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 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.

Welcome to our 25th edition of the Maui Market Musings. This latest edition focuses on the market activity during March, and the resulting levels of inventory at the end of the month. Being that these are long posts, I will skip the pleasantries and cut straight to the numbers.

March Market Activity

The tables below show new Inventory, new pending sales and closed transactions for the month of March. The previous five years are shown for additional context. One thing to note, we started adding these charts just a few months ago. This is the first time the charts will start capturing data from the very start of when the pandemic started to influence the market. The influence will be particularly pronounced with next month’s charts.

	March 23	March 22	March 21	March 20	March 19	March 18
Homes	70	119	159	88	161	118
Condos	99	188	190	181	157	191

Maui entered the month of March with a shortage of inventory and it left the month of March with even fewer properties for sale. The 70 homes listed is 41% below last year. The closest March for new inventory in the previous five years is March 2020, and there was still 25% more inventory that month. Keep in mind, listing activity for homes dropped to next to nothing in the second half of March 2020 as stay at home orders went out and tourism closed.

The 99 new condos that came on the market in March is 47% below last March. The next closest recent March was in 2019. The 157 condos listed that month is 59% higher than this month. As a side note, March 2020 was a big month for condo listings. While people were reticent to list their homes, many opted to list their now vacant vacation rental condos.

March New Pending Sales

	March 23	March 22	March 21	March 20	March 19	March 18
Homes	70	100	144	60	106	112
Condos	85	169	284	57	149	204

While new listing activity is slow, buyer demand also remains slow. New home pendings came in 30% lower than last year. They are 34% lower than March of 2019. They only exceed March of 2020 when pending sales dwindled to a trickle in the second half of the month. There were also quite a few pending sales that cancelled.

March Closed Transactions

	March 23	March 22	March 21	March 20	March 19	March 18
Homes	72	98	118	82	90	100
Condos	115	183	228	157	152	126

The gap in closed home transactions with the previous five years wasn’t quite as extreme. Home sales were about 27% behind last year. They came in 20% and 28% behind March of 2018 and 2019 respectively. They were closest to March of 2020, albeit some of that is due to transactions that either delayed closing or cancelled at the onset of Covid.

The closed condo sales came in 37% behind March of 22. The gap with pre-covid years was not quite as substantial. This March’s numbers came in 24% and 9% below 2019 and 2018 respectively. That 2018 year was particularly slow for condo sales. It is notable that the March 2023 sales received a boost from 14 new developer closes at Paradise Ridge Estates. These closes came from contracts written between 2018 and February of 2021.

(more…)

The Maui Real Estate Team strives to keep buyers and sellers informed about market conditions via our Market Musings Posts. It’s been a while though since we provided a community of neighborhood update. With the first quarter wrapping up this week, no time is better than the present to check in on Spreckelsville, one of our backyard neighborhoods. This North Shore community situated between Paia and the Airport continues to be a popular location for Kama’aina and second home owners. Convenience, climate, beaches and world-class ocean sports distinguish this community and explain the premium sales prices. This post looks at recent sales, current inventory and market outlook.

The map above shows the Spreckelsville area. Green pins represent recent sales. Red pins signify active listings. Click on individual pins for details on the properties.

Recent Spreckelsville Sales Activity

• A total of five properties sold over the last nine months. That further breaks down into four homes and one lot.
• All four homes sold in the Old Sprecks area of the neighborhood. In fact, you could stand at the intersection of Nonohe and Pa’ani and hit all four homes with a well thrown Frisbee.
• The highest priced home to sell closed for $5,300,000. That transaction actually included two properties sold together. One is a 1940s vintage home with 3 bedrooms, 3.5 bathrooms and 2,428 square feet of living space. The home is located on a good sized lot of .57 acres. The second property consists of a smaller, one bedroom cottage with 953 square feet of living space on a 10,796 square foot lot.
• The new owner turned around and immediately sold the smaller of the two properties. That transaction closed for $2,280,000, the lowest priced home sale in Sprecks over the last nine months.
• It’s also notable that two of the four sales involved current Sprecks owners. One was expanding their holdings in the neighborhood while the other moved within the neighborhood. One sold before coming to market. That is common in the neighborhood.
• While sales weren’t close to record highs, the homes that sold closed at a premium for their location and size.
• The one lot that closed sold in the E Papae Ka Puko’a (The Spencer) subdivision. The .769 acre lot that backs up against the North Shore bike path and Hana Highway closed for $1,900,000.
• All of the sales referenced above occurred in the second half of 2022.

Current Spreckelsville Inventory

There are currently three homes for sale in Spreckelsville on the market at this time. One of the three listings is the Oasis Spreckelsville, a truly extraordinary property. The home and detached studio feature two pools with literally every square inch of the property well conceived and executed. The lowest priced offering is a very well maintained, 4,004 square foot home with a pool in Sprecks V. The asking price is $3,300,000. The third listing is the previously referenced 1940s vintage home purchased as part of the two property sale last year. The new owner is currently going through the process of subdividing the larger .57 acre lot. The property is available for purchase prior to completion of the subdivision for $4,400,000.

Watch this video on YouTube.

Spreckelsville Rest of 2023 Market Outlook

With no sales recorded for the year to date, it looks unlikely that we will hit the ten and eleven sales of 2021 and 2022 respectively. Inventory remains relatively limited and demand is down from the lofty heights of the previous two years both nationally and locally. It seems likely that the market is normalizing somewhat. Looking back over the last ten years, annual sales tended to fluctuate significantly with only 2014 and 2017 recording more than 7 sales and 2018 and 2019 recording 2 and 3 sales respectively.

With our broker Billy and agent Martin calling Sprecks their home, it is safe to say our office keeps close tabs on this neighborhood. Their presence in the neighborhood enhances their ability to assist buyers and sellers interested in this fantastic North Shore community.

This is our 24th installment of the Maui Market Musings. This latest edition looks at market activity and inventory levels as of the end of February. These posts tend to be long so I will keep the intro on the short side. Without further ado, here are the numbers.

February Market Activity

The tables below show new inventory, new pending listings and closed transactions during February with data from the previous five years provided for additional context.

New Inventory

	2/23	2/22	2/21	2/20	2/19	2/18
Homes	68	122	117	119	141	115
Condos	82	178	202	159	161	191

Like most places, inventory remains constrained on Maui. February did not provide much in the way of inventory relief. New home inventory came in 44% lower than February of 2022. It is between 41% and 52% lower than the three Februaries prior to the start of Covid. New condo inventory is 54% lower than February of 2022. It is anywhere between 48% and 57% lower than any of the three months of February between 2018 and 2020.

Pending Sales

	2/23	2/22	2/21	2/20	2/19	2/18
Homes	57	94	133	85	90	83
Condos	79	170	238	127	127	161

While inventory remains low, transaction volume does too. Pending home sales came in 39% lower than last year. The activity in the home market for this February is anywhere between 31% and 37% below the three Februaries between 2018-2020. For the condo market, the drop from last year is more dramatic with 54% fewer pending sales. February 2023 pending condo sales are anywhere between 38% and 51% below the three Februaries prior to Covid.

From time to time, I will hear someone rationalize that low buyer activity is just due to lower inventory. You might be able to make that argument with some segments of the vacation rental condo market. That said, affordability is clearly a significant factor in driving the lower volumes. Prices just haven’t seen significant adjustments since the spike in rates. That’s not to say that there aren’t buyers in this market, it is just a smaller pool.

Closed Transactions

	2/23	2/22	2/21	2/20	2/19	2/18
Homes	38	83	96	80	75	95
Condos	65	157	162	130	119	123

This February’s closed transactions reflect the low pending sales between November and January. For homes, the 38 homes sold is 54% lower than last February. That is between 49% and 60% lower than the three last pre-Covid Februaries. On the condo side, the 65 closed sales is 59% below last year and anywhere between 44% and 50% below any February between 2018 and 2020.

End of February Maui Home Inventory

The charts below show active and pending home sales by price point and community on the last day of the month over the last three months.

	12/31/22		1/31/23		2/28/23
	Active	Pending	Active	Pending	Active	Pending
<$750,000	6	10	10	11	10	7 (-4)
$750,000-$999,999	25	28	21	25	30 (+9)	28 (+3)
$1,000,000-$1,499,999	78	20	71	30	59 (-12)	40 (+10)
$1,500,000-$1,999,999	36	11	33	9	32 (-1)	7 (-2)
$2,000,000-$2,999,999	37	12	42	7	37 (-5)	13 (+3)
$3,000,000-$4,999,999	31	9	32	10	35 (+3)	9 (-1)
$5,000,000-$9,999,999	27	8	27	6	26 (-1)	9 (+3)
$10,000,000-$19,999,999	14	0	16	0	13 (-3)	1 (+1)
$20,000,000+	4	2	5	1	5	1
Total	258	100	257	99	247 (-10)	115 (+16)

	12/31/22		1/31/23		2/28/23
	Active	Pending	Active	Pending	Active	Pending
Haiku	29	7	26	7	27 (+1)	5 (-2)
Hana	10	1	9	1	11 (+2)	1
Ka’anapali	9	3	10	5	10	5
Kahului	16	13	13	11	18 (+5)	8 (-3)
Kapalua	5	3	7	1	6 (-1)	2 (+1)
Kihei	39	7	32	17	29 (-3)	24 (+7)
Kula	21	10	21	11	14 (-7)	14 (+3)
Lahaina	18	11	19	9	16 (-3)	8 (-1)
Makawao	35	4	31	6	27 (-4)	8 (+2)
Napili/Kahana/Hono	13	3	13	1	12 (-1)	2 (+1)
Pukalani	7	3	11	4	7 (-4)	6 (+2)
Sprecks/Paia	9	1	8	1	10 (+2)	0 (-1)
Wailea	13	6	16	3	14 (-2)	7 (+4)
Wailuku	25	25	30	17	35 (+5)	21 (+4)

Three Notable Things About the End of February Maui Home Inventory

• Active home inventory dropped 4% between January 31st and February 28th. Pending sales increased 16%. The new listings in February and the new pending sales in February further up the page provide some context. The decrease in inventory is largely due to new listings coming in way below normal. An increase in pending sales is pretty normal for this time of year, but the rate of increase is well below normal.
• Market activity was something of a mixed bag by price point. The $1,000,000-$1,499,999 saw the biggest increase in pending sales. That is a little bit of a surprise with interest rates increasing again.
• Looking at the inventory at a community level, all of Upcountry saw an increase in pending listings and a decrease in active listings. Kula inventory is particularly low. Kihei also saw a notable increase in pending sales. The resorts were relatively quiet. While Wailea pending sales increased by a few, buyer activity is still below normal for this time of year.

End of February 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 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. Paradise Ridge Estates is another new development in Kihei with 18 pending sales based on contracts signed between 2018 and the first quarter of 2022. Eight units in Paradise Ridge Estates closed on March 1st so the impact will be diminished in next month’s numbers.

	12/31/22		1/31/23		2/28/23
	Active	Pending	Active	Pending	Active	Pending
<$250,000	2	2	1	2	2 (+1)	2
$250,000-$499,999	12	16	14	11	16 (+2)	14 (+3)
$500,000-$749,999	38	25	49	31	41 (-8)	42 (+11)
$750,000-$999,999	42	27	39	42	29 (-10)	45 (+3)
$1,000,000-$1,499,999	32	21	29	32	33 (+4)	30 (-2)
$1,500,000-$1,999,999	26	29	30	35	33 (+3)	35
$2,000,000-$2,999,999	18	36	17	40	18 (+1)	41 (+1)
$3,000,000-$4,999,999	10	18	11	17	12 (+1)	17
$5,000,000-$9,999,999	14	0	12	2	13 (+1)	0
$10,000,000+	4	0	4	0	5 (+1)	0
Totals	198	174	206	212	202	226

	12/31/22		1/31/23		2/28/23
	Active	Pending	Active	Pending	Active	Pending
Ka’anapali	22	9	24	12	27 (+3)	6 (-6)
Kahului	4	3	3	4	3	4
Kapalua	12	3	13	6	14 (+1)	5 (-1)
Kihei	61	45	65	72	52 (-13)	79 (+7)
Lahaina	11	12	12	9	14 (+2)	9
Ma’alaea	5	5	5	7	5	7
Napili/Kahana/Honokowai	50	16	50	14	52 (+2)	21 (+7)
Wailea	27	79	26	81	28 (+2)	85 (+4)
Wailuku	4	4	7	6	7	8 (+2)

Three Notable Things from the End of February Condo Inventory

• Active condo listings dipped 2% and pending condo listings increased almost 7% between January 31st and February 28th. Again, the story may be better explained by the numbers for new inventory and new pending sales in February further up this post. It’s expected to see pending sales increase in February. The extent to which they are increasing is well below normal.
• Looking at active and pending sales by price point, the biggest decrease in active listings and the biggest increase in pending listings occurred under $1,000,000. The higher price points were quiet with an increase in listings and only one additional pending over $1,500,000..
• At a district level, Kihei and Napili/Kahana and Honokowai saw the biggest increase in pending sales. This is not too big of a surprise considering the season. This is peak buying season for vacation rental condos. The resorts are surprisingly quiet with Ka’anapali and Kapalua seeing a drop in pending sales. Wailea’s pendings increased modestly after a quiet January.

Some Quick Thoughts

Weird conditions persist. There is still something of a balance in this market that is sustaining prices. As established above, demand is lower, but inventory remains low too. That’s what differentiates Maui from markets on the mainland seeing more significant price decreases. That said, Maui is not monolithic. There are parts of the market where properties are going under contract quickly and others where the days on market are steadily ticking upward.

Buyers searching for vacation rental condos in beach towns like Kihei can expect properties to go under contract relatively quickly. It may not be 2021 or early 2022, but when a 2 bedroom vacation rental in a good complex hits the market, it is safe to say it won’t last more than a few days. It is hard to assess the depth of that buyer pool, but inventory is so incredibly scarce that prices continue to go up in this area due largely to scarcity.

On the other end of the spectrum, the luxury condo market is quiet. Between January 1 and the end of February, only 5 condos went under contract for more than $2,500,000. This is well below 29 during the same period of 2022. It’s worth noting, activity is below pre-Covid levels but the drop off isn’t quite as steep. Slower activity in the luxury market is a national trend. The reasons extend beyond rates.

The home market is also pretty variable. The one real difference with the condo market is that there are no segments of the market that truly feel frothy. Some new listings are going under contract relatively quickly, but it a far cry from the madness of last February.

A Little Maui Beauty to Brighten This Post

This is the 23rd edition of our Maui Market musings. We started this series of posts just over a year ago. Our goal was to try to look at market statistics that provide a better indication of current market conditions. Sales figures can lag behind current market dynamics. We wanted to focus on supply and current demand in what was a more dynamic market. The market slowed quite a bit over the last year, but market conditions are far from straight forward. Keep reading below to learn more about January market activity, active and pending listings and information on sales price vs. list price.

January Market Activity

What type of market did we see in the past month? How many homes and condos came to market, how many went under contract and how many sold? Data from the previous 5 years provides some context.

New Inventory

	January 23	January 22	January 21	January 20	January 19	January 18
Homes	66	117	104	133	135	134
Condos	113	195	197	164	197	215

Looking at the chart above, new inventory is well below normal. Not just compared to the last couple of years but particularly compared to January in the three years prior to the start of the pandemic. New home inventory is almost 44% below last January and over 50% lower than any January between 2018 and 2020. Condo inventory wasn’t off quite as much. It is 42% lower than last year and anywhere between 30% and 47% lower than January of 2018, 2019 and 2020.

Constrained inventory may be a challenge for a while. The low interest rates of the last couple of years have have potential Sellers that might be looking to step up to a larger home or downsize staying put. Other potential sellers are reticent to list with limited replacement inventory available.

Pending Sales

	January 23	January 22	January 21	January 20	January 19	January 18
Homes	54	90	120	89	98	106
Condos	90	177	243	133	153	162

January typically marks the first full month of our winter buying season. This period that runs from Christmas to mid-April coincides with peak visitor season. After a quiet fall, there was some question as to whether we might see a resumption of normal or at least something closer to normal buyer activity as we enter busy season. Thus far, that does not appear to be the case. Pending home sales are off 40% from last year and anywhere between 39% and 49% below January during 2018-2020. Pending condo sales are down 49% from last year and anywhere between 32% and 44% below 2018-2020.

Closed Transactions

	January 23	January 22	January 21	January 20	January 19	January 18
Homes	59	91	94	81	61	83
Condos	52	151	114	124	125	120

The sales numbers are a lagging indicator. For the most part, they tend to reflect contracts agreed upon in November and December. The data above reinforces what we noted in previous editions of our market musings. It was a slow fall, particularly for condo sales.

Home sales are 35% below last year and anywhere between 3% and 29% below January 2018-2020. On the condo front, this January’s sales are a whopping 65% below last year and between 57% and 58% below January 2018, 2019 and 2020.

End of Maui January Home Inventory

The charts below provide end of the month active and pending home inventory by price point and district around Maui.

	11/30/22		12/31/22		1/30/23
	Active	Pending	Active	Pending	Active	Pending
<$750,000	5	14	6	10	10 (+4)	11 (+1)
$750,000-$999,999	31	25	25	28	21 (-4)	25 (-3)
$1,000,000-$1,499,999	61	28	78	20	71 (-7)	30 (+10)
$1,500,000-$1,999,999	28	17	36	11	33 (-3)	9 (-2)
$2,000,000-$2,999,999	34	11	37	12	42 (+5)	7 (-5)
$3,000,000-$4,999,999	32	7	31	9	32 (+1)	10 (+1)
$5,000,000-$9,999,999	23	9	27	8	27	6 (-2)
$10,000,000-$19,999,999	14	0	14	0	16 (+2)	0
$20,000,000+	5	1	4	2	5 (+1)	1 (-1)
Total	233	112	258	100	257 (-1)	99 (-1)

	11/30/22		12/31/22		1/31/23
	Active	Pending	Active	Pending	Active	Pending
Haiku	29	10	29	7	26 (-3)	7
Hana	10	0	10	1	9 (-1)	1
Ka’anapali	9	2	9	3	10 (+1)	5 (+2)
Kahului	16	13	16	13	13 (-3)	11 (-2)
Kapalua	5	3	5	3	7 (+2)	1 (-2)
Kihei	31	15	39	7	32 (-7)	17 (+10)
Kula	22	12	21	10	21	11 (+1)
Lahaina	15	13	18	11	19 (+1)	9 (-2)
Makawao	11	7	35	4	31 (-4)	6 (+2)
Napili/Kahana/Hono	9	3	13	3	13	1 (-2)
Pukalani	10	3	7	3	11 (+4)	4 (+1)
Sprecks/Paia	7	3	9	1	8 (-1)	1
Wailea	16	4	13	6	16 (+3)	3 (-3)
Wailuku	32	19	25	25	30 (+5)	17 (-8)

Three Things to Note About the End of January Home Inventory

• Overall, there was remarkably little change in active and pending sales since the end of December. Island wide there was only one fewer pending listing and one fewer active listing. Have I mentioned that January is usually the start of busy season? This is not the type of month to month shift you would expect with more seasonal activity.
• Drilling down by price point, a little more change is evident. The price ranges between $750,000-$1,500,000 tend to have the highest percentage of financed transactions. That range experienced higher inventory and decreased pendings through much of the fall due to higher rates. With rates lower through much of January, inventory is starting to decrease again. The $1,000,000-$1,500,000 price saw the biggest increase in pending sales of any price point.
• Home buyer activity in the resorts remained quiet. Kapalua and Wailea both saw a decrease in pending sales and a small increase in active inventory. Ka’anapali inventory increased with a couple of additional pending sales reported.

End of January 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 pending sales receive a boost from 75 new developer units reserved 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 also pending sales upwards in this price range. Paradise Ridge Estates is another new development in Kihei with 18 pending sales based on contracts signed between 2018 and the first quarter of 2022.

	11/30/22		12/31/22		1/30/23
	Active	Pending	Active	Pending	Active	Pending
<$250,000	1	4	2	2	1 (-1)	2
$250,000-$499,999	19	14	12	16	14 (+2)	11 (-5)
$500,000-$749,999	43	33	38	25	49 (+11)	31 (+6)
$750,000-$999,999	28	29	42	27	39 (-3)	42 (+15)
$1,000,000-$1,499,999	31	24	32	21	29 (-3)	32 (+11)
$1,500,000-$1,999,999	21	28	26	29	30 (+4)	35 (+6)
$2,000,000-$2,999,999	18	39	18	36	17 (-1)	40 (+4)
$3,000,000-$4,999,999	11	17	10	18	11 (+1)	17 (-1)
$5,000,000-$9,999,999	12	2	14	0	12 (-2)	2 (+2)
$10,000,000+	3	0	4	0	4	0
Totals	187	190	198	174	206 (+8)	212 (+38)

	11/30/22		12/31/22		1/31/23
	Active	Pending	Active	Pending	Active	Pending
Ka’aanapali	25	4	22	9	24 (+2)	12 (+3)
Kahului	5	5	4	3	3 (-1)	4 (+1)
Kapalua	14	2	12	3	13 (+1)	6 (+3)
Kihei	53	61	61	45	65 (+4)	72 (+27)
Lahaina	14	8	11	12	12 (+1)	9 (-3)
Ma’alaea	4	8	5	5	5	7 (+2)
Napili/Kahana/Hono	39	19	50	16	50	14 (-2)
Wailea/Makena	23	85	27	79	26 (-1)	81 (+2)
Wailuku	8	8	4	4	7 (+3)	6 (+2)

Three Things to Note About The End of January Condo Activity

• The end of January condo numbers do show more of a seasonal shift with a 21.83% increase in pending sales over the end of December. It also appears as if more sellers are coming to market with active listings increasing despite the increased pending sales.
• Drilling down by price point, the increase in pending sales is pretty broad based with only two price ranges showing fewer pending sales and two price points unchanged.
• Looking at the districts, Kihei is by far and away the focal point of increased condo sales. Kihei pending sales increased 60% since the end December. Pending sales throughout the rest of the districts were mixed. Notably, Wailea and the other resorts were really quiet as was the Napili, Kahana and Honokowai district.

Interest Rates

One of the bigger takeaways from the home inventory was the increase in buyer activity and decrease in listings in the price ranges with more financed buyers. The decrease in interest rates at the end of last year and to start this year improved affordability bringing buyers back to the market. There were some who thought further decreases in rates could heat up the market again. Well, if you haven’t been tracking rates closely, they are back on the rise again.

Forecasting rates is a fool’s errand at this point. That said, the trajectory of rates will continue to impact the market. Needless to say, higher rates may cool some segments of the market while any substantive decrease in rates could boost demand.

Are Sellers Negotiating?

During the frenzied market of 2021 and the first half of 2022, negotiation became something of a forgotten term on Maui. Sellers were in the driver seat and a significant number of the sales closed for asking price or above. With less buyer activity than last year, how much are sellers willing to negotiate in the current market?

While we don’t have transparency on contract prices with recent pending sales, I looked at closed sales between January 1 and February 15th to get a sense of how much negotiation occurred.

Looking at the home chart, you can see that there still is some competition for homes with 31% of all sales coming in at full asking price and an additional 13% over asking price. That points to the continued impact of low inventory. While there are fewer buyers, the below normal inventory levels mean that there can be competition for quality listings. That said, 18% of buyers are paying anywhere between 5% and 10% below asking price. An additional 15% are paying more 10% below asking price with a handful of those more than 20% below.

Looking at the condo chart, recent sales point to a more competitive market with 18% of recent sales closing for over asking price and 37% for full price. Only 16% of all listings sold for less than 95% of asking price with only 1% less than 90% of asking price. While buyer activity is down, inventory remains limited and some segments of the market are particularly scarce.

Overall, buyers have more latitude to make offers under current market conditions. That said, it really depends on price range and the districts where they are searching. It is also worth noting that a number of the sellers who are negotiating are those that priced above market. At this point, values feel pretty stable and sellers aren’t chasing the market.

A Few Last Thoughts

This musings is being published a little later than usual in the month. That afforded me the opportunity to incorporate sales data from the first 15 days of the month in the section above. While I didn’t delve into this February’s pending data yet, at a surface level the overall number of pending sales continues to increase. They should be rising as this is our peak buying season. The questions is how much are pending sales increasing compared to what is normal during this time of year? Anecdotally, it seems like the resorts are seeing a little more activity than they were in January. It will be interesting to see how the numbers stack up to previous years at the end of the month.

While things are understandably busier than the fall, market conditions remain weird. Decreased demand for this time of year is offset in part by lower inventory. That creates some pockets of the market that remain competitive. That said, there are also a fair number of sellers stuck in the market frenzy mindset. For the most part, those properties are quiet and accumulating days on market.

There are still quite a few sellers hitting surprisingly high prices. That’s part of the weird vibe that permeates the market.

A Little Maui Beauty to Brighten This Post

Contact The Maui Real Estate Team

Questions on this month’s numbers? Thinking about buying or selling property on Maui? Contact the Maui Real Estate Team. We welcome the chance to talk, listen and learn more about your real estate needs. Out experienced group of agents are here to help you guide through the current market’s peculiar conditions.