It’s that time again. This post takes a look back at real estate activity in Maui during the month of October. It includes data on new inventory, new pending sales and closed transactions. We also look at end of the month inventory levels by price point and community. After digesting the numbers, I give a few thoughts on the market and specifically the impacts of the fire and high interest rates.

Before we get to the numbers, I am still working on a permanent title for what was formerly known as the Maui Market Musings. This month’s title is a particularly straight forward description. Consider it a milquetoast Maui market musings. Now, that’s some alliteration. On to the numbers…

October Market Activity

	October 2023	October 2022	October 2021	October 2020	October 2019	October 2018
Homes	77	81	97	103	137	127
Condos	97	92	183	181	169	176

New home listings for October are down about 5% compared to October of 2022. October 2023 new listings are down 44% and 39% respectively compared to October of 2019 and 2018.

New condo inventory is up 5% during the last month compared to October of 2022. It is still well below a “normal” October coming in 43% and 45% below October of 2019 and 2018 respectively.

	October 2023	October 2022	October 2021	October 2020	October 2019	October 2018
Homes	49	76	106	92	97	83
Condos	57	84	129	120	137	130

October of 2023 proved to be a quiet month for new pending home sales. Last month’s numbers came in 38% below October of 2022. They came in 49% below October of 2019 and 41% below October of 2018.

New Pending Condo sales fell 33% compared to October of 2022. The number of new pending condo sales came in 59% and 57% below October of 2019 and 2018 respectively.

	October 2023	October 2022	October 2021	October 2020	October 2019	October 2018
Homes	44	76	106	92	97	83
Condos	60	84	129	120	137	130

The 44 homes that sold in October of 2023 is 43% below last October. The number of sold homes is 55% below October of 2019 and 47% below October of 2018.

The number of condos sold this October came in 29% below last October. The 60 condos sold last month is 57% below October of 2019 and 54% below October of 2018.

End of October Maui Home Inventory

The charts below show active and pending home inventory by price points and community at the end of October. The end of September and the end of August numbers are provided for additional context.

	8/31/23		9/30/23		10/31/23
	Active	Pending	Active	Pending	Active	Pending
<750,000	5	10	10	9	12 (+2)	6 (-3)
$750,000-$999,999	17	21	18	13	22 (+4)	16 (+3)
$1,000,000-$1,499,999	34	45	40	38	44 (+4)	39 (+1)
$1,500,000-$1,999,999	21	18	28	12	29 (+1)	14 (+2)
$2,000,000-$2,999,999	25	13	31	9	35 (+4)	7 (-2)
$3,000,000-$4,999,999	24	8	26	7	26	7
$5,000,000-$9,999,999	29	8	31	4	31	4
$10,000,000-$19,999,999	14	0	11	0	11	0
$20,000,000+	4	0	4	0	4	0
Totals	173	123	199	92	214 (+15)	93 (+1)

	8/31/23		9/30/23		10/31/23
	Active	Pending	Active	Pending	Active	Pending
Haiku	17	7	20	10	24 (+4)	7 (-3)
Hana	12	0	12	1	11 (-1)	1
Ka’anapali	8	5	11	2	11	0 (-2)
Kahului	5	11	5	8	7 (+2)	6 (-2)
Kapalua	7	3	5	1	5	2 (+1)
Kihei	16	18	27	13	31 (+4)	11 (-2)
Kula	17	12	25	10	26 (+1)	8 (-2)
Lahaina	13	3	11	1	10	5 (+4)
Makawao	14	15	12	14	11	16 (+2)
Napili/Kahana/Hono…	5	4	8	1	10	3 (+2)
Pukalani	8	3	8	2	9	1 (-1)
Sprecks/Paia/Kuau	8	4	8	2	9	1 (-1)
Wailea	19	4	17	4	20	4
Wailuku	13	33	21	23	25	25 (+2)

Five Notable Things About the End of October Home Inventory

• Active inventory of homes for sale increased by 7.5% between the end of September and the end of August. The increase in inventory appears to be less from new listings and more from relatively low buyer activity. The number of pending home sales increased by just one between the end of September and the end of October.
• Looking at active home inventory by price point, all price points below $3,000,000 saw inventory increase. Active inventory was unchanged at all price points above $3,000,000.
• Pending home sales increased at three price points, decreased at two price points and remained unchanged at all price points over $3,000,000.
• Looking at active inventory by community, the vast majority of districts did not see any change in active listings. It increased in four communities. Kihei and Haiku saw the biggest increase. Active inventory decreased in just one community.
• The pending home sales by community proved to be more of a mixed bag. Pending sales decreased in seven communities. The number of pending home sales remained unchanged in two communities, and pending sales increased in four districts. It is notable that the Lahaina district saw the biggest increase in pending home sales with four. To be clear, all of those homes are located in areas outside the burn zone. The majority are in the Launiupoko neighborhood.

End of October Maui Condo Inventory

The charts below provide end of the month active and pending condo inventory by price point and district. It is worth noting that the Wailea continues to a see big bump in pending sales due to condo under contract in La’i Loa at Wailea Hills. The Lai’i Loa bump also impacts pending sales numbers in the $1,500,000 to $4,000,000 price range. That said, the bump is a little less pronounced as the development’s first nine sales recorded on the last two days of October.

	8/31/2023		9/30/23		10/31/2023
	Active	Pending	Active	Pending	Active	Pending
<$250,000	1	1	0	2	0	0 (-2)
$250,000-$499,999	16	5	14	11	13 (-1)	10 (-1)
$500,000-$749,999	29	35	32	24	35 (+3)	19 (-5)
$750,000-$999,999	25	24	40	10	51 (+11)	17 (+7)
$1,000,000-$1,499,999	29	16	37	12	44 (+7)	12
$1,500,000-$1,999,999	21	29	29	30	31 (+2)	25 (-5)
$2,000,000-$2,999,999	17	37	20	39	19 (-1)	33 (-6)
$3,000,000-$4,999,999	12	15	12	17	18 (+6)	15 (-2)
$5,000,000-$9,999,999	10	1	7	0	8 (+1)	0
$10,000,000+	3	0	1	0	3 (+2)	1 (+1)
Totals	163	163	192	145	222 (+30)	132 (-12)

	8/31/2023		9/30/2023		10/31/2023
	Active	Pending	Active	Pending	Active	Pending
Ka’anapali	22	7	34	9	40 (+6)	7 (-2)
Kahului	4	2	2	5	2	1 (-4)
Kapalua	14	0	11	1	12 (+1)	2 (+1)
Kihei	51	40	64	25	67 (+3)	27 (+2)
Lahaina	1	0	0	0	0	0
Ma’alaea	2	5	1	4	5 (+4)	1 (-3)
Napili/Kahana/Hono…	41	19	47	13	60 (+13)	16 (+3)
Wailea	20	81	26	79	30 (+4)	70 (-9)
Wailuku	8	9	7	9	5 (+2)	8 (-1)

Five Notable Things about the End of October Maui Condo Inventory

• Active condo inventory increased almost 16% between the last day of September and the last day of October. Pending condo sales fell just over 9% between the end of September and the end of October.
• Active condo inventory increased in all but three price points. Inventory decreased between $250,000 and $499,999 and the $2,000,000-$2,999,999 price range. There continues to be no inventory under $250,000.
• Pending condo sales decreased in all but four price points. The only increases in pending sales occurred between $750,000 and $999,999 and over $10,000,000. Pending sales remained unchanged between $1,000,000 and $1,499,999. There continue to be no condos under contract between $5,000,000 and $9,999,999.
• Looking at active condo inventory by district, almost all districts saw an increase in active listings between the last day of September and the last day of October. Ka’anapali and the Napili, Kahana and Honokowai area experienced the biggest increase. Kahului condo inventory remained unchanged. Lahaina also remained unchanged with no active listings. All condo complexes in Lahaina were impacted in some way by the August fire.
• Pending condo sales decreased in five districts between the last day of September and the last day of October. Wailea saw the biggest decrease with nine fewer pending sales. That matches the nine sales recorded at La’i Loa. Pending sales increased modestly in Kapalua, Kihei and Napili, Kahana and Honokowai.

Market Thoughts

Needless to say, it was a quiet month of October for the Maui Real Estate market. The market is feeling the combined effects of both the aftermath of the August fires and higher interest rates.

You can see the impact of the fires looking at the data for West Maui. Condo inventory in Ka’anapali is up 82% between the end of August and the end of October. I don’t have any good data on historical monthly condo inventory in Ka’anapali to compare current inventory to normal pre-Covid inventory. That said, the 40 condos listed at the end of October is the highest monthly total that I have for Ka’anapali since I started tracking the data in May of 2022. The previous high is 27 active listings in November of 2022.

The shift in active Ka’anapali Condo listings isn’t the only notable number from the end of October West Maui inventory.

• Napili, Kahana and Honokowai condo and home inventory is up 47% and 100% respectively since the end of August.
• Ka’anapali pending home sales went from 5 at the end of August down to 0 at the end of October.
• As mentioned above, the one outlier is the pending home sales in the Lahaina district. The numbers are up slightly from the end of August.
• Kapalua, the area on the West Side furthest from the Lahaina fire, hasn’t seen the inventory shifts that the rest of the West side is seeing.

It’s not a surprise that we are seeing an increase in active listings in Ka’anapali. The area was closed for tourism until November 8th. There are still a huge number of residents displaced by the fires living in the hotels. As primarily a second home market, fewer tourists mean fewer potential buyers. The question is whether this market continues to be impacted by its proximity to the fires even as more visitors return down the road.

The fire isn’t the only reason for slower market activity on island. Rates that hit as high as 8% in October deterred buyers. While rates have since come down from their recent peak, you can see the recent impact of high rates in the October closed transactions. A whopping 63.3% of the condos purchases and 50% of the home sales were cash. That is the highest percentage of cash transactions for either property type this year. This is a reflection of more financed buyers being priced out of the market.

One other sign of the impact of high interest rates is evident with something we aren’t seeing in the numbers. As mentioned in our last market update, we attended an event sponsored by the local Realtor’s association. One of the speakers was a broker from Paradise, California. She talked about the big increase in sales activities in communities close to Paradise within a couple of months of the fires. The surge stemmed from Paradise residents using insurance proceeds to buy new homes. As the numbers above show, we just aren’t seeing any big surge in pending sales.

While I know there are people on island who have purchased replacement properties with their insurance proceeds, many others don’t have enough to buy or at least buy what they want or need. The high interest rates are compounding the already high prices.

One last note, It still feels awkward writing about the fires and the impact on the real estate market in more abstract terms. There is a very real human component to our current market. In addition to the insurance challenges, many island residents continue to struggle to find long term rentals in the aftermath of the fire. If you are a Maui Property owner who has long term housing available, please sign up online at Maui Hale Match. If you are looking for other ways to help people impacted by the fires, check out our How to Help Maui post.

A Little Maui Beauty to Brighten This Post

It’s been a while since we posted one of our Maui market musings. In light of the fires on island in early August, market discussions felt inappropriate. The human impacts far outweighed discussion of inventory and sales volume. It’s been over two months now and feelings still remain raw on island. That said, housing is a huge part of this tragedy. The state of the market merits discussion for our clients.

You will also note that this post is not titled Maui Market Musings and some Roman Numeral. While that post title fulfilled my fondness for alliteration, the subject matter wasn’t super intuitive to the casual reader. We are still ruminating on a new title moving forward, but we are going with the basic October 2023 Maui Market Update for this version.

August and September Market Activity

	August 2023	August 2022	August 2021	August 2020	August 2019	August 2018
Homes	46	103	133	109	108	123
Condos	71	100	159	275	133	143

	September 2023	September 2022	September 2021	September 2020	September 2019	September 2018
Homes	92	82	130	131	122	107
Condos	98	74	144	180	174	117

Monthly new inventory for the year was well below last year prior to the fires on the island. That said, it dropped that much further in August. With the situation on the island, many potential sellers delayed the sale of their property or in some cases opted not to sell for the time being.

New listings in September picked up. While still below pre-Covid levels, September Home and Condo listings exceeded last year. That would seem to suggest that more sellers deferred their listings for a month rather than opting not to sell.

	August 2023	August 2022	August 2021	August 2020	August 2019	August 2018
Homes	47	27	14	48	23	34
Condos	41	19	18	54	18	19

	September 2023	September 2022	September 2021	September 2020	September 2019	September 2018
Homes	24	35	22	14	30	37
Condos	22	25	14	51	26	34

We don’t usually include cancellations in these numbers, but August wasn’t a usual month. Cancellations spiked for a variety of reasons. Homes and condos listed in Lahaina may have been destroyed or rendered inaccessible. Listings in West Maui and Kula cancelled due to limited access and circumstances. Some sellers pulled their homes off the market to house displaced families.

September cancellations came in relatively low. As the start of one of our shoulder seasons, it is typically a month with a relatively high number of cancelled listings. I imagine the lower cancellations may just be due to the fact that the base level of inventory is low. A few of the August cancellations may also have been planned for September only for sellers to accelerate their timelines in light of the situation.

	August 2023	August 2022	August 2021	Auguste 2020	August 2019	Auguest 2018
Homes	57	63	125	104	84	89
Condos	63	105	150	112	131	124

	September 2023	September 2022	September 2021	September 2020	September 2019	September 2018
Homes	43	66	108	110	84	64
Condos	48	84	136	123	131	114

August new pending home sales dipped modestly compared to August of 2022. On the other hand, Condo pending sales dipped substantially below the August 2022 numbers. September home and condo pendings both experienced substantial drops compared to both September of 2022 and Pre-Covid era Septembers. The September 2023 condo numbers are particularly striking coming in 54% and 63% lower than 2018 and 2019 respectively.

	August 2023	August 2022	August 2021	August 2020	August 2019	August 2018
Homes	57	82	120	92	97	98
Condos	97	104	187	111	119	149

	September 2023	September 2022	September 2021	September 2020	September 2019	September 2018
Homes	66	55	110	103	115	179
Condos	65	96	177	85	118	120

Sales are a lagging indicator of market activity. On the surface, that would suggest that August sales were less likely to be impacted by the fires in August. That said, there were a number of cancelled contracts in the aftermath of the fire. In some cases, those were properties directly impacted by the fire or just buyers who may have had a change of heart in light of the recent events. The August home sales ended up coming in substantially lower then August of 2022 and well below “normal” sales volumes in 2019 and 2018.

I was a little surprised to see September 2023 home sales outpaced September of 2022. That said, sales volume dipped in the fall of 2022 as rising rates weighed on the market. A look back at pre-Covid sales activity provides some additional context with this September’s volume well below 2018 and 2019. Condo sales came in well below any September over the last five years.

End of the September Maui Home Inventory

The charts below show the active and pending home inventory on the last day of September by price point and Community. The last days of July and August are also included to show general inventory trends.

	7/31/2023		8/31/2023		9/30/2023
	Active	Pending	Active	Pending	Active	Pending
<$750,000	4	11	5	10	10 (+5)	9 (-1)
$750,000-$999,999	23	21	17	21	18 (+1)	13 (-8)
$1,000,000-$1,499,999	45	44	34	45	40 (+6)	38 (-7)
$1,500,000-$1,999,999	32	14	21	18	28 (+7)	12 (-6)
$2,000,000-$3,000,000	35	10	25	13	31 (+6)	9 (-4)
$3,000,000-$4,999,999	37	9	24	8	26 (+2)	7 (-1)
$5,000,000-$9,999,999	38	5	29	8	31 (+2)	4 (-4)
$10,000,000-$19,999,999	16	0	14	0	11 (-3)	0
$20,000,000+	5	0	4	0	4	0
Total	235	114	173	123	199 (+16)	92 (-31)

	7/31/2023		8/31/2023		9/30/2023
	Active	Pending	Active	Pending	Active	Pending
Haiku	21	7	17	7	20 (+3)	10 (+3)
Hana	12	1	12	0	12	1 (+1)
Ka’anapali	11	5	8	5	11 (+3)	2 (-3)
Kahului	7	4	5	11	5	8 (-3)
Kapalua	10	2	7	3	5 (-2)	1 (-2)
Kihei	24	11	16	18	27 (+11)	13 (-5)
Kula	20	10	17	12	25 (+8)	10 (-2)
Lahaina	26	6	13	3	11 (-2)	1 (-2)
Makawao	21	10	14	15	12 (-2)	14 (-1)
Napili/Kahana/Hono…	14	3	5	4	8 (+3)	1 (-3)
Pukalani	7	4	8	3	8	2 (-1)
Sprecks/Paia	10	1	8	4	8	2 (-2)
Wailea	23	4	19	4	17 (-2)	4
Wailuku	16	43	13	33	21 (+8)	23 (-10)

Five Notable Things About The End of September Home Inventory

• Active inventory of homes for sale at the end of September rose by 15%. That comes after a big 26% plunge in active listings at the end of August. Pending sales dropped by 25% at the end of September after an 8% increase in pending sales at the end of August. After a drop in active listings in the immediate aftermath of the fires, listings are increasing now as some properties come back to market and decreased buyer activity as evidenced by the big decrease in pending sales.
• Looking at active inventory by price point, all price points except the very top of the market saw an increase in active listings. The only reason actives decreased at the high end of the market was cancellations. This is a time of the year when high end properties may withdraw for a month or two to refresh their days on market.
• Pending sales decreased at all price points except the very top of the market. The only reason high end pending sales didn’t decrease month to month is that you can’t decrease below zero.
• Shifting to active inventory by community, changes in listing were a lot more variable. Active listings increased in six communities, decreased in four communities and remain unchanged in four communities. Kihei, Wailuku and Kula experienced the biggest increase in active listings.
• Looking at pending sales by community, the decrease in pending sales is almost island wide. Hana had one new pending sale and Wailea pending sales remained unchanged.

End of September Maui Condo Inventory

	7/31/2023		8/31/2023		9/30/2023
	Active	Pending	Active	Pending	Active	Pending
<250,000	0	2	1	1	0 (-1)	2 (+1)
$250,000-$499,999	16	14	16	5	14 (-2)	11 (+6)
$500,000-$749,999	41	39	29	35	32 (+3)	24 (-9)
$750,000-$999,999	32	28	25	24	40 (+15)	10 (-14)
$1,000,000-$1,499,999	34	18	29	16	37 (+8)	12 (-4)
$1,500,000-$1,999,999	26	36	21	29	29 (+8)	30 (+1)
$2,000,000-$2,999,999	18	40	17	37	20 (+3)	39 (+2)
$3,000,000-$4,999,999	12	18	12	15	12	17 (+2)
$5,000,000-$9,999,999	11	2	10	1	7 (-3)	0 (-1)
$10,000,000+	3	0	3	0	1 (-2)	0
Totals	193	197	163	163	192 (+29)	145 (-18)

	7/31/2023		8/31/2023		9/30/2023
	Active	Pending	Active	Pending	Active	Pending
Ka’anapali	20	9	22	7	34 (+12)	9 (+2)
Kahului	3	3	4	2	2 (-2)	5 (+3)
Kapalua	16	3	14	0	11 (-3)	1 (+1)
Kihei	62	51	51	40	64 (+13)	25 (-15)
Lahaina	13	4	1	0	0 (-1)	0
Ma’alaea	4	7	2	5	1 (-1)	4 (-1)
Napili/Kahana/Hono	43	29	41	19	47 (+6)	13 (-6)
Wailea	23	87	20	81	26 (+6)	79 (-2)
Wailuku	9	4	8	9	7 (-1)	9

Five Notable Things about the End of September Condo Inventory

The charts below provide end of the month active and pending condo inventory by price point and district. It is worth noting that the Wailea pending sales receive a boost from 75 new developer units under contract in La’i Loa at Wailea Hills. As of the end of September, they constitute over 50% of the pending condo sales. These properties went under contract between 2020 and the the first quarter of 2021. Priced from just under $1,500,000 all the way up to over $4,000,000, these long term contracts are also skewing the pending sales upwards in this price range. We should start seeing the very first La’i Loa sales at the end of October.

• The active inventory of condos on the island at the end of September increased 18% over the last day of August. The number of pending sales on the island at the end of September decreased 11% from the end of August. This comes after both active and pending condo sales decreased significantly from the last day of July to the last day of August.
• Looking at active condo listings by price point, inventory increased in five price ranges, decreased in four price ranges and remained unchanged in one. The increase in inventory occurred with condos priced between $500,000 and $3,000,000. Active inventory decreased below $500,000 and increased over $5,000,000.
• Pending condo sales increased at five price points, decreased in four priced points and remained unchanged at one price point. The increase in pending sales was clustered below $500,000 and between $1,500,000 and $5,000,000. The decrease in pending sales occurred primarily between $500,000 and $1,500,000.
• Looking at condo inventory by community, active inventory increased in four communities, decreased in five communities and remained unchanged in one. Ka’anapali and Kihei both had a big increase in active inventory. The Napili, Kahana and Honokowai area and Wailea also saw healthy bumps in active listings. The decrease in active listings in communities tended to be far more modest.
• Pending listings decreased in four communities, increased in three communities and remained unchanged in two communities. Kihei had by far the largest drop in pending sales followed by the Napili, Kahana and Honokowai area. Kahului saw the biggest increase in pending sales.

What Does it All Mean?

Last month, we had the opportunity to attend a broker event hosted by the Realtor’s Association of Maui. One of the speakers was a Broker from Paradise, California. She provided a lot of valuable insights based on her own experiences from her community’s tragic fires in 2018. the broker spoke to the rebuild process, federal relief, insurance and more.

The broker also spoke about the impact of the fire on the real estate market. Communities within a short drive of Paradise began to see price increases shortly after the fire. Within a couple of months of the fires, nearby Chico saw a big increase in listings receiving multiple offers. Many of these buyers were displaced residents from Paradise using insurance money to buy new homes.

Will we see a similar phenomenon on Maui? The Broker from Paradise thought we would. We are definitely seeing some displaced residents buying property on other parts of the island. I know first hand of buyers purchasing replacement homes in Kapalua and replacement condos in Kihei and Kahului. That said, I am not sure that the market near Paradise is 100% analogous to the market on Maui.

Maui lost roughly 3% of its housing stock in the Lahaina Fire alone with additional homes lost to fire Upcountry. This exacerbates Maui’s already significant housing shortage. In that respect, like Paradise, there is certainly tremendous need for replacement housing for island residents.

Where things start to differ from Paradise is on the affordability side. Prices in 2023 Maui are substantially higher than the communities near Paradise in 2019. Borrowing costs are also substantially higher. Mortgage rates in early 2019 hovered around 4.5%, while just this week rates crossed the 8% barrier. Plain and simple, insurance proceeds from the fire may not be sufficient for many displaced residents to afford the replacement housing that they need.

Of course, Maui is also a big second home market. There is typically a pretty close tie between visitor numbers and second home demand. Visitor numbers are down substantially since the fires. Areas like Ka’anapali are still closed to tourism as many of the area hotels are hosting displaced residents. We aren’t sure when visitor numbers will come close to what they were prior to the fire. When they do return, how much will rising interest rates and affordability concerns impact second home buyers?

The push and pull between Maui’s incredibly limited supply and what at this point is uncertain demand will determine the market. A world with increased international tensions brings even further unknowns. Oh yeah, and of course 2024 is a Presidential election year. Based on all of the above, I would be wary of anyone who speaks with certainty about the direction of the Maui Real Estate Market. That said, we will continue to provide data so that buyers and sellers can make informed decisions.

A Little Maui Beauty to End This Post on A Good Note

Time to check in on the real estate market in Haiku, another town on the North Shore of Maui. Haiku town is a rural community spanning a large geographic area. Located on the windward side of the island, it is a popular community for year round residents. It has also seen a growing number of second home buyers over the last few years.

It’s been a while since our last market report on Haiku. This update provides data from the year to date with comparisons made to not just the same time frame of 2022, but also the first half of the year going back to 2018. This gives a better sense of how the recent market compares to conditions prior to Covid. I also gives some thoughts on the outlook for the rest of the year.

Notable Haiku Home Sale Numbers for The Year to Date

• Twenty-six homes sold in Haiku between January 1, 2023 and June 14, 2023. The median price of the homes sold is $1,452,500.
• For the same period of 2022, 52 homes sold with a median price of $1,524,000. Changing composition of sales drove the shift in median as opposed to decreased home values.
• The lowest priced home sold for $540,000. The 1932 Vintage Hawaii Plantation Style Home sits on a 13,656 square foot lot just up the street from Pauwela Cannery.
• This was just one of four sales under $1,000,000.
• The highest price sale for the year to date closed for $4,050,000. The 5 bedroom, 4 bath home offers 3,567 square feet of living space and a pool. It is located on 12.4 acres on the oceanside of Hana Highway.
• This is one of 8 sales to close for over $2,000,000, and one of three that closed for over $3,000,000.
• There were 15 land transactions in Haiku between January 1, 2023 and June 14, 2023. The median price of the land listings sold is $867,765.
• In 2022, 12 pieces of land sold during this same period of January through June. The median price of the land listings sold for that period is $887,500.

Looking at the Haiku Home Market Over The Last Five Years

While I can’t say year to year comparisons are completely without value, the period between 2021 and at least the first half of 2022 was an outlier. For that reason, I wanted to look at the last five years for some additional context, and to specifically compare the current market to “normal” pre-Covid activity.

It’s been a pretty quiet year for buyer activity in Haiku. Looking at the chart above, 2023 for the year to date is tracking well behind pre-covid levels of sales volume and buyer activity. You need to go all the way back to 2011 (not shown on the chart) to find a year with fewer home sales or pending home sales.

Looking at the Haiku Land Market over the Last Five Years

Looking at the chart above, the Haiku land market is also trending behind pre-Covid numbers. That said, it is worth noting that 2018 and 2019 were particularly busy years in terms of transaction volume. That’s due to the Haiku Town Acres subdivision and Kauhikoa Farms subdivision. Those were new projects that drove sales in 2018 with a number of additional CPR land sales in 2019.

What the Numbers Mean About the Haiku Market

The first question that bears answering is why the big dip in activity in the Haiku market? The answer like with the rest of the Maui market is a combination of constrained inventory and decreased demand due to lower affordability. On the supply side, the inventory level of active Haiku homes has ranged from the high teens to just below thirty active listings since the start of the year. Back in the couple of years prior to Covid, the inventory of active Haiku Homes for Sale usually came in somewhere around 45 active listings. In other words, the inventory this year’s been 33% or more below normal.

From an affordability side, increased prices and increased mortgage rates thinned the pool of buyers. It’s hard to quantify the decrease in demand. We just don’t have any good data. That said, we can speak a little bit about how much affordability decreased over the last few years.

The chart above speaks for itself. Between January 1st and June 14th 2018, 72.34% of all the sales in Haiku closed for less than $1,000,000. Between January 1st and June 14th of 2023, only 15.38% of all listings sold for less than $1,000,000. Appreciation in values is a big driver for this change, but not the only factor. Increased prices and increased mortgage rates make it extremely difficult for the average “step-up” buyer. That means fewer entry level homes are coming to market via sellers looking for bigger homes.

Haiku’s higher end real estate market underwent a pretty substantial shift over the last five years. Pre-covid, there was substantial inventory for sale over $2,000,000, but the number of properties sold were few and the days on market were long.

The chart above shows a shift in the Haiku luxury home market. The percentage of homes sold over $2,000,000 during the first half of the year is up substantially from the Pre-Covid era and even 2021. Days on market and inventory in this price range are both down as well. The data shows that there are a substantially higher number of affluent buyers in the Haiku market.

I just wanted to provide a couple of quick notes on the land numbers. I already provided some context on why the current land sales are well below 2018 and 2019. Like the Haiku home market, the land market is seeing a higher percentage of high end sales. One third of the transactions for both the year to date for this year and the same period last year sold for over $1,000,000. In 2018 and 2019, those numbers were 8% and 0% respectively. Finally, this isn’t reflected in the numbers, but land in Haiku is becoming scarcer. No projects like Haiku Town Acres or Kauhikoa Farms are on the horizon. Peahi Farms is largely sold. The bulk of the sales going forward will likely be individual lot sales, CPRs or smaller subdivisions.

Outlook for the Rest of The Year in the Haiku Real Estate Market

As reticent as I am to make forecasts these days, I can’t foresee any big changes in the Haiku market during the rest of the year. No significant influx of inventory appears to be imminent at this point. Meanwhile, it seems as if it would take even higher mortgage rates or some sort of additional economic headwind to significantly curtail demand.

For sellers, the low inventory is to your benefit, but there is still some nuance to this market. Affordability and construction costs have fewer buyers looking at fixer-uppers. There is also some variability in conditions depending on price points. We have seen days on market creeping up at the lower price points as entry level buyers struggle with affordability.

Buyers entering the market will of course continue to be challenged by lower inventory levels. The market does not appear to be as competitive as it was in 2022, but well-priced properties in good condition can still attract multiple buyers.

You can search the current inventory of Haiku Homes for Sale and Haiku Land for Sale on MauiRealEstate.com.

Maui Market Musings Volume XXVII looks at all the data on real estate activity on Maui in May. It includes information on new listings, pending sales and closed transactions. It also looks at end of the month inventory levels by price point and community. The numbers show a surprising surge in pending sales in what can be a quieter month for buyer activity on Maui. Keep reading for all of the details.

May Market Activity

The tables below show new Inventory, new pending sales and closed transactions for the month of May. The previous five years are shown for additional context. The numbers will show that new listing and new pending activity in the home market came closer to previous years. The gap between this year and previous years for May condo activity remained significant.

	May 2023	May 2022	May 2021	May 2020	May 2019	May 2018
Homes	97	114	135	95	106	115
Condos	97	140	187	135	160	180

By recent standards, new home listings weren’t too far below normal. The 97 homes listed exceeds new inventory for any of the previous four months this year. It is 15% below last May and 8.5% and 16% below May of 2019 and 2018 respectively. New condo inventory continues to lag. The 97 condos listed is 31% below last May. It is 39% and 46% below 2019 and 2018 respectively.

	May 2023	May 2022	May 2021	May 2020	May 2019	May 2018
Homes	76	73	110	74	107	95
Condos	91	116	231	64	134	142

This was also the busiest month for new pending home sales this year. The 76 pending sales is actually 4% higher than last May. It is 29% and 20% below May of 2019 and 2018 respectively. The 91 new pending condo sales is 22% below last May. This May’s pending condo sales are 32% and 36% below May 2019 and May 2018 respectively.

	May 2023	May 2022	May 2021	May 2020	May 2019	May 2018
Homes	69	94	116	40	125	104
Condos	89	153	242	54	145	171

Sales are a lagging indicator of market demand. The 69 homes sold is 27% below last May. It is 45% and 34% below May of 2019 and 2018 respectively. The 89 condos sold is 42% below May of 2022. This May’s closed condo transactions came in 39% and 48% below May 2019 and May 2018.

End of May Home Inventory

The charts below show active and pending home inventory in May by price point and community. They also include the numbers from the previous two months to show the general direction of the inventory.

	3/31/23		4/40/23		5/31/23
	Active	Pending	Active	Pending	Active	Pending
<$750,000	8	6	7	2	8 (+1)	9 (+7)
$750,000-$999,999	19	35	24	25	20 (-4)	30 (+5)
$1,000,000-$1,499,999	47	31	50	32	36 (-14)	39 (+7)
$1,500,000-$1,999,999	29	11	30	17	28 (-2)	15 (-2)
$2,000,000-$2,999,999	38	9	30	12	30	16 (+4)
$3,000,000-$4,999,999	36	12	38	15	43 (+5)	11 (-4)
$5,000,000-$9,999,999	35	8	33	7	38 (+5)	7
$10,000,000-$19,999,999	12	3	13	2	10 (-3)	0 (-2)
$20,000,000+	6	0	5	0	6 (+1)	0
Totals	230	115	230	112	219 (-11)	127 (+15)

	3/31/23		4/30/23		5/31/23
	Active	Pending	Active	Pending	Active	Pending
Haiku	26	4	18	10	16 (-2)	10
Hana	12	1	10	3	13 (+3)	3
Ka’anapali	9	5	11	4	15 (+4)	1
Kahului	8	12	9	11	3 (-6)	14 (+3)
Kapalua	10	1	10	2	11 (+1)	3 (+1)
Kihei	24	16	23	13	17 (-6)	15 (+2)
Kula	16	13	19	15	20 (+1)	10 (-5)
Lahaina	16	3	14	4	22 (+8)	5 (+1)
Makawao	23	10	20	14	20	10 (-4)
Napili/Kahana/Hono…	14	3	17	2	14 (-3)	5 (+3)
Pukalani	6	4	7	2	5 (-2)	6 (+4)
Sprecks/Paia	9	2	9	2	9	3 (+1)
Wailea	15	8	19	4	20 (+1)	4
Wailuku	29	26	30	23	21 (-7)	32 (+9)

Five Notable Things About the End of May Home Inventory

• Active inventory at the end of May decreased 5% from the end of April. Pending Home sales increased 13% at the end of May compared to the end of April.
• Looking at active inventory by price point, four price points increased in inventory, four decreased and one remained unchanged. The $1,000,000 to $1,499,999 price range experienced the biggest drop in inventory with 28% fewer listings at the end of May compared to the end of April. The $750,000 to $999,999 price range and $10,000,000 to $19,999,999 price ranges also had notable drops.
• Looking at pending sales by price point, pending sales increased in four price ranges, decreased in three price ranges and remain unchanged in two. All price ranges under $1,500,000 showed a substantial increase in pending sales. The $3,000,000 to $5,000,000 range experienced the biggest decrease in pending sales.
• Pivoting to the change in active listings at the community level, end of month active listings increased in six communities, decreased in six communities and remained unchanged in two. Lahaina’s active inventory increased the most. Kahului, Kihei and Wailuku experienced the biggest drops in active listings.
• End of the month pending listings increased in seven communities, decreased in two communities and remained unchanged in four communities. Pendings increased the most in Wailuku, followed by Pukalani and Kahului. The decrease in pending sales occurred in Makawao and Kula.

End of the Month Condo Inventory

The charts below provide end of the month active and pending condo inventory by price point and district. It is worth noting that the Wailea pending sales receive a boost from 75 new developer units under contract in La’i Loa at Wailea Hills. These properties went under contract between 2020 and the the first quarter of 2021. Priced from just under $1,500,000 all the way up to over $4,000,000, these long term contracts are also skewing the pending sales upwards in this price range.

	3/31/23		4/30/23		5/31/23
	Active	Pending	Active	Pending	Active	Pending
<$250,000	0	2	1	1	5 (+4)	1
$250,000-$499,999	14	10	14	13	13 (-1)	12 (-1)
$500,000-$749,999	48	27	46	32	46	30 (-2)
$750,000-$999,999	32	31	26	38	32 (+6)	36 (-2)
$1,000,000-$1,499,999	27	31	22	26	22	28 (+2)
$1,500,000-$1,999,999	24	42	25	40	24 (-1)	40
$2,000,000-$2,999,999	17	38	16	39	14 (-2)	43 (+4)
$3,000,000-$4,999,999	15	17	12	17	12	17
$5,000,000-$9,999,999	13	2	12	2	10 (-2)	7 (+5)
$10,000,000+	6	0	4	0	4	0
Totals	196	200	178	208	182 (+4)	214 (+6)

	3/30/23		4/30/23		5/31/23
	Active	Pending	Active	Pending	Active	Pending
Ka’anapali	23	11	22	12	20 (-2)	13 (+1)
Kahului	4	0	4	4	8 (+4)	2 (-2)
Kapalua	13	7	10	5	11 (+1)	7 (+2)
Kihei	59	49	54	48	65 (+11)	50 (+2)
Lahaina	17	6	13	7	13	4 (-3)
Ma’alaea	5	4	6	6	5 (-1)	6
Napili/Kahana/Hono…	43	25	41	25	38 (-3)	30 (+5)
Wailea	27	89	24	91	19 (-5)	95 (+4)
Wailuku	5	9	4	9	3 (-1)	7 (-2)

Five Notable Things About the End of May Condo Inventory

• Active and pending condo listings increased modestly from the end of April to the end of May. There are just around 2.2% more active listings and 2.9% more pending listings.
• Looking at changes in active listings by price range, actives increased in only two price ranges, remained unchanged in four price ranges and decreased in four price ranges. The increase in active inventory occurred under $250,000 and between $750,000 and $999,999. Decreases in active listings were modest at the price points where they occurred.
• Pending listings decreased at three price ranges, increased in three price ranges and remained unchanged in four price ranges. The drop in pending sales occurred between $250,000-$999,999. The sharpest increase in pending sales occurred between $5,000,000 and $9,999,999 followed by the $2,000,000 to $2,999,999 price range.
• At a community level, active listings increased in three areas, decreased in five and remained unchanged in one. The number of active Kihei Condos for sale and Kahului condos for sale increased the most from the end of April.
• Pending listings increased from the end of April in five communities, decreased in three communities and remained unchanged in one. The biggest increase in pending sales occurred in the Wailea/Makena area and the Napili/Kahana/Honokowai area. Lahaina had the most notable drop in end of the month pending sales.

Some Thoughts on the Numbers above and the State of The Maui Market

Every time I log into our Realtor database, the front page shows me the current number of pending sales for homes, condos, land and commercial properties. Throughout our winter busy season, the total number of pending sales stayed below 400. With our busy season behind us, I thought it would be unlikely to see us breach the 400 barrier anytime soon. Needless to say, it surprised me when we crossed 400 and went all the way up into above 410 pending sales in the middle of May.

As the numbers show above, new pending home sales are playing a bigger role than condo sales in the recent increase. The data also shows that the increase in pending sales is driven by activity close to and below the median sales price. Looking at community level data, the surge in pending sales is not driven by the resort markets. Places like Wailuku, Kahului and Kihei led the way.

So what’s driving this bump in homebuyer activity? We typically don’t see a seasonal surge in the Spring like the mainland. Our busiest times for transactions usually correlate more closely with a higher number of visitors. Does the increase in pending home sales correlate with the recent increase in home inventory? Is the new supply satiating pent up demand? It is hard to say at this point, but there is some anecdotal evidence. Continued price increases throughout the winter point to more demand than supply. It would make sense that there were buyers there to absorb the recent increase in new listings.

It will be interesting to see if we continue to see more new home inventory or if May was an anomalous month. The market remains unpredictable and one month doesn’t make a trend.

With pending sales back below 400, there are already some signs of cooling from the recent surge. Higher interest rates due to both more persistent inflation and the recent debt ceiling stand off continue to undercut affordability. The spike in rates last fall really cooled some of the busier communities and price ranges for new pending home sales last month.

About the only prediction I am willing to make at this point is that year to year comparisons with last year should become more favorable. Activity cooled in the second half of 2022 under rising interest rates resulting in a lower baseline for future comparisons. That’s why we include 2019 and 2018 data when comparing new pending sales, new inventory and closed transactions. 2022 was an anomalous year, and 2021 and 2020 were complete outliers. 2019 and 2018 are ultimately more relevant when comparing current conditions to that of a “normal” market. Moving forward, we will continue to do our best to keep you abreast of current market conditions on Maui.

A Little Maui Beauty to Brighten This Post

The twenty-sixth edition of the market musings is slower out of the gate than usual. So let’s cut to the chase and look at the April Market Activity and a couple of other metrics that speak to current and future market conditions.

April Market Activity

The tables below show new Inventory, new pending sales and closed transactions for the month of April. The previous five years are shown for additional context. The numbers point to a markedly quieter April compared to previous years with of course one obvious exception. April of 2020 was of course a month with no off island visitors and stay at home orders for all but essential employees.

	April 2023	April 2022	April 2021	April 2020	April 2019	April 2018
Homes	68	94	122	72	117	123
Condos	91	154	182	124	161	153

New inventory continues to be limited on Maui. New home listings came in 28% below April of 2022. The number of new listings is 42% and 45% below April of 2019 and April of 2018. New condo inventory in April came in 41% lower than April of 2022. It came in 44% and 41% lower than 2019 and 2018 respectively.

	April 2023	April 2022	April 2021	April 2020	April 2019	April 2018
Homes	65	89	124	45	108	91
Condos	92	140	216	33	135	166

The number of homes that went pending in April of 2023 is 27% lower than April of 2022. It is 40% lower than April of 2019 and 29% below April of 2018. The number of new pending condo sales in April is 34% below April of 2022. It is 32% lower than April of 2019 and 45% less than April of 2018.

	April 2023	April 2022	April 2021	April 2020	April 2019	April 2018
Homes	55	105	129	82	74	88
Condos	85	168	262	85	136	176

The number of homes that sold in April came in 48% lower than April of 2022. It came in 26% lower than April of 2019 and 37% lower than April of 2018. The number of Condo sales in April of 2023 is 49% lower than April of 2022. It is 37% lower than April of 2019 and 52% below April of 2018.

End of April Home Inventory

The charts below show active and pending home in inventory in April by price point and community. They also include the numbers from the previous two months to show the general direction of the inventory.

	2/28/23		3/31/23		4/30/23
	Active	Pending	Active	Pending	Active	Pending
<$750,000	10	7	8	6	7 (-1)	2 (-4)
$750,000-$999,999	30	28	19	35	24 (+5)	25 (-10)
$1,000,000-$1,499,999	59	40	47	31	50 (+3)	32 (+1)
$1,500,000-$1,999,999	32	7	29	11	30 (+1)	17 (+6)
$2,000,000-$2,999,999	37	13	38	9	30 (-8)	12 (+3)
$3,000,000-$4,999,999	35	9	36	12	38 (+2)	15 (+3)
$5,000,000-$9,999,999	26	9	35	8	33 (-2)	7 (-1)
$10,000,000-$19,999,999	13	1	12	3	13 (+1)	2 (-1)
$20,000,000+	5	1	6	0	5 (-1)	0
Totals	247	115	230	115	230	112 (-3)

	2/28/23		3/31/23		4/30/23
	Active	Pending	Active	Pending	Active	Pending
Haiku	27	5	26	4	18 (-8)	10 (+6)
Hana	11	1	12	1	10 (-2)	3 (+2)
Ka’anapali	10	5	9	5	11 (+2)	4 (-1)
Kahului	18	8	8	12	9 (+1)	11 (-1)
Kapalua	6	2	10	1	10	2 (+1)
Kihei	29	24	24	16	23 (-1)	13 (-3)
Kula	14	14	16	13	19 (+3)	15 (+2)
Lahaina	16	8	16	3	14 (+2)	4 (+1)
Makawao	27	8	23	10	20 (-3)	14 (+4)
Napili/Kahana/Hono…	12	2	14	3	17 (+3)	2 (-1)
Pukalani	7	6	6	4	7 (+1)	2 (-2)
Sprecks/Paia	10	0	9	2	9	2
Wailea	14	7	15	8	19 (+4)	4 (-4)
Wailuku	35	21	29	26	30 (+1)	23 (-3)

Three Observations from the End of April Home Inventory

• No big change. The biggest takeaway may be that the home inventory at the end of April is almost identical to the end of March. The active listings are the exact same and there are just three fewer pending listings.
• Honing in on the market by price point, active inventory increased in more price points than it decreased. Pending sales increased in just as many price points as it decreased. The biggest increase in active home listings occurred between $750,000 and $999,999. The biggest increase in pending sales occurred between $1,500,000 and $1,999,999 with $2,000,000-$5,000,000 also seeing an increase in buyer activity.
• Looking at shifts in inventory by community produced a mix bag. The inventory of active homes increased modestly in most communities. With pending sales decreasing in most communities. That said, there were some exceptions. Haiku active inventory dropped and pending sales rose sharply. Wailea’s active inventory increased the most and pending sales decreased the most.

End of April Maui Condo Inventory

The charts below provide end of the month active and pending condo inventory by price point and district. Keep in mind that the Wailea pending sales continue to receive a boost from 75 new developer units under contract in La’i Loa at Wailea Hills. These properties went pending between 2020 and the the first quarter of 2021. Priced from just under $1,500,000 all the way up to over $4,000,000, these long term contracts are also skewing the pending sales upwards in this price range.

	2/28/2023		3/31/2023		4/30/2023
	Active	Pending	Active	Pending	Active	Pending
<$250,000	2	2	0	2	1 (+1)	1 (-1)
$250,000-$499,999	16	14	14	10	14	13 (+3)
$500,000-$749,999	41	42	48	27	46 (-2)	32 (+5)
$750,000-$999,999	29	45	32	31	26 (-6)	38 (+7)
$1,000,000-$1,499,999	33	30	27	31	22 (-5)	26 (-5)
$1,500,000-$1,999,999	33	35	24	42	25 (+1)	40 (-2)
$2,000,000-$2,999,999	18	41	17	38	16 (-1)	39 (+1)
$3,000,000-$4,999,999	12	17	15	17	12 (-3)	17
$5,000,000-$9,999,999	13	0	13	2	12 (-1)	2
$10,000,000+	5	0	6	0	4	0
Total	202	226	196	200	178	208

	2/28/23		3/31/23		4/30/23
	Active	Pending	Active	Pending	Active	Pending
Ka’anapali	27	6	23	11	22 (-1)	12 (+1)
Kahului	3	4	4	0	4	4 (+4)
Kapalua	14	5	13	7	10 (-3)	5 (-2)
Kihei	52	79	59	49	54 (-5)	48 (-1)
Lahaina	14	9	17	6	13 (-4)	7 (+1)
Ma’alaea	5	7	5	4	6 (+1)	6 (+2)
Napili/Kahana/Hono…	52	21	43	25	41 (-2)	25
Wailea	28	85	27	89	24 (-3)	91 (+2)
Wailuku	7	8	5	9	4 (-1)	9

Three Noteworthy Things about the End of April Maui Condo Inventory

• The condo market experienced a 9% drop in active listing and a 4% increase in pending listings from the end of March to the End of April.
• The active condo inventory dropped in six price ranges, stayed the same in two and increased by just one in two price ranges. The biggest drop in active inventory occurred in the $750,000-$1,499,999 and $3,000,000 to $5,000,000 price ranges. Pending sales increased in four price ranges, decreased in three and stayed the same in three price ranges. The biggest increases in pending sales occurred between $250,000-$999,999.
• Inventory levels decreased in the majority of the communities around the island. Kahului was unchanged and only Ma’alaea saw an increase with just one new active listing. Lahaina experienced the biggest drop in active listings as a percentage of overall inventory. Pending sales increased in the majority of communities with Kahului seeing the largest overall increase. The Napili/Kahana and Honokowai communities both saw no change in pending sales. Kihei and Kapalua both saw a decrease in pending sales.

What Kind of Competition Are We Seeing for Properties?

In 2021 and the first quarter of 2022, bidding wars were common in the market. We started to see that type of competition wane in the second half of 2022. During the first quarter of the year, I started to see a few more over asking price sales on the MLS. That was particularly true with parts of the vacation rental condo market. Buyers jockeyed for the limited inventory. I thought it was worth looking at competition this April compared to our last couple of “normal” months of April.

While our MLS database does not show whether listings received multiple offers, we can of course see when properties sell for over asking price. I will make the assumption that properties selling for asking price received multiple offers. I will admit, that isn’t a fool proof metric. There are circumstances where a motivated buyer will bid above asking to fend off potential or perceived competition that may or may not appear. I have also seen circumstances with multiple offers that do not exceed asking price.

Looking at April’s sales, 25.45% of all homes sold for over asking price and a total of 46.43% sold for asking price or above. With condos, 20% of the sales closed for over asking price and 47.06% sold for asking price or above. In April of 2019, 13.51% of homes sold for more than asking price and 33.78% sold for asking price or above. For condos in April of 2019, 14.6% sold for over asking price and 42.34% sold for asking price or above. It is pretty striking that the market is that much more competitive than pre-Covid numbers even with substantially lower sales volume.

How Quickly Are New Listings going Under Contract?

I haven’t looked at this metric in a musings since the fall. Back then, a spike in interest rates over 7% caused properties to sit longer. Recently, it seems like more properties went under contract quickly again. Our office’s two newest listings both went under contract within the first few days of coming to market. I thought it was worth seeing if the quantitative numbers matched the anecdotal.

I looked at new listings between May 1st and May 8th. During that period, 25 homes came to market. Forty percent went under contract within 10 days of coming to market. For that same period, 26 condos came to market. Just under thirty-five percent went under contract in ten days or less.

For context, I looked at the same range of dates from 2019. Of the 33 homes that came to market during that time, 18.18% went under contract in ten days or less. Of the 39 condos that came to market, 23.07% went under contract in ten days or less.

Market demand, at least for that particular week of May exceeds what we were seeing during the same period of 2019, our last semi-normal market. I say semi-normal just because that was a year of more limited inventory.

Interest Rate Watch

One advantage of being late to publish, I can tell you that May is on track to be a little busier than I expected. Pending home, condo and land sales on island are at a high for the year. That said, some potential headwinds are growing. As of May 26th, the average interest rate on a 30 year fixed mortgage rose to 7.14%. That’s the highest they’ve been since last November.

When interest rates were this high in the fall, activity slowed in the market. This was particularly true for homes under $1,000,000 and non-vacation rental condos geared towards Maui Residents. If rates stay this high, I wouldn’t be surprised to see a similar impact on the market.

One of the reasons for the recent increase in rates is due to the debt-ceiling standoff. At the time that I am writing this post, it looks there may be a possible solution to the debt ceiling crisis with President Biden and Speaker McCarthy coming to an agreement in principle. Now, that still needs to go to vote on the house floor. In today’s politics, I don’t anything for granted. If the deal is passed, rates may ease back down some. If it doesn’t pass… Yikes.

A Little Maui Beauty to Brighten This Post

A warm moonlit night, palm fronds rustling from a gentle breeze, and an ample porch for you and your friends and family to enjoy it all. Our new Hana Listing offers all of that and more.

With the first quarter of the year done, we wanted to provide some more community level market updates. A few weeks back, we did a post on the Spreckelsville neighborhood. This post looks at market activity just up the coastline in Paia and Kuau. The Maui Real Estate Team Office is located off of Baldwin Avenue in Paia. Needless to say, it is a market we follow closely. This post looks back at market activity during the second half of 2022 and the first quarter of 2023. We also give a few thoughts on the market outlook for the rest of the year.

One quick note before we get to the numbers, the local Realtor’s Association lump Paia, Kuau and Spreckelsville into the same district. That makes sense geographically, but the markets are just different enough that we like to provide separate market updates for the two areas.

Paia Second Half of 2022 and First Quarter of 2023 Sales Numbers

• Nine homes sold in Paia between July 1, 2022 and March 31st 2023. The median price of the homes sold during this period came in at $940,000.
• Over the same period between July of 2021 and March of 2022, twenty homes sold. The median sales price during that time came in at $1,175,000. The decrease in median price is a reflection of the inventory sold rather than a decrease in property values.
• The lowest priced home to sell over the last nine months closed in December for $705,000. The four bedroom, two and a half bath home with 1,507 square feet of living space is located in the Skill Village neighborhood. The home needed some TLC.
• The highest priced sale over the last nine months closed for $5,700,000. This 3 bed, 2.5 bath home includes 2,562 of living space on a 18,025 square foot oceanfront lot on Kuau Point. This home sold off the market.
• Skill Village experienced the most sales activity over the last nine months with 3 transactions. Kuau Point and the downtown Paia area both had 2 closed sales. Neighborhoods like Kuau Bayview, North Shore Village and Paia Halelani did not see any inventory and consequently no sales activity.
• One condo closed at Kuau Plaza in the last nine months. The one bedroom, one bath condo sold for $700,000 in July of 2022. That sale set a new record for this small vacation rental condo development. Two sales occurred in Kuau Plaza between July 2021 and March 30th, 2022.

A Particularly Quiet Start to 2023 in Paia

While the volume of sales for the last nine months came in quite a bit below the same period of 2021-2022, the first quarter of 2023 was particularly slow. Only 2 homes sold in the first three months of this year. Only two homes went under contract during this period. This is the slowest year for first quarter sales since 2014, and the slowest first quarter for pending sales since 2009!

So what’s driving the decrease in sales activity? Well, there isn’t a community on Maui where activity isn’t lower than last year. That is due to a mix of both decreased demand and diminished inventory. That said, the Paia and Kuau area are seeing a particularly acute decrease in inventory at “lower” price points. Only one home priced for less than $1,500,000 came to market in the last six months and only four homes for $2,000,000 or less.

The golden handcuffs of low interest rates, the lack of opportunity for step up buyers and just a general lack of inventory in this desirable community combined to create the current inventory crunch. With so little inventory available at lower price points, it is safe to say that the dip in median price we saw during the last nine months won’t continue going forward. Once again, the shift in inventory sold will be the biggest driver in the change in median prices.

The Market Outlook in Paia for the Rest of 2023

Based on inventory levels, I don’t think I am going out on a limb saying sales volume will likely remain quiet. There are currently two properties under contract, and it does not appear as if significant inventory relief is forthcoming. The dynamics that resulted in the recent decrease in inventory remain in place. What about demand? It’s hard to say what to expect. The trajectory of interest rates will play a part. Lower rates may generate a few more sales, while any spike in rates could keep some buyers on the sideline. Needless to say, we will be keeping a close eye on inventory in this community. You can search the current inventory of Paia Homes for Sale on our site.