Maui Real Estate Blog
March 2018 Paia Real Estate Market Update
As we approach the end of the first quarter, our Team wanted to provide an update on how some of the real estate markets around the island have been faring. The Maui Real Estate Team’s office is located in Paia on Maui’s North Shore. It only makes sense that it would be near the top of the list of communities for that we profile. This small beach town has been one of the stronger real estate markets on the island this cycle. With very limited growth in inventory over the last 15 years and a significant increase in demand, the recipe for price increases has been in place for some time. Spreckelsville is part of the Paia zip code and included within the Paia MLS area via the Realtor Association of Maui. We already did one market update focusing specifically on Sprecks. This update focuses more on Paia town itself and the neighborhoods of Kuau located to the east of Paia town.
The map above shows the geographic distribution of recent sales activity and current listings in Paia. Red pins show sales, yellow pins show properties that are currently under contract and green pins indicate active listings. You can click on the individual pins for more details on the properties.
Here are the notable sales numbers from the second half of 2017 and the first couple of months of 2018 in Paia town.
- There were 8 homes and one condo sold in the last half of 2018. There have been three homes sold thus far in 2018. There are an additional five homes under contract.
- Over the same period of 2016-2017, there were 14 homes sold and one condo sold. That is a 22% decrease in home sale volume.
- The Median price of the homes sold over the last 8 months is $747,000. The average sales price for the 11 homes that closed is $1,837,563. Over the period between July 1, 2016 and March 15th, 2017, the median price of homes sold was $590,000 and the average price was $840,000. That is a 25% and a 218% increase respectively. These charges aren’t solely a reflection of increases in value. They are also due to a higher number of more expensive sales and less inventory and activity at the lower price points in the market.
- The high sale over the last 8 months was $4,855,200 for an oceanfront home in Paia. This five bedroom, four and a half bath home with 3,809 square feet of living space is situated on a 15,882 square foot lot. This sale was notable in that it was the first luxury home auction in the Paia area.
- This was one of four sales in Paia that closed over $3,000,000. The other three closes were all ocean or beachfront properties.
- The lowest priced home sale was $521,000. This was for a three bedroom, two bath home with 1,508 square feet of living space on a 7,871 square foot lot on Baldwin Avenue.
- The one condo that closed at Kuau Plaza sold for $354,000. That is a new record sale for a one bedroom in that complex.
While the Paia area is pretty small, the housing stock can be diverse. The numbers above give the big picture. I wanted to take a little deeper dive by looking at some of the individual neighborhoods in the community.
Skill Village is a neighborhood located above the Paia Mill on Baldwin Avenue. It consists of mostly modest homes built in the mid to late 1980s. A lot of the homes priced in the entry point of the Paia market are located in Skill Village. It also tends to be one of the busier neighborhoods in Paia for sales activity. During the last half of 2017, the neighborhood bucked that trend. There were only two sales. The recent activity has also been happening at higher price points. The lowest priced sale in the neighborhood closed for $600,000. That was for a well maintained 3 bedroom, one bath home with 984 square feet of living space on a 6,164 square foot lot. The highest priced sale was actually the highest all time sale in the neighborhood. A home at 85 Palekana Street sold for $700,000. This four bedroom, two bath home has 1,576 square feet of living space. That record appears to be short lived with a larger, highly upgraded home located at 549 Kuanana listed for $849,000 currently under contract. Even if the sale price is well under asking, it is highly likely that this will be a new record. That house is somewhat anomalous from other current activity in the neighborhood.
After about a year or more of limited listings, we have seen neighborhood inventory increase since the start of the year. The property at 549 Kuanana is one of seven homes that are currently listed in the neighborhood. Four of the seven homes are under contract. The price points are also a little more accessible with four out of seven listings priced below $600,000.
Paia Halelani is a neighborhood that most don’t know by name. Located behind the Paia Community Center, most of the community’s modest homes were built in the early 1970s. The neighborhood has not seen a lot of activity lately with no sales in the last couple of years. Within the last month, the first two listings in some time came to market. Both homes are priced under $500,000, a relative rarity these days in the Paia market. That said, the bank owned property at 246 Kahiko is in such poor condition that they are not even allowing showings due to safety concerns. That means a cash buyer is the only possibility. The other home at 210 Kahiko also has considerable deferred maintenance and may also require cash to purchase. These two properties will not provide a great indication on neighborhood values when they close due to their poor condition.
Kuau Bayview is an Alexander and Baldwin subdivision built in the late 1990s. The subdivision has been one of the strongest neighborhoods in this market cycle. It was the first neighborhood on the island to set all time market highs after the last downturn. It has had relatively limited activity on the MLS during the last 8 months. The listing at 34 North Laelua is the only property listed on the MLS at this time. That home is currently under contract. There was one for sale by owner in the neighborhood that recently sold. I did a public records search and could not find the sales price as of yet. There is also one other For Sale by Owner which just came on the market.
This is more a property type or general location than neighborhood. The shoreline of Paia has seen a fair amount of real estate activity over the last 8 months with four closes. They are a fairly diverse set of properties. There was the aforementioned auction property. That plain and simple was a a luxury oceanfront home. The second highest sale was for a large Plantation Style home right on the oceanfront of Paia Bay. The home was filled with Old Hawaii Charm and fetched a price tag of $3,600,000. While the previous two sales were finished articles, the last two oceanfront sales were more upside purchases. The first was .64 acres on the beach at Paia Bay. There are two structures on the property including a 3 bed, 2 bath home with 2,260 square feet of living space and a 3 bedroom, 1 bath home with 960 square feet of living space. The zoning allows for the possibility for a third structure. The last sale included over an acre of oceanfront in the middle of Tavares Bay with a 1930s vintage Old Hawaii Style Home. The sea wall on the property began to fail while it was under contract. This led to a price reduction during the transaction. The new owner will need to address that issue. These two properties both closed for $3,300,000.
Unless, there is an influx of new listings, I would expect that we may see a slow down in activity for oceanfront homes in Paia. There are just three Paia oceanfront properties on the market at this time. One is priced well over the all time record sale for oceanfront homes in Paia outside of Spreckelsville. Another home is priced just below the record sale. The all time record sale was on more land, with bigger, newer and more upgraded homes. A buyer would really need to fall in love with the respective locations of those listings to pay close to the asking prices.
Paia Market Outlook for the rest of 2018
Paia has relatively limited inventory at this time. That is likely to be the biggest constraint to a lot of sales activity for the rest of the year. Another thing to watch is interest rates. While we have a little more inventory in Skill Village, lower priced properties may cool off a little if we see a significant rise in interest rates. I can’t foresee any real drastic shifts in the market unless we have some sort of larger global event that causes significant economic uncertainty. The fundamentals of Paia overall remain strong. It still has a fairly limited number of properties and the future development of homes will likely remain slow. Demand comes from both on island residents and a off island buyers. That should keep Paia as one of the more sought after real estate markets on the island.
The tight market can make for some challenges if you are a prospective Paia home buyer. With an office in the center of town and our ears constantly to the ground, we have a good sense of the inventory of both listed and unlisted properties. Sellers will find that the lack of inventory makes this a good time to come to market. Sellers still do need to put thought into their pricing. Even with limited inventory, overpriced properties can sit for a while under current market conditions. Contact The Maui Real Estate Team if you are planning on buying or selling property in Paia. We would welcome the chance to sit down and discuss your real estate needs. You can search the current inventory of Paia Real Estate Listings on MauiRealEstate.com.
Maui Real Estate Blog
Spreckelsville March 2018 Real Estate Market Update
Now that we already into our third month of 2018, we thought it was a good time to provide updates on some of our core markets. The first one we wanted to take on is the Spreckelsville Neighborhood on Maui’s North Shore. The neighborhood is home to our broker/owner Billy and agent Martin Lenny. Our office also has a home listed on the Maui Country Club golf course. Sprecks is never a high sales volume neighborhood, but it has seen strong demand and steady price increases over the last seven or eight years. Residents are attracted to the sense of community, convenience and access to great beaches and water sports. This post takes a look at market activity during the last six months of 2017 and the first two months of 2018.
The map above shows the location of properties that sold over the last eight months (red pins) as well as the current inventory (green pins). You can click on individual pins for more information on the respective properties.
There have been six sales since July 1, 2017 in Spreckelsville including 5 homes and one land sale. Here are some of the notable numbers from the sales.
- The high sale over the last eight months was $16,000,000 for an oceanfront residential condo on Stable Road. The large home included 2.882 acres of limited common element including 500 linear feet of beachfront.
- The same buyer bought an adjoining unit of the residential condominium for $5,999,999. That was a smaller 1,180 square foot home on .4381 acres of beachfront limited common element.
- In addition to the two residential condos, there was a third oceanfront home that sold. The three oceanfront sales last year were the most we have seen in the neighborhood since the four sales in 2014.
- The one transaction thus far for 2018 was a land sale. It was a bulk sale of three lots in the E Papae Ka Puko’ Ae subdivision. That subdivision is seeing some significant changes with three houses under construction currently and a fourth set to start construction soon. If all of the new owners of the recently sold lots plan to build in the near future, there will only be a handful of vacant lots remaining in Spreckelsville.
- The six sales were spread throughout Spreckeslville with two closings on Stable Road, the aforementioned E Papae Ka Puko’ Ae subdivision land sale, the sale in Old Sprecks on Laulea and two sales in the Sprecks V subdivision.
- Two of the six properties that sold in the last eight months were unlisted. All of the properties that closed in the first half of 2017 were unlisted. During this market cycle, Sprecks has become a neighborhood where a significant number of properties are sold before being listed.
I would anticipate that the rest of 2018 will see a relatively small number of sales in the neighborhood due to the constraints of limited inventory. I surmise that unlisted properties may continue to augment the current inventory to bolster sales numbers. The limited supply is also likely to provide upward pressure on neighborhood prices.
Contact The Maui Real Estate Team if you are interested in buying or selling property in Spreckelsville. We know the current inventory, and we have ears on the ground in the neighborhood looking out for unlisted opportunities. You can check out the current inventory of Spreckelsville Real Estate listings on our site. Stay tuned to this blog for other Spreckelsville neighborhood updates.
Maui Real Estate Blog
A Couple of Things to Watch in the 2018 Maui Real Estate Market
We are a few weeks into the New Year and the Maui Real Estate market appears to following similar dynamics to what we have experienced over the last couple of years. That is a continuation of price appreciation and relatively limited inventory. For the most part, it remains a seller’s market. That said, I think there will be a couple of things in particular to keep a close eye on this year.
This is something of a no brainer as the lack of affordable housing isn’t exactly something new on Maui. That said, I expect the conversation on affordability to heighten for a number of reasons. A considerable part of the local population is priced out of the housing market. With middle class wages relatively flat, a steady increase in prices and relatively slow pace of new construction, the situation is worsening. As of January 22nd, there were 502 homes listed as active on the island. Only 16 are priced below $500,000. That is a pretty shocking number. Buyers may find their buying power diminishing as the year progresses with the Federal Reserve expected to raise interest rates more this year. The increase in borrowing costs may push additional buyers out of the market who are already stretching to qualify for loans. Depending on how much rates increase, that could slow the rate of appreciation for property values at the entry levels of the market.
This is a big election year locally with a lot of state and county level offices being contested. I suspect that there will be considerable discussion of affordable housing in the race for the mayor and county council seats. Candidates will be challenged to come up with solutions that incentivize more affordable and work force housing while also addressing growing anti-growth sentiments. With high land costs, material costs and labor costs making new construction expensive, the solutions won’t be easy. Let’s hope that that there is some well thought out policy to address the issue rather than bad policy with good intentions.
The Impact of Tax Reform
The implications of the changes in the tax code on the Maui real estate market are not entirely clear. Anecdotally, it does not appear that many buyers have been deterred by the decreased real estate deductions in the new tax code. That said, a month of sales activity doesn’t give us a very complete picture. It may be the better part of a year or more before we know exactly how our market is impacted. New caps on mortgage interest deductions and the cap on deductions for state income and local property taxes have many economists thinking that higher priced real estate markets are likely to take a hit from the change in tax code. The thought is that the previous deductions were baked into pricing in higher priced real estate markets. Taking away from those deductions may cause prices to recalibrate due to the higher cost of ownership.
The change in tax code won’t just impact local buyers buying more expensive properties, it will also have an impact on second home buyers. If they have a larger mortgage already on their primary residence, they may not be able to write off any of the mortgage for their second home. Some of Maui’s biggest feeder markets for second home buyers come from the West Coast. Many of these buyers are more likely to see their net taxes go up due to changes in deductions on state and local property taxes. Will that be enough to deter some of them from purchasing the vacation rental condo on Maui that they were thinking about buying?
The one part of the market that may see a boost is the ultra luxury home market. The highest income earners were some of the biggest beneficiaries of the recent changes in the tax code. I could see sales of homes and condos priced $2,000,000 or above price range boosted if they deploy their additional wealth into discretionary purchases like a second home. With many of these properties being purchased as cash transactions, that will likely limit the impact of mortgage deductions.
I also expect that there could be a couple of indirect effects on the real estate market via the tax bill. We have already discussed the potential for increased interest rates this year. Some economists are suggesting that the tax cuts could lead towards inflation as an already strong economy overheats with additional stimulus. If the Federal Reserve sees too much inflationary pressure, the pace of interest rate increases could accelerate. The cut in corporate tax rates may also have an indirect impact on the market. A lot of economists expect that a good portion of the corporate tax savings will go into stock buy backs. The stock buy backs combined with a strong overall global economic picture have some economists projecting a continuation of the bull market that has been going on for the last nine years. Billy and I have long argued that there is a correlation between the stock market and second home buyers on Maui. The better the stock market does, the more likely people are to purchase a second home on the island. The strong stock market enables prospective to cash out on a portion of their earnings and make a discretionary purchase. The strength of the market may also just be enough to provide the psychological boost to make a large discretionary purchase like a second home.
As you can see, the dynamics of the local real estate market remain complicated. On a fundamental level, we have limited supply and a strong economy. The supply issues alone may be enough to keep prices going up. Affordability issues, the potential for increased borrowing costs, higher taxes for some buyers and decreased tax incentives could lead to an erosion of some of the demand we have seen. It is unclear how the push and pull of these dynamics will ultimately impact the market throughout 2018 and the years beyond. Contact The Maui Real Estate Team if you have questions about the market or if you are interested in buying or selling property on the island. We would welcome the chance to discuss market conditions and your real estate needs.
Maui Real Estate Blog
Spreckelsville Golf Course Home
Recently listed! This executive home is located in the highly desirable Spreckelsville Neighborhood on Maui’s North Shore. The large five bedroom, four and a half bath home has 4,536 square feet of living space including an attached mother in law quarters. The home is distinguished by its quality construction, materials and finishing. Flooring includes both solid oak and travertine. The kitchen design is superb. Materials and appliances include Snaidero cabinetry, Granite Counters, Subzero, Bosch and Thermador. The snaidero cabinets and granite are also used in bathrooms around the home. Other amenities include a net metered photovoltaic system that helps the environment and keeps utility bills low.
The home is situated right on the Fourth fairway of the Maui Country Club golf course. The sun room off the back of the home is a great spot for taking in the golf course views. There is also a courtyard area in the front of the home with lava rock pavers and beautiful landscaping. It is a great place to take in the Spreckelsville sunshine and trade winds.
This home is located within walking distance of Baby Beach, Sugar Cove and the Maui Country Club. These neighborhood amenities have made Spreckelsville a prized neighborhood to both residents and second home owners. It is also a short drive to the shops and restaurants of Paia, and it is located within ten minutes of a variety of stores and other conveniences throughout Central Maui.
This home is offered for $2,995,000. You can check out the 2409 Waipua listing page for additional photos and details. You can take a 3d tour of the property to appreciate its floor plan and finishes. Contact the Maui Real Estate Team to arrange a showing of the property or to discuss it with an agent.
Maui Real Estate Blog
Better than Beachfront?
Is 101C Kuau Beach Place better than a beachfront home?
You be the judge.
Similar to a beachfront property:
101C Kuau Beach Place has a beautiful unobstructed view.
101C Kuau Beach Place has easy beach access.
101C Kuau Beach Place is on over 1/2 acre of land.
Better than a beachfront property:
101C Kuau Beach Place has privacy!
101C Kuau Beach Place has multiple producing fruit trees.
101C Kuau Beach Place has less wear and tear from wind and salt.
101C Kuau Beach Place has no erosion.
You might also like the solar PV system that reduces the electric bills; the open living area and the short walk to Paia…
But best of all…it is half the price (or less) of comparable beachfront homes!
Now offered at a better price of $2,200,000
Better than beachfront? Come take a look and you be the judge…Contact The Maui Real Estate Team to arrange a showing. Check out the 101C Kuau Beach Place listing page for additional photos and details. If you are off island, take a 3d tour of the house for the next best thing to being at the property.
Maui Real Estate Blog
Hana Land Opportunity
This is an opportunity to own two side by side 6 acre lots in Hana. The agriculturally zoned lots are located on the North side of Hana town just a few minutes drive from the black sand beach of Waianapanapa State Park. The lot provides a number of different opportunities for potential buyers. The land was previously used for cattle ranching by the Hana Ranch. Parts of the land have become lightly forested since it was last grazed. There is good farming potential in the land. It could be re-fenced for a smaller number of livestock. Other nearby properties grow Cacao, a variety of citrus and other tropical fruits or tropical flowers. With an implemented farm plan, the zoning would allow for two primary homes and two 1,000 square foot cottages between the two lots.There are plenty of good building spots and there is potential for excellent views with a little bit of clearing. The number of potential homes could be conducive to a family compound or a property split among friends. A four unit CPR is another possibility.
The properties do not have water meters, but there is ample rainfall for water catchment. There is overhead electricity that runs through the property, or you could always go off grid to save on your electric bill and to lighten your impact on the planet.
Hana town offers an incredibly laid back lifestyle. It is secluded from the rest of the island. The natural scenery is stunning and there are great beaches and waterfall hikes. It is a great spot to get back to nature.
The two lots are offered together for the price of $655,000. Check out the 2401 Hana Highway Listing Page for additional photos and details. Contact The Maui Real Estate Team to discuss the property with the listing agent.