Maui Real Estate Blog

The End of the Minatoya List?

Last week, Richard Bissen, the Mayor of Maui, proposed legislation that could significantly impact the island’s condo market. The legislation targets condos on the Minatoya List. If passed, the legislation would sunset short-term rentals in these condominiums. This post provides greater details on the Minatoya List, the condos potentially impacted, and the additional steps necessary before the legislation is enacted.

What is the Minatoya List?

The Minatoya List is the list of apartment-zoned condominiums (A-1 and A-2) on Maui currently allowed to offer short-term rentals. To be on the list, an apartment-zoned condominium development needs to meet a series of criteria, the most significant of which is that the building or structure received a building permit, SMA use permit, or planned development approval prior to April 20th, 1989. The list is named after the county attorney who provided the legal opinion that condos meeting the series of criteria could legally be used for vacation rentals. The legal opinion was later codified under chapter 19.12.020 of the Maui County Code.

What Legislation is Being Proposed and Why?

The Hawaiian Islands have struggled with affordability issues for some time. It worsened with the significant appreciation in the market during the COVID-19 real estate boom. The fires in Lahaina on August 8, 2023, significantly exacerbated the problem on Maui. The local government has previously looked at the Minatoya condos as a potential relief valve for the housing shortage. As recently as 2022, there was a county council planning committee meeting to discuss prohibiting short-term rentals in the apartment district. That effort was abandoned after strong public testimony against the proposal.

Late last year and earlier this year, the Governor discussed a two-year ban on vacation rentals in West Maui in order to generate long-term rentals for displaced fire victims. He backed off those plans as more people made long-term rentals available to FEMA.

The state legislature took up Bill SB2919 earlier. The bill grants “the counties authority to regulate the time, place, manner, and duration in which uses of land and structures may take place.” It specifically mentioned the right to phase out short-term rentals. The bill passed in both the State House and Senate.

The day before the governor officially signed the bill, Mayor Richard Bissen announced his plan to introduce legislation that would “phase out and repeal decades-old transient vacation rentals (TVRs) operating in the Apartment District, also known as the Minatoya list TVRs.” The proposed sunset date for short-term rentals at Minatoya List condos in West Maui is July 1, 2025. The proposed sunset date for vacation rentals at Minatoya list condos throughout the rest of the island is January 1, 2026.

What Condos Would be Impacted?

The Minatoya List comprises 7,069 properties including 6,823 units on Maui and 246 on Molokai. Condos on the list are spread throughout Maui, with condos on the list located in West Maui, South Maui, the North Shore, and East Maui.

Kihei Condos on the List

Over 60% of the vacation rental condos in Kihei are on the Minatoya List. The table below lists the ten largest Kihei condo developments this legislation could impact.

Project NameNumber of Units
Kamaole Sands428
Maui Kamaole 316
Maui Vista280
Maui Sunset225
Hale Kamaole188
Pacific Shores 136
Kauhale Makai133
Kihei Bay Surf118
Luana Kai113
Kihei Garden Estates74
The ten largest Kihei Condo developments and the number of units in the development

Wailea Minatoya Condos

As with its neighbor to the north, the new legislation could impact the majority of the condos in Wailea that currently allow vacation rentals. All of the lowest-priced developments in Wailea are on the Minatoya List.

Project NameNumber of Units
Wailea Ekahi296
Grand Champions Villas188
The Palms at Wailea150
Wailea Ekolu148
All Wailea Minatoya Condo developments and the number of units in each complex.

Wailea has always been an expensive place to vacation and purchase a condo, but the remaining condo options with legal rentals will be particularly expensive. The remaining hotel/resort-zoned condos include Wailea Beach Villas, Ho’olei, and Wailea Elua.

Ma’alaea Condos on the Minatoya List

All of condos that vacation rent legally in Ma’alaea are Minatoya List condos. This new legislation would prohibit any short-term rentals in Ma’alaea after January 1, 2026.

Kapalua Condos on the List

Kapalua is another resort community where the proposed legislation could impact the majority of the vacation rental condos.

Project NameNumber of Units
Kapalua Golf Villas186
The Ridge161
Kapalua Bay Villas141
All Kapalua Condo Projects on the list and the number of units in the development.

Much like Wailea, Kapalua is an expensive place to own or visit. The three condos above are the three lowest-priced options in Kapalua. If this legislation is passed, the two hotel/resort condos that would allow short-term rentals are the Montage Residences and the Ritz Carlton Residences.

Condos Potentially Impacted in Napili

At this point, Napili is the one area where condos are unlikely to be affected by restrictions on short-term rentals in apartment zoning. The condos in this area are part of the Napili Bay Civil Improvement District. Short-term rentals are allowed in the NBCID.

Kahana Area Condos Impacted

The bulk of the condos in the Kahana area have Hotel zoning. There are a handful of Minatoya List condos. They include Kahana Reef, Kahana Outrigger and Kahana Village.

Honokowai Condos on the List

The Honokowai area would feel some of the strongest impact if short-term rentals were prohibited in apartment-zoned developments. There are 22 apartment-zoned condo developments that currently allow vacation rentals in Honokowai. Depending on where you draw the line between Ka’anapali and Honokowai, all of the short-term rental condos in Honokowai could be impacted.

Project PropertyNumber of Units
Paki Maui108
Hale Ono Loa67
The five largest Honokowai condo developments potentially impacted by the new legislation

Ka’anapali Minatoya Condos

Ka’anapali has three condo projects with apartment-zoning currently allowed to provide short-term rentals.

Project PropertyNumber of Units
Maui Ka’anapali Villas258
Maui Eldorado205
Ka’anapali Royal105
The condos in Ka’anapali on the Minatoya List and the total number of units in each development.

Lahaina Condos on the List

There are three condos in Lahaina that are apartment-zoned that could be impacted. Pu’unoa Beach Estates, Lahaina Roads, and The Spinnaker. The Spinnaker was destroyed in the August 8th fire.

North Shore and East Maui Condos on the List

Kuau Plaza, next to Mama’s Fish House, is on the Minatoya List. It has 30 units. Hana’s only condo development, Hana Kai, is apartment-zoned. This oceanfront condo development has 19 units.

The Full List

The condos listed in the sections above do not constitute the entire Minatoya List. These are just some of the largest and most notable condominiums. Clicking this link will take you to the full list of Minatoya Condos.

Next Steps in the Legislative Process

At this point, the Mayor’s legislation is proposed but still needs approval. The proposed bill will go before the planning commission next. After the planning commission comments, it will go in front of the planning committee of the Maui County Council. From the planning committee, it will go in front of the full county council. The council will, in turn, vote on the bill. Of course, there could be changes and amendments to the bill along the way.

If the bill passes, lawsuits are anticipated. As a former Judge, Mayor Bissen already stated he expects litigation. How long all of this will take to play out is unknown. The results of these efforts will have significant ramifications on the real estate market and the local economy. We will continue to provide updates on the process and its implications on The Maui Real Estate Blog.

Pete Jalbert

Maui Real Estate Blog

The Hester Prynne of Hawaii Real Estate

The scarlet letter of Hawaii Real Estate isn’t A. It’s the letters LH. Seeing the land tenure leasehold on a listing causes many buyers, and agents for that matter, to bypass a property. Just as the puritans wrongly ostracized Hester Prynne, leasehold properties don’t deserve to be shunned. For the right buyers, leasehold ownership provides a great opportunity. This is particularly the case in an era when inventory and options remain limited.

Lower Acquisition Costs

First and foremost, it’s worth highlighting the biggest advantage of leasehold. Acquisition cost. Leasehold properties cost significantly less than comparable fee simple properties. Plain and simple, you get more bang for your buck. Higher monthly fees are the tradeoff for lower acquisition costs. In addition to the maintenance fee, leasehold properties come with a monthly lease fee. If you have less cash in reserve for your purchase, but strong monthly income, leasehold could be an interesting option.

A Few Other Things To Consider With Leasehold

There are some other factors that can enhance the appeal of a leasehold property.

  • Does the property offer something unique? There are a handful of leasehold properties that offer something unique or at least less common in the Maui market. Alaeloa is a truly one of a kind development in the Napili area. The combination of low density, a beautiful shoreline and the mix of stand alone and duplexed beach cottages is unlike anything else on Maui. Maui Eldorado in Ka’anapali has its fantastic beach cabana. Kamaole Nalu is one of a handful of direct beachfront condos in South Kihei.
Alaeloa’s cottages, density and setting make it a unique offering within the Maui Real Estate market.
  • Does it have a longer lease term? A longer term lease is particularly appealing. It takes away uncertainty about the future of your property and it opens financing options. If it is in excess of 35 years, it allows for a conventional 30 year mortgage. More than twenty years left on a lease means you can get a fifteen year mortgages. You need five more years on the lease than the term of the mortgage to get financing. Once a lease term shrinks to less than 20 years, both the smaller pool of buyers and increased uncertainty may impact resale value.
  • Can it be converted to fee simple? In some cases, the lessor shows a willingness to convert the property to fee simple. That could enhance the condos value over the long term. The caveat here is that fee conversion costs money. In almost all cases, the financial outlay for lessees is significant. Typically, somewhere in the six figures significant.

Discover New Options

Again, leasehold isn’t for everyone and not all leasehold is the same. It requires some extra due diligence and there is a reason that leasehold properties come with their own unique disclosures. That said, there are some great leasehold properties on Maui and that list extends beyond the three developments referenced above. Don’t stigmatize a condo just because of its land tenure. Any condo on island whether its leasehold or fee simple is going to have its strengths and its weaknesses. If you evaluate the condo development on the plusses and minuses as a whole, you might just find leasehold fits your needs. We look forward to assisting you with the evaluation process.

Interested in Buying a Maui Condo?

Pete Jalbert

Maui Real Estate Blog

Alaeloa 41

Old Hawaii Charm Updated for Modern Living at Alaeloa 41

It was about 15 years ago give or take a year when I did my first showing at Alaeloa. The moment I stepped on the property, I knew it was special place. Charming cottages with shake roofs, a dramatic stretch of coastline and mature landscaping. I always wanted to sell a unit in this beautiful Napili development. I finally have the chance. Introducing Alaeloa #41.

Lanai Views from Alaeloa 41

Alaeloa 41 is a two bedroom, two bath unit with 1,347 square feet of living space. Originally built in 1965, its previous owners remodeled and updated it throughout the years making it well suited to modern living.

The kitchen areas is spacious with plenty of storage and an oversized island.

This condo features a spacious kitchen with granite counters, central island, and a Bosch oven, induction cook top and dishwasher. It has a good sized island with bar seating and plenty of cabinet space.

Sliders and large jalousie windows add plenty of light to the living room.

The kitchen opens to the living room. Large jalousie windows and a sliding glass door bring in abundant natural light. The slider opens to a covered lanai with big ocean and Molokai views.

The primary bedroom offers extensive closet space, big views and a light and bright sitting area.

The primary bedroom is spacious. Two large closets provide plenty of storage and room for your wardrobe. A previous owner enclosed a portion of the lanai area creating a sun drenched sitting area. Views from the sitting area include the Ocean, Molokai and even the North end of Lanai.

The bathroom off the primary bedroom includes a large cabinet with extensive storage, a walk in shower and granite counters.

The bathrooms feature walk in showers with beautiful stone work, built in cabinets with even more storage and granite counters on the vanities.

A floor to ceiling jalousie window opens up to show views of the tropical landscaping

The second bedroom is a good size. Wall to ceiling jalousie windows let in the trade wind breeze and offer soothing views of the tropical landscaping.

Other notable amenities include split system a/c units in the bedroom, travertine flooring throughout the home, Sapele Wood Doors and a great laundry room with plenty of storage and counter space.

With good sized rooms, a large kitchen and bedrooms, and abundant storage space, this is a condo that definitely lives like a home.

The exterior of Alaeloa 41. Notable features include a car port and an outdoor storage area .

Outdoor attributes include a one car carport and outdoor storage area.

An aerial view of Alaeloa and the dramatic coastline where it is situated.

More About Alaeloa

Alaeloa is a low-density condo complex situated in the picturesque Napili area. With only 42 units on just over 13 acres, this development offers incredibly low density. Enjoy the lush landscaping with soaring coconut palms, monkey pod trees, plumeria, and there’s even a mango grove! Most of the shoreline is elevated and rugged, but there is a small bay and a crescent shaped cobble stone beach. Take a dip in the heated saltwater pool located just above the beach, or entertain guests in the clubhouse equipped with showers, bathrooms, and a kitchen area. Store your kayak or paddleboard with ease, and enjoy peace of mind with gated access and an onsite manager.

Learn Even More About Alaeloa Unit 41

Alaeloa is offered for $1,700,000. Check out the MLS page for Alaeloa 41 for more photos and details. This is a leasehold condominium with the current lease running until 2059.

Interested in a Showing? Have Questions?

Pete Jalbert

Maui Real Estate Blog

Wailea Condo Market Snapshot January 2023

I wanted to take a quick look at the Wailea condo market now that we are a month into our “peak buyer season”. I spent some time looking at the current inventory and I was left with four observations and one question about the current market dynamics.

Wailea and Makena Condo Inventory

At the time of this post, there are 27 active condo listings in Wailea. While that’s a far cry from the half dozen active listings we saw briefly in early 2022, it’s still well below normal. There are four condo complexes in Wailea with no active listings. There are six condo developments with just 1 active listing at this time. None of the Makena condo developments have any active or pending listings.

The Highest Price Points have the Most Condos for Sale

The two condo developments with the most listings are Wailea Point and Wailea Beach Villas with 6 and 4 listings respectively. In addition to the condos at those two respective developments, there is also a top row Ho’olei and a rare Andaz listing. If you are shopping at higher price points, you have a lot more options to choose from.

Aerial View of Wailea Point
Wailea Point has the most inventory of any condo complex in Wailea Resort at this time.

Prices Remain High

The second half of 2022 saw prices decrease in a number of markets on the mainland. The situation on Maui is more nuanced. Small segments of the single family home market saw values decrease. Other segments held value or even increased in value. Wailea is one of those areas where values held or increased in the second half of 2022.

This is reflected by the current Wailea inventory. Seventeen of the twenty-seven active listings are seeking new record high sales prices for their development or at least their particular floor plan. That isn’t too much of a surprise considering the fact the values are at all time highs. That said, not all of the condos seeking record high prices have the location, view or the finishing to merit those lofty numbers.

Buyer Activity Is Low

Thus far, busy season is off to a slow start in Wailea. There are 5 condo resales under contract currently. Only 3 of the 5 went under contract since Christmas. This level of activity is well below the same period of time during the past two boom years. It is quite a bit less than recent pre-Covid years. In fact, this is the lowest number of Wailea condos to go under contract to start busy season since the winter of 2013/14.

Wailea is not the only spot on the island seeing a quieter busy season. While pending sales are increasing, they are still well below normal for this time of year. Looking at Kapalua, there are three pending sales with only one new pending since the start of busy season. Ka’anapali is the busiest of the resorts with only five pending.

While Wailea’s slow start is part of a broader trend, it may also be a reflection of some of the ambitious asking prices. Which brings us to my last question…

With low transaction volumes, it seems like something is going to have to give for us to see an increase in sales activity in Wailea. Will sellers reduce their prices? Will buyers bite the bullet? Or do we see a little bit of both?

On the sell side, the dynamics are interesting. We are seeing some price reductions, but in many instances the new asking prices are still above record highs. That tells us that the sellers truly missed the mark on their initial pricing. The sellers are also getting some mixed signals. The low transaction volume is a suggests prices should be reduced. On the other hand, inventory remains low, and there are still the occasional sales with eye popping prices. The question is whether sellers are trying to find the market or that elusive solitary buyer willing to pay a premium.

For buyers, the record high prices may be increasingly hard to swallow. That is especially the case for second home buyers coming from markets where decreases in value are common place. On the other hand, if you are seeking out a condo in one of the developments with little or no inventory you may be inclined to jump when something comes to market that checks all of the boxes. Further decreases in mortgage rates may also bring some buyers off the fence, but the impact of lower rates is not going to be as significant in the Wailea market. Keep in mind, 62% of all transactions were cash in Wailea and Makena last year.

Contact The Maui Real Estate Team

We will continue to monitor the Wailea Condo market as we progress further into buyer season. Stay tuned for more updates. You can see the active inventory of Wailea Condos for sale on Contact The Maui Real Estate Team with questions or for assistance buying or selling Wailea Condos. We look forward to being of service.

Are you looking for a new Maui home?
We want to help!

Pete Jalbert

Maui Real Estate Blog

Maui Real Estate Market Update Q2 2022 Vol. 1

This week’s market musings takes a look at one sign of resilience evident in the market and the latest Redfin report on the second home market. Without belaboring the intro, here are the latest market musings.

Anecdotal Signs of Market Resilience

Entry level condos in Kihei experienced some of the steepest declines during the last real estate crash. I remember the turning point for that market pretty well. During the Summer and fall of 2005, places like Southpointe, Kihei Villages and Keonekai Villages experienced rapid price increases. Condos in these complexes jumped in value 25% or more in a span of about 6 months. The rise in prices occurred during a period of low rates (for the time) with rates forecast to increase. Inventory during this period was low.

A pretty drastic shift occurred in the market in early 2006. A number of the buyers who purchased the condos in the second half of 2005 were pure speculators. They planned to make some very rudimentary improvements prior to flipping the condos. In some cases, they were just naked flips where they purchased the condo and flipped a few months later with no improvements made. By early 2006, the inventory ballooned from a handful of listings in entry level complexes to as many as 25 units in a single development. A rate increase between .5% and .6% caused demand to cool. Sellers who didn’t have the reserves had to adjust their prices. Thus started a precipitous decline that grew worse as a number of sellers found themselves underwater.

The contrast with present conditions is pretty significant. Recent mortgage rate increases are far more drastic. We are looking at an increase of 1.5% in the span of less than 6 months. That said, inventory levels remain low. At the time of this post, there are only 4 active listings in the “entry level” condo complexes in Kihei. Buyer demand continues for the limited inventory. Four non-vacation rental condos in Kihei went under contract within the last few weeks.

While market conditions may continue to shift depending on further rate increases and/or the overall economy, this segment of the market isn’t the house of cards that it was in the mid 2000s. There are fewer speculators and the financial position and loan terms of borrowers are stronger. The market conditions that caused the calamitous collapse in values just aren’t present currently. That’s why we continue to see buyers despite the significant rate increases and much higher prices.

The Second Home Market Slows Nationally

Recent data presented by Redfin indicates that second home demand hit its lowest point since May of 2020. While it is still up from pre-pandemic levels, the decrease in demand is notable. Redfin cites affordability as one factor in the decreased demand. Some of that stems from price increases and some from rate increases. The Federal Housing Financing Agency also announced an increase on upfront fees on second homes starting on April 1. The fee increase is between 1.125 percent and 3.875 percent, tiered by loan-to-value ratio. That’s a pretty hefty number for those borrowing substantial sums.

Will we start to see this reflected in the Maui market? I haven’t seen signs of a clear decrease in the second home market on Maui. Demand appears to remain strong with inventory limited. We also have a lot of cash in the market. Of the vacation rental condos that sold over the last month, 44% were cash transactions. That might be a low number as it doesn’t include 1031 exchange purchases using cash. The lack of inventory may also make it harder to detect changes in buyer demand. If we start to see anything that shows Maui reflecting national trends, we will report it in the Musings

A Little Bit of Maui Beauty to Brighten Your Day

A quick clip from Maui’s North Shore. If you are on twitter, @maui is worth a follow for more local eye candy, travel tips to the island and more.

Contact The Maui Real Estate Team

If you are reading some mixed messages in recent musings, that’s because information on market conditions remains pretty mixed. On the ground, buyers are still facing bidding wars and properties are still selling for premiums. That said, there are more headwinds brewing with the rise in rates. Current market conditions call for quality representation. Contact The Maui Real Estate Team if you are considering entering the Maui market as a buyer or seller.

Pete Jalbert

Maui Real Estate Blog

Sugar Cove Building 6, The Guest Suite

Last month, our broker Billy Jalbert and agent Martin Lenny listed a truly extraordinary property. This is the first time a whole building at Sugar Cove on Maui’s North Shore came to market. The owners combined two of the three units into a truly luxurious primary living space. The sellers opted to keep the third unit separate as its own guest living space. Today’s blog focuses specifically at the guest unit and its many amenities that make it a condo of distinction and luxury in its own right.

The living room in the guest suite
Looking into the living room of the guest area of Building 6. A dramatic staircase leads to the 4 upstairs bedrooms.

The guest suite or unit C offers four bedrooms. Two of the bedrooms include en suite baths, Two bedrooms share a bath. There is also half bath downstairs along with a laundry area, a writing / desk space in the living room and complete high-end kitchen.

Granite counters, custom cabinets and gourmet appliances in the kitchen.
Looking into the kitchen in the guest area of Sugar Cove Building 6.
Views from the kitchen of the guest area
The view from the kitchen. Not a bad place to chop vegetables for the family meal.

The kitchen includes Hans Grohe Fixtures, imported granite counters, custom maple cabinetry and gourmet appliances. The views from the kitcken over the living room aren’t too shabby either.

One of the ocean view bedrooms
Two of the four bedrooms in building 6 at Sugar Cove offer stunning ocean views.
Another ocean view bedroom
The other ocean view bedroom

Two of the four bedrooms offer stunning ocean views. The ocean view bedrooms also have ensuite bathrooms and access to the second story lanai. The two non-ocean view bedrooms are spacious and comfortable. They share a bathroom. Vaulted ceilings, recessed lighting and a bamboo ceiling treatment enhance the vibe of all four guest bedrooms. While there may be a few arguments about who gets the rooms with ocean views, even the most finicky of house guests will be hard pressed to complain about any of these bedrooms.

Bathroom views
Ocean views from a bathroom

The bathrooms include custom maple cabinets, imported granite and Hansgrohe fixtures.

Custom glass tile work in one of the bathrooms
Custom glass tile work in a shower in the guest space

The beautiful wood work throughout the home is apparent from the moment you walk up to the custom Koa front door. The flooring in the living room kitchen and bedrooms are Cumaru wood. As mentioned above, the custom cabinetry and shelves throughout the home are Cumaru and Maple. A stunning custom, hand made Cumaru staircase leads to the second floor. The lanai area decks are beautiful and durable Ipe.

Beautiful woodwork in the custom shelves leading to the office
Beautiful built in book shelves at the entry to the office are just a small sample of the custom and high quality wood work found throughout the unit.

In addition to the visually compelling features of the home, there are a number of features that keep guests comfortable throughout their stay.

  • Triple glazed low-E windows for storm integrity, soundproofing, and energy efficiency
  • Walls and attics insulated for comfort and energy efficiency
  • Central Air Upstairs keeps the bedrooms cool and comfortable
  • Programmable water recirculation systems for instant hot water
  • Energy efficient & programmable water heaters
  • Water filtration & RO systems
  • High speed wi-fi and smart-house systems throughout; Lutron lighting; Sonos audio
  • 2 large screen TVs

These are just some of the high quality upgrades made by the owners.

If guests enjoy ocean sports, there is plenty of space to keep all of their toys. There is storage for 18 surfboards & windsurfboards and 10 rigged windsurf sails. With the wind and waves of Sugar Cove right out the back door, there is ample opportunity for fun.

The whole building 6 of Sugar Cove is offered for sale for $17,000,000. Take a 3D tour of the guest quarters and the rest of the building here. Check out the Sugar Cove Building 6 listing page for additional photos and details. Contact The Maui Real Estate Team to discuss the property with one of our agents.

Pete Jalbert