Maui Real Estate Blog

Maui Real Estate Musings Volume XII

The latest edition of Maui Real Estate Musings is coming from the road. While I may be on the mainland, I still have an eye and ear on the Maui Real Estate Market. Volume XII addresses the elephant in the room from last week’s real estate news. As promised in Musings XI, there is also a review of end of May inventory numbers by district and price point. Finally, we take a quick look at the percentage of active home and condo inventory with price reductions. Without further ado, and so I can get back to hanging out with the in-laws, here is musings volume XII.

The Elephant in The Room

The elephant in the room of course is interest rates. Interest rates on the 30 year fixed mortgage spiked to over 6.2 percent last week. Stronger than expected inflation numbers for May and the resulting anticipation of sharper increases in the Federal Funds rate fueled a strong spike in mortgage rates. This is a significant difference in borrowing costs from interest rates below 3% a year ago.

Prior rate increases this year pushed some buyers out of the market. Needless to say, it is likely that this recent rate increase will further thin the pool of financed buyers. Those that do stay in the market, will be able to afford less home. It is possible that we see a brief uptick in activity in the market as buyers who locked in lower rates feel heightened urgency to purchase. Conversely, the shift in rates may cause a more immediate slow down in demand. We shall see how it plays out.

Of course, the smaller pool of buyers and less purchasing power from financed buyers will cause other impacts to the market. Lesser demand will likely lead to growing inventory. Keep in mind, we are still experiencing inventory numbers well below normal. How quickly and how much inventory grows is something of an unknown. The other thing we are likely to see is price reductions. A lot of sellers on the market initially entered the market at prices that assumed continued rapid appreciation. With less demand and less competition, many sellers will need to adjust expectations and pricing.

End of May Inventory Levels

The Realtors Association of Maui tracks end of month inventory levels island wide for homes and condos. We report on those numbers regularly. I took it a step further documenting inventory levels by district and price point on the island. The numbers are meant to serve as a baseline for future comparisons. It is a means to track changes in inventory among different market segments. That said, there is some interesting information to be gleaned from just the May numbers. They show some of the recent variability in inventory levels and market conditions based on both geography and price point.

End of May Home Inventory

ActivePending
Haiku1512
Hana53
Ka’anapali136
Kahului1124
Kapalua42
Kihei2725
Kula2412
Lahaina1515
Makawao1117
Napili/Kahana…125
Pukalani512
Sprecks/Paia124
Wailea85
Wailuku2832

End of May Home Inventory by Price Point

ActivePending
<$750,000622
$750,000-$999,9991954
$1,000,000-$1,499,9994337
$1,500,000-$1,999,9993027
$2,000,000-$3,000,0003714
$3,000,000-$4,999,9992411
$5,000,000-$9,999,999228
$10,000,000-$19,999,99992
$20,000,000+31

End of May Home Inventory Takeaways

  • Kahului has the lowest ratio of active listings to pending listings with 11 active listings compared to 24 pendings.
  • Kula and Paia have the highest ratio of active home listings to pending sales.
  • The ratio of pending sales to active sales is higher in districts with more lower priced options and less second home activity. There is stronger demand and more competition for lower priced primary residences.
  • The ratio of pending listings to active listings by price point corroborates the point above. The number of active listings is a small fraction of the pending listings below $1,000,000. There are no homes in the resort markets below $1,000,000.
  • With the exception of the $1,500,000 to $1,999,999 range, the higher you go in price point, the the ratio of active listings to pending sales increases.
  • While the resort communities have more active listings than pending sales, the inventory in these communities remains limited.
  • The same can be said for higher price points. With the exception of the highest price points, inventory is still well below normal in the $2,000,000 to $5,000,000 range.

End of May Condo Inventory by District

ActivePending
Ka’anapali2323
Kahului58
Kapalua715
Kihei3595
Lahaina148
Ma’alaea35
Napili/Kahana/Honokowai3439
Pukalani00
Wailea1691
Wailuku911

End of May Condo Inventory by Price Point

ActivePending
<$250,00059
$250,000-$499,9991223
$500,000-$749,9991855
$750,000-$999,9992954
$1,000,000-$1,499,9992349
$1,500,000-$1,999,9992134
$2,000,000-$2,999,9991940
$3,000,000-$4,999,9991222
$5,000,000-$9,999,99977
$10,000,000+30

End of May Condo Inventory Takeaways

  • First things first, there is an important thing to note in the pending condo numbers. They include 75 pending sales in La’i Loa at Wailea Hills. This development is under construction and the bulk of the contracts were signed in the second half of 2020 and the first quarter of 2021. These pending sales skew the numbers for Wailea and the price points between $1,500,000 and $4,999,999.
  • The Kihei Condo market numbers reflect its frenzied state over the last 12 months. This includes both vacation rental and non-vacation rental properties. Supply appears to be well below demand.
  • The price points between $500,000 and $1,500,000 have the highest ratio of pending sales to active listings.
  • The $5,000,000 to $9,000,000 range shows a lot less active inventory vs recent demand compared to the single family homes in this range.
  • Lahaina is notable as the only district with more active condo listings than pending listings.
  • Overall, the condo market inventory numbers reflect more scarcity and higher activity across the board than the home market.

A Few Final Thoughts on the Inventory Numbers

This data is lagging behind a few weeks at this point. I will be posting the numbers for the end of this month shortly after the first of July. I suspect we will see increases in inventory across a number of districts and price points. Another “flaw” to this analysis is that it lacks a baseline of comparison to historical numbers. Unfortunately, old Realtors Association of Maui statistics track monthly sales and not active inventory. I wish we had a “normal” number for districts and price points. I am going to need to rely on anecdotal observations as to what seems normal for active listings.

Price Reductions

I did want to look at one statistics that gives more of a current look at market conditions. Price reductions give us some sense of demand and how sellers are currently responding to shifts in demand. As of June 22nd, 32.4% of active home listings reduced their price. That is up from 29.5% on June 7th. It is still a little below May 24th when 33% of all active home listings reduced below listing price. For condos, 22.5% of the active inventory reduced their price as of June 22nd. That is up from June 7th and May 24th when 20.9% and 18.2% of the active inventory reduced prices respectively.

Some Maui Beauty To Brighten Your Day

This week’s beautiful Maui tweet comes with a bonus link to an article on South Maui Summer Activities.

Wrapping Things Up

It’s clear that market conditions are changing. A few quick final thoughts for sellers and buyers. Sellers, it is pretty clear the market is a lot different than it was 6 months or even 3 months ago. If your list prices were aspirational, price adjustments may be necessary to get in line with the market. Less competition means less leverage when it comes to negotiations. For buyers, the reverse is true and you may start to have an opportunity to negotiate. There is more opportunity for due diligence and there may be some more choice available to you. The trade off for financed buyers is more purchasing power.

With changing market conditions, quality representation remains as important as ever. Contact The Maui Real Estate Team to discuss your real estate needs. We look forward to being of assistance.

Pete Jalbert

Maui Real Estate Blog

Maui Market Musings Volume XI

Once again it’s time for another edition of Maui Market Musings. Your almost weekly source for the latest and greatest Maui Real Estate Statistics and market observations. The musings are also rumored to cure insomnia for those that have no interest in real estate. Although, we need to go through clinical trials before we can make that claim officially. This edition of the musings looks at notable numbers from the May stats and a few statistics that point towards current market conditions.

Notable Numbers from the May Maui Statistics

I looked through the latest statistics from the Realtor’s Association of Maui (RAM) and did a little number crunching of my own. The numbers below represent some of the more interesting items from the May Sales activity on Maui. They are just for the island of Maui. RAM’s stats include sales on Lanai and Molokai.

May Home Sales

  • Maui Realtors reported 93 home sales on Maui. That is down 20% from last year’s 116 sales.
  • While increased mortgage rates in March and April likely impacted sales, low inventory remains a factor too. The end of the month inventory of active home listings between February and April averaged about 15% below the same period of 2021.
  • While we may be seeing lower sales numbers, competition for the available inventory remained robust. Of the homes that sold, 35.48% sold for over asking price and 61.29% sold for asking price or above.
  • That is quite a bit stronger than last May when 25.86% sold for above asking price and 50.86% sold for asking price or higher. It is also higher than April when 32.35% sold for over asking price and 55.88% sold for asking price or above.
  • The median price of homes sold in May is $1,225,000. That is 20% higher than the May 2021 median home sale price.
  • The increase in median is a reflection of both price appreciation and a lack of inventory at lower price points. There were only 8 homes sold on island for less than $800,000 last month. The May prior, 37 homes sold for less than $800,000.
  • The average price of homes sold in May 2022 came out to $2,309,049. That is a 34% increase over last May’s median of $1,724,917.
  • Strong activity in the luxury home market drove the high average price. Two homes sold for over $20,000,000. Six total homes sold for more than $5,000,000. Twenty-seven homes sold for over $2,000,000.
  • The high sale for the month closed for $26,490,700. For that sum, the new owners acquired a home with 10,500 sf of living space, 8 beds, 8 baths, 3 kitchens, along with a separate pool house with room for guests, a six car garage and a caretaker’s quarters. The property is situated on an acre across the street from the ocean in Makena. This was the highest priced home to sell for the year to date.

May Condo Sales

  • Maui Realtors reported 144 condo sales in May. That is 39% lower than the 237 sold in May of 2021.
  • As with homes, increased mortgage rates may be tempering demand, but inventory is also impacting sales volume. The average number of active condo listings at the end of the month from February through April averaged about 56% less than the same period of 2021.
  • While demand may be lower, the limited supply continues to make for a competitive market. Of the condos sold, 31.94% sold for over asking price in May. An impressive 66.67% sold for asking or above.
  • That is a lot higher than the numbers from May 2021 when 15.28% sold for over asking price and 42.68% sold for asking price or above. The number of properties selling for above asking price in May 22 is down a little from April 22. That said, the percentage selling for asking price or above is higher.
  • The median price of condos sold in April is $747,000. That is 21.46% higher than last April’s median.
  • The average sales price for the condos sold in April came out to $1,136,318. This is 13.68% higher than the average price in April 2021.
  • Luxury condo transactions remain strong with one sale over $10,000,000, 3 over $5,000,000 and 22 sold for $1,500,000 or higher.
  • The highest price condo sale for the month closed for $11,900,000. That buyer now owns a 3 bedroom, 4 bathroom condo with 2,814 square feet of living space at the Andaz Residences Wailea.

Current Market Indicators

If you are long term reader of our stats post, you will know the familiar refrain that sales are a lagging indicator. We wanted to look at just a few stats that might give a better sense of current market conditions.

As noted repeatedly in the May sales stats, inventory, or lack thereof, remains a big driver in our market. On the last day of May, there were 213 active home listings in Maui County. That is a 7.5% increase from 198 listings at the end of April. On the last day of May, there were 175 active condo listings. That is just 1.7% above the 172 on the last day of April.

Nationally, the inventory of homes for sale rose 25% from April to May. Maui is clearly lagging behind the mainland when it comes to changes in inventory. That said, as noted in Market Musings X, any increase in inventory on Maui at this time of the year goes against pre-Covid trends. Inventory dropped on Maui between the last day of April and the last day of May in 2017, 2018 and 2019.

We also continue to track the number of properties going under contract within the first ten days of coming to market. Of the 55 homes and condos listed between May 18th-25th, 17 or 34.54% of the new listings went under contract within the first ten days of going on the market. That is a slight decline from the 35.55% between May 7th and 14th. It is down substantially from the 56% we reported in mid-February. For comparison to Pre-Covid days, 23.8% of listings that went to market between May 18th-May 25th, 2019 went under contract in the first ten days.

The one last metric we are trying to track is price reductions. The number of active home listings with price reductions is sitting at 29.5%. This is down from May 24th when 33% of active home listings reduced their price at least once. Of the active condo listings, 20.9% reduced their price one or more times. That is up from the 18.2% of active condo listings that reduced their price on May 24th.

A Couple of Thoughts on The Numbers

One number that stood out is the decrease in the number of price reductions among the active home listings . Prior to calculating the numbers, I expected to see an increase in price reductions for active home listings. Anecdotally, it seems like there are more price decreases. So why the lower number? Without doing a deep dig into the recent pending sales, I suspect that price reductions are proving to be effective. People overshooting the market initially are able to find the market via price adjustments.

Overall, the numbers above point to a market that while cooler than this winter, still remains resilient. The shifts in the market are gradual and not drastic. Inventory numbers well below normal combine with existing levels of demand to create conditions that are still more competitive than a “normal” Maui market.

While the numbers show some of the variability in the market between homes and condos, they don’t show the variability by geography and price point. On May 31st, I went through the end of the month inventory for homes and condos and broke it down by geography and price point. The purpose of the exercise wasn’t so much for this post but to create a baseline for future analysis trying to track potential shifts in inventory and demand at a district and price point level. That said, there is pretty clearly some variability evident. This post is getting a little long already so I will save my findings for the next edition of the Musings. The one immediate takeaway is that sellers will likely want to talk to their Realtor about conditions specific to their segment of the market when determining pricing and negotiation strategies.

The Obligatory Maui Photo Tweet to Brighten This Blog Post

Contact The Maui Real Estate Team

Contact the Maui Real Estate Team if you have any questions about this post or if you need assistance buying or selling Maui Real Estate. We look forward to hearing from you and discussing your real estate needs.

Pete Jalbert

Maui Real Estate Blog

2022/2023 Maui Property Tax Rates

On May 13, the Maui County Council approved new property tax rates for the upcoming fiscal year. There are a some particularly notable changes. The new rates decrease tax rates for owner occupied properties and apartments while significantly increasing rates on non owner occupied properties. Rates for the Short-Term Rental, Agricultural, Industrial and commercial classification also changed.

Another notable change for the coming fiscal year is the creation of a new long-term rental category. This is a lower tax rate category meant to incentivize more long term rentals. The county council created this classification last fall but this is the first fiscal year it will be in effect. Owners who qualify for this classification also get an exemption that reduces their assessed value by $200,000.

One last note, there was some modification to the tier system first implemented in the 2020/2021 fiscal year. For certain categories of property, this system created three different tiers of tax rates based on the assessed value of properties. The tier system was implemented for the homeowner, short-term rental and non-owner occupied classifications. The new long-term rental category is also part of the the tier system.

Previously, tier 1 was for properties assessed up to $800,000. Tier 1 is now for properties up to $1,000,000. Tier 2 was for places assessed between $800,001 to $1,500,000. The new tier 2 is $1,000,001 to $3,000,000 for owner occupied, short-term rental and long-term rental. The new tier 2 for non owner-occupied is $1,000,001 to $4,500,000. The old tier 3 was for properties assessed for more than $1,500,000. The new tier 3 is more than $3,000,000 for owner-occupied, short-term rental and long-term rental. The tier 3 for non owner occupied properties is more than $4,500,000.

2022/2023 Maui County Property Tax Rates

Here are the updated rates for this coming fiscal year. If there is any change in rates, last years rates are noted for reference. All rates shown below are per $1,000 of assessed value.

Owner Occupied

  • Tier 1: up to $1,000,000 Formerly $2.41 now $2.00
  • Tier 2: $1,000,001 to $3,000,000 Formerly $2.51 now $2.10
  • Tier 3: more than $3,000,000 Unchanged $2.71

Non Owner Occupied

  • Tier 1: up to $1,000,000 Formerly $5.45 now $5.85
  • Tier 2: $1,000,001 to $4,500,000 Formerly $6.05 now $8.00
  • Tier 3: more than $4,500,000 Formerly $8.00 now $12.50

Apartment

  • Formerly $5.55 now $3.50

Hotel and Resort

  • Unchanged $11.75

Timeshare

  • Unchanged $14.60

Short-Term Rental

  • Tier 1: up to $1,000,000 Formerly $11.11 now $11.85
  • Tier 2: $1,000,001 to $3,000,000 Formerly $11.15 now $11.85
  • Tier 3: more than $3,000,000 Formerly $11.20 now $11.85

Long-Term Rental

  • Tier 1: up to $1,000,000 New Class $3.00
  • Tier 2: $1,000,001 to $3,000,000 New Class $5.00
  • Tier 3: more than $3,000,000 New Class $8.00

Agricultural

  • Formerly $5.94 now $5.74

Conservation

  • Unchanged $6.43

Commercial

  • Formerly $6.29 now $6.05

Industrial

  • Formerly $7.20 now $7.05

Commercial Residential

  • Unchanged $4.50

About Maui Property Taxes

The new rates go into effect at the start of the new fiscal year on July 1st, 2022. Property taxes are due in two separate installments. The first installment is due in August 2022 with the second installment in February 2023. Owners should have received notification of their new assessed values in March of 2022.

Homeowner and Long Term Rental Exemptions

The deadline to file for the homeowner or long term rental exemptions and classifications passed. If you file by the end of 2022, you would be eligible for the exemption and tax rate for the 2023/24 fiscal year. Here is the link to the Long Term Rental Exemption and the Home Owner Exemption forms. The eligibility for the homeowner exemption can be confusing. It is worth reading the county Exemption FAQ to better understand eligibility requirements. Check out the county’s explanation for different property type classifications if there is any confusion on what category your current property or future property might fit into. Contact The Maui Real Estate Team for assistance buying or selling Maui property.

Pete Jalbert

Maui Real Estate Blog

The Oasis Spreckelsville

We are proud to bring the Oasis Spreckelsville to market. Every square inch of the property well conceived and intentional. Every fixture, material, appliance, furnishing and planting carefully curated. All elements of construction precision crafted. The home and detached garage with second story apartment are nestled amidst an assortment of water features and purposeful outdoor spaces. It makes the home well suited to either quiet contemplation or entertaining a group of friends or family.

Stunning any time of day, but the oasis really shines when the sun sets
The Oasis Spreckelsville Aglow at Night

The main home features two bedrooms with ensuite baths, a third bathroom, a formal dining area and an expansive kitchen/great room. The Italian designed Boffi Kitchen has beautiful marble countertops, Corian cabinetry and Gagneau appliances.

The stunning kitchen designed and manufactured by Italian Designer Boffe. It includes Corian Cabinetry. Marble counters and Gagneau Appliances
The elegant Boffe kitchen is a beautiful space
Looking from the kitchen towards the living room spaces
The kitchen overlooks the great room area

Baccarat Chandeliers punctuate the living and dining room areas.

Stunning Baccarat Chandeliers elevate the living and dining areas

Boffi sinks, fans and showers, Dornbracht fixtures and Flos lighting are among other design choices that complement the nearly flawless craftsmanship. Reclaimed, oiled teak floors, book matched marble counter tops and baths continue the theme of simple elegance.

One of the bedrooms in the Oasis Spreckelsville with the soaking tub located right outside
One of the the bedrooms with a 6 x 12 soaking tub visible just outside
Bathroom of the oasis
Flos Lighting, Book matched marble and a Boffe Shower make for a stunning bathroom

The Studio

The hidden kitchen in the guest studio

The well cultivated, detached studio apartment offers finish and fixtures equivalent to the main house and one of the coolest “hidden kitchens” around. It is a perfect guest space or even a fantastic home office.

Outdoor Spaces

The pools of the property offer beauty, tranquility and refreshment. The zero edge main pool is a natural entertainment space. The 64 foot lap pool is a lot more than just a work out space. It serves as a reflection pool for the lush landscaping and exterior artwork. The 6′ x 12′ garden soaking tub is a salve for the soul. A fourth water feature with fountains creates additional sensory pleasures. Multiple outdoor showers offer a place to rinse off when coming back from the beach.

The zero edge pool and outdoor kitchen at the Oasis
The Zero Edge Pool in the foreground with the barbecue area in the background.

Other outdoor highlights include a kitchen/barbecue area overlooking the main pool, a covered patio area that provides a rain or shine space to enjoy tradewinds, bird song and surrounding foliage. Extensive additional lanai areas make for good spaces for morning coffee or tea or an outdoor dinner party. The lush tropical landscaping thrives with surprisingly little maintenance. The landscaping combined with privacy fencing make you feel like you truly are in your own little oasis.

The lap pool of the oasis at twilight
The 64 foot lap pool

Contact The Maui Real Estate Team for More Information

The Oasis Spreckelsville listed turnkey for $9,800,000. Check out the Oasis listing page for additional photos and details. Watch for additional content on this property on our blog. A video is in the works and there are tons of stunning photos not featured on the MLS. Contact The Maui Real Estate Team for additional information or to set up a showing.

Pete Jalbert

Maui Real Estate Blog

Maui Market Musings Volume X

We made it to Volume 10! Our efforts to keep you abreast of the Maui Real Estate Market in these dynamic times continue. As usual, this is something of a grab bag hitting on a variety of topics. We look at some of the recent data points and outlooks for the National Real Estate market. This post also looks at some of the latest numbers regarding inventory, price reductions and the speed at which properties go pending on Maui. Finally, we provide some thoughts for sellers as the subtle shift in market dynamics continues.

A Smattering of National Real Estate Perspectives

We tend to be data geeks at the Maui Real Estate Team. That means we consume a steady diet of information on the local and national real estate market. With change in the air in the real estate market, the tweets, articles and opinions are coming fast and furious. This is a curation of some of the recent articles and tweets we read we thought were worth sharing.

  • Redfin came out with their latest look at the second home market a little over ten days ago. It’s worth reading past the headline. Demand for second homes in April is down substantially from its peak during the second half of 2020 and 2021. That said, it is still 9.8% above pre-Covid levels. When looking at articles talking about changes in the market, it is particularly helpful when Pre-Covid numbers are provided for context.
  • This is an interesting tweet on a paper highlighting the role of remote work in the role of price increases. This clearly impacted the local market as higher income buyers working remotely entered the Maui market.
  • New construction home sales are feeling the impact of rising interest rates across the country. Although John Burns points out in his tweet below that they are still above pre-pandemic levels. Locally, Maui has relatively limited new development occurring at this time. Hoku’ula in Hali’imaile is doing site work and taking reservations on market based housing. Anuhea at Kehalani is partially completed. Some phases are actively in construction with the next phase likely to come to market in late summer or fall. La’i Loa in Wailea is fully reserved with construction ongoing.
  • Inventory is increasing nationally. The 8% increase this week is substantial, but not unprecedented. Mike Simonsen’s whole thread is worth a read if you are on Twitter.
  • As dynamics in the market shift, the tendency is to look at past markets to find analogues to the current market. Bill McBride from the Calculated Risk Blog argues that we shouldn’t be looking at the last real estate bust for comparisons. He makes a pretty compelling case that the late 70s and early 80s is a more relevant comparison to the current market. Baby Boomer demand then is similar to Millennial demand now. The Federal Reserve found itself in a similar position due to inflationary pressure. While mortgage rates now are still well below rates from that point in time, the year over year change in rates is similar. Will we see similar pricing dynamics?
  • I wanted to include this last tweet from one of my favorite real estate follows on twitter to wrap this section up. It points to one of the values of keeping an eye on statistics. I’ve noted quite a few headlines that create a different impression of the market than what they underlying statistics show. Keeping a closer eye on and understanding the stats helps to strip out some of the hyperbole.

Recent Data Points From the Maui Market

The Maui market is influenced by trends in the national market, but it doesn’t necessarily follow in lockstep with national dynamics. The high volume of second home sales and being a literal island can create different market dynamics. Here are some of the latest numbers on local inventory, price reductions and pending sales.

Overall Inventory

As of May 24th, there are 198 active home listings on the Maui MLS. At the end of April, there were 176. That is a modest 12.5% increase in active home listings for the month to date. For a little perspective, it is worth taking a look at pre-Covid numbers. In the end of May in 2019, there were 445 active listings. We are still less than half of pre-Covid inventory.

Condo inventory remains particularly limited. As of the 24th, there are 160 active condo listings in Maui County. There were 158 at the end of April. Inventory gains for the month to date remain negligible. For further context, there were 487 active listings at the end of April 2019. We are at less than a 1/3 of 2019 inventory.

Clearly, we aren’t seeing the same type of inventory increase that the mainland market is seeing. That said, Maui traditionally doesn’t see the big inventory bump that the National market sees in the late spring. Inventory decreased from the end of April to the end of May in 2017, 2018 and 2019. This modest bump in inventory for homes and condos for the month to date goes against pre-Covid trends. The Maui market’s seasonality may be masking a shift on inventory.

Pending Sales on New Listings

We’ve looked at the percentage of homes going under contract within the first ten days of going to market in Musings II, Musings XIII and Musings IX. In mid February, 56% of new listings went under contract in 10 days or less. In early April, that number decreased to 46%. By mid-late April, the number was down to 43%. Of the 76 listings that came to market between May 7th and May 14th, 27 went under contract within 10 days. That calculates to 35.5%. To give a pre-covid reference point, 21.7% of new listings went under contract in 10 days or less for properties listed between May 7th-May 14th 2019.

Price Reductions

In our last edition of the musings, I started tracking price reductions on Maui. I looked at the percentage of active home and condo listings that reduced the price below their original asking price. On May 24th, 33% of active home listings reduced their price one or more times. That is actually down from May 5th when 37% of active home listings reduced their price one or more time. On May 24th, 18.2% of all active condo listings reduced their price one or more times. That is up from May 5th when 15% reduced their price one or more times.

Thoughts for Sellers

The good news is that by all metrics this is still a seller’s market. Inventory remains well below normal and there is still demand. That said, the dynamics now are not the same that they were six months ago or even three months ago. The “list the property, set a weekend open house schedule and offers due by Monday routine” is not quite the norm that it used to be. Here are some thoughts for prospective sellers entering the market.

Pricing

It’s been a forgiving market when it came to pricing a property over the last 14 plus months. In some cases, buyers set the pricing. Seemingly well priced properties would be inundated with offers and prices would soar well over asking. In other cases, sellers priced their property at levels that seemed really high based on recent comparable sales. They would still get their number. Sometimes, that would happen quickly and others it would just be a matter of the market catching up. That said, the margin for error on pricing appears to be shrinking. As market conditions become more variable, some of the more aggressive sellers are not getting the market feedback that they hoped for.

Sellers should work closely with their Realtor to look at both recent comparable sales and the level of activity in their segment of the market. There is a lot of heterogeneity in the market so pricing a home can be a challenge. If the market is not responding to your price, you may need to adjust pricing a little more quickly.

Negotiation

Price wasn’t the only area where sellers had a lot of leverage in this more recent market cycle. Sellers rebuffed requests for repairs, tightened timelines and sometimes negotiated post-closing occupancy without buyers batting an eye lash. A high number of back up offers only strengthened sellers hands. Buyers with FOMO (fear of missing out) conceded to seller demands far more often than not.

Anecdotally, I have heard stories of sellers overplaying their hand during negotiations in the current market. While sellers still have some leverage, more buyers are willing to walk away. Concessions, repairs and other negotiations are likely to become more commonplace if the market continues to adjust.

Days on Market

As the numbers above indicate, the number of homes going under contract right after listing is steadily decreasing. We are also seeing more price adjustments compared to earlier in the spring. That of course means that days on market is increasing. It may take a little longer to sell in this market. If your circumstances dictate that you need to sell sooner than later, adjusting to market feedback is important.

A Little Maui Beauty

Contact The Maui Real Estate Team

Contact The Maui Real Estate Team with questions, feedback or if you need assistance buying or selling property on Maui. We look forward to hearing from you.

Pete Jalbert

Maui Real Estate Blog

Walkable Maui

Rising gas prices. A more chaotic climate. Improved health and wellness. There are a lot of reasons why driving less has more appeal these days. Maui is a pretty rural place. As a result, it is not exactly an easy place to live car free. That said, there are parts of the island where there are more conveniences and amenities accessible by foot or by bike. We recently created a handful of Walkable community pages on MauiRealEstate.com that highlight areas within a higher concentration of amenities within walking distance. This is a quick overview of those new pages on the site and a few communities that are worth an honorable mention.

Featured Walkable Areas of Maui

  • Walkable Paia : For a small town, Paia has a lot going on. It has restaurants, a great grocery store, a Bank of Hawaii Branch, a yoga studio, massage studios, coffee shops, a post office, the beach and more all in and around town. If you live in the neighborhoods to the East and North of town, almost all of this is accessible via your own two feet. As an added bonus, the North Shore bike path runs to the West of town, through Spreckelsville and into Kahului. Paia is the one area of the island where you really could go for longer stretches without driving.
  • Walkable Wailuku : Downtown Wailuku is the seat of Maui County Government. It is also home to federal and state agencies, medical facilities, law offices and other professional services. The homes and condos in the downtown area give options to those who work downtown that want to avoid commuting by car. Add in restaurants, the Iao Theater, shops, a library and other amenities and there are plenty of things accessible by foot. While you will still find yourself driving to some amenities, your odometer is less likely to get a workout.
  • Walkable Makawao : Upcountry Maui may not be the first place you think of when it comes to walkability. That said, downtown Makawao is another small town with a lot going on. There are restaurants, a public library, Eddie Tam Park, a post office, shops, coffee, yoga and more. There are quite a few neighborhoods within walking distance of these attractions. Again, this is a place where it may be difficult to completely avoid car dependence, but you could get away with driving less when you live close to Makawao.
  • Walkable Lahaina : Front Street is a renowned tourist destination. That said, residents living in the neighborhoods close to Front Street are located close to restaurants, shops, grocery stores, the beach, surfing and more. Put on your walking shoes or grab your cruiser bike. This is an area where you can leave your car parked in the driveway more often than not.

Honorable Mention

The Kulamalu area of Pukalani wouldn’t have received a mention 10 years ago. While there was a Long’s Drugs and a Fitness Center, this was a convenient but car dependent community. Then came the Saturday’s Farmer’s Market, followed by Food Trucks. A new brewery and a great pizza place in the last year are two great new additions. The Cottages at Kulamalu and Kulamalu Hilltop are now two neighborhoods where owners now have some great amenities within walking distance.

There are parts of Kihei where you may not need a car as much depending on your lifestyle. Areas of South Kihei and Central Kihei offer restaurants, shops, grocery stores and beaches within walking distance.

Contact The Maui Real Estate Team

Contact The Maui Real Estate Team if you are looking for a home that decreases your car dependence. We would welcome the chance to help you find a home or condo that might help change your lifestyle.

Pete Jalbert