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Paia Midyear 2017 Market Update

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Paia town is Maui’s bustling, bohemian surfer town. Situated on the North Shore of the island, the community has had an interesting history. Paia was once the island’s booming sugar town. A massive fire in town in the 30s led to a substantial decrease in population. In the 1950s, the community shrank again due to a decline in the sugar industry. The 1960s brought some new faces to town as hippies and the counter culture arrived on the North Shore of Maui. The 1980s brought another new wave of immigrants as the area became the premier windsurfing locations in the world. The 2000s saw Paia become renowned for other water sports including surfing, kite surfing and stand up paddling. Paia also started to pop up on various best beach town lists on a variety of magazines.

Paia town and Kuau from above

Paia Town from Above

Increased national and international exposure has resulted in heightened demand for local real estate. It is an increasingly popular location for relocation and second home ownership. All the while, there has been minimal housing inventory added to the town since the early 2000s. The immediate prospects for growth seem limited with no formal developments planned. Although the recent sales of 339 acres of former cane fields to the West of the town could lead to development at some point on the horizon.

Increased demand and limited supply have put a lot of pressure on Paia’s real estate prices. It was the first community on Maui to see all time high prices coming out of the last real estate downturn. We wanted to take a look at how the Paia market has fared through almost seven months of 2017.

Just one quick housekeeping note before we delve into the numbers. Traditionally, the Spreckelsville neighborhood is included in Paia sales numbers by the local real estate association. We did not include Spreckelsville in this post having already done a separate Sprecks market update last week.

The map above shows market activity for the year to date in 2017. The green pins represent current listings. Yellow pins represent properties that are under contract. Red pins represent sales. You can click on the individual pins for more sales information on the individual properties.

While the map gives a visual reference of where current Paia listings and recent sales are located, the numbers below provide a clearer overview of the recent market activity.

  • There have been 11 home sales for the year to date as of July 25, 2017. There are an additional seven homes under contract as of this time.
  • By comparison, there were 21 sales during the same period of 2016. That means the 2017 sales volume is down 48% compared to last year.
  • The median home price of the 11 sales is $700,000. The average sales price is $1,591,045. Over the same period last year, the median Paia sales price was $600,000. The average price over that time was $1,171,976. That is almost a 17% increase in median price and a 36% increase in average price when comparing this year to last year. While home sales were down across all price ranges, the biggest decrease in volume was at the low end. That is a big factor in the shifts in median and average price.
  • The high sales price to date for the year was $7,000,000 for an oceanfront estate on Tavares Bay. The subject property located at 22 Wa’a consists of a 3 bedroom, 6 bath home with 7,384 square feet of living space and a 2 bedroom, 1 bath cottage with 936 square feet of living space. It is located on a 1.285 acre lot.
  • There have been no condo sales or lots sold to date this year. Kuau Plaza, the one condo in this area, did not see any sales activity this year. Vacant land is scarce in Paia so this year’s goose egg for sale is not all that uncommon. Last year, there were two sales at Kuau Plaza and one oceanfront lot sold.

While the numbers above give a big picture view of the Paia market, I wanted to delve into a few specific neighborhoods around Paia.

Skill Village
Skill Village is a neighborhood of modest homes built largely in the 1980s. The neighborhood is located above the Paia Mill just a short walk from Paia Elementary School. Skill Village offers one of the lower entry points in to the Paia market. Over the last couple years, it has consistently been home to the lowest sale prices in the community. It has also seen pretty strong sales volumes. This year, sales volume has been limited with only two closes. There are an additional two homes under contract.

There are no active listings in SKill Village at this time. Additional sales activity will need to come from new listings. This is a microcosm of the greater Paia market with the lowest priced active listing priced at $884,000.

Kuau Bayview
Kuau Bayview has been one of the most in demand neighborhoods in all of Paia and arguably Maui. It was the first neighborhood on the island to see new record high prices coming out of the last downturn. Last year, the neighborhood saw another wave of new record sales prices. There were three sales during the first seven months of 2016. This year there has been a modest decline in activity with just two sales. Prices have not reached the heights that we saw last year, but the homes that have sold have been lesser in location, view and finishing than what sold the year prior.

Sales activity for the rest of the year will be dictated largely by inventory. There is only one active listing in the neighborhood at this time. There has been one additional home that has been on and off the market thus far this year.

Paia Oceanfront
Paia Oceanfront isn’t a true neighborhood per say. It is an area that stretches across multiple neighborhoods. It is a unique market unto itself due to its high price point. This year has seen two sales to date with an additional two oceanfront homes currently under contract. Last year, there were two oceanfront home sales and one oceanfront land sale that sold over the same time of the year.

The oceanfront market in Paia languished coming out of the downturn. There was a relative abundance of inventory and limited activity. The last two years have seen a change in conditions as activity picked up and the previously deep inventory started to be absorbed by the market. Some of that stems from overall market conditions, and some of that is based on sellers adjusting to the market. This year’s high sale of $7,000,000 came down from an original asking price of $10,500,000. The home had been on and off the market since 2010 and had been listed for as high as $15,500,000. Last year’s high sale of $6,000,000 came down from a previous asking price of $8,950,000. While both homes had huge sales prices, you could make an argument that the buyers were getting good value on their purchases.

It will be interesting to see if we continue to see additional Paia oceanfront properties go into contract this year. There are still six oceanfront listings so activity will not be constrained by inventory. The question is whether those homes are well positioned from a pricing stand point to attract buyers.

Overall Paia Market Outlook
What will the rest of 2017 bring for the Paia market? Looking at the current inventory and the number of properties under contract, I would imagine we will continue to see lower than usual sales volumes. As mentioned above, there are no properties for sale for less than $884,000 at this time. There is clearly demand for property at lower prices, there just isn’t any active inventory. We should continue to see appreciation in the market. Limited supply and strong demand will typically result in price increases. Those price increases will probably not be as dramatic as increases in median and average sales prices. The median prices and average prices should go up just based on the lack of lower priced inventory in the market.

Paia can be a challenging market for buyers. The limited inventory demands quick action when well priced properties come on the market. Finding the home for you could entail beating the bushes to find an unlisted property. With our office located in downtown Paia, we keep our eyes open and ears to the ground for opportunities. If you are considering selling in Paia, don’t let the market conditions fool you into thinking that the sky is the limit on pricing. Overpriced homes will sit even in Paia. With the heterogeneity of the Paia market, determining the right go to market price can offer its challenges. We would be happy to sit down with you to determine the market price and marketing strategy that will produce the best results. Contact The Maui Real Estate Team if you are considering buying or selling a property in the Paia area. You can check out the current Paia Real Estate inventory on MauiRealEstate.com.

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7/28/2017

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