neighborhood, but there were quite a few liens that needed to covered by the buyer. With the demand in place for the neighborhood, I venture that the bank left quite a bit of money on the table by not listing with a local agent to capture the full demand for properties in the neighborhood.
I would anticipate that demand will be high any new listings in Kuau Bayview that are well located within the subdivision. As mentioned before, we met our fair share of buyers this year who coveted the neighborhood, but were ultimately unable to get past their objection over the road noise at the two listed properties. While demand for good new inventory will be high, I am not convinced that we will see any new pricing records this year unless the listing is one of the premier homes in the neighborhood. Since the subdivision saw such strong appreciation in 2013, there may need to see a greater increase in value among some of the surrounding communities before we see additional upticks in Kuau Bayview values. When the prices in a neighborhood get too far out of line with surrounding communities, appreciation slows. That said, all it takes is one buyer. When the subdivision set their first record in March of 2013, there was considerable skepticism over the pricing of that property when it came on to the market.
In the long run, supply and demand favor price appreciation in Kuau Bayview. Demand for the Paia area continues to grow as the community gains additional exposure in the media. Last year the town made it on Sunset Magazine’s list of Top Ten Beach Towns. This year, Fodor’s called Paia one of the top small towns in America. This additional publicity has put Paia on the radar of more people who are considering relocating to Maui and more second home owners. While demand grows, supply remains constrained. There are currently only 4 homes in Paia actively listed for under $1,000,000. The limited supply should allow for continued price appreciation. Supply should remain limited over the long term. Paia remains hemmed in by cane fields, and A&B has yet to announce any immediate plans to convert any of that land to residential development. Infrastructure requirements and county approvals for any new development will result in a long runway before new construction could get off the ground. In the interim, Kuau Bayview will be an enticing option for Paia area buyers as it offers homes with ocean views, a short walk to downtown Paia via sidewalks and consistent pride of ownership.
If you are a Kuau Bayview owner who would like to get a better sense of your current home value, contact the Maui Real Estate Team for a free assessment of your property value. If you are a home buyer interested in the neighborhood, give us a call or send us an e-mail. We also have our eyes and ears open for both listed and unlisted properties that might be for sale in Kuau Bayview.
Since this post was published, there has been some more activity in Kuau Bayview and the overall Paia area. Within the neighborhood, 33 North Laelua came on the market for $749,000. This is a well remodeled home with 1,209 square feet of permitted living space. It is set off the road, but it has no views. If it were to sell at it’s current list price, it would be the second highest cost per square foot sale in the neighborhood. The only higher sale was the same residence back in 2006. It will be interesting to see where this one sells. Buyers seem to want to have views to pay a premium in the neighborhood. There have been five other homes that have come on the market in Paia town under $1,000,000. Two are under contract. This new inventory takes off some of the pressure for supply in the market. That said, we still think homes in Kuau Bayview with views would be well received.