Maui Real Estate Blog
September 2022 Ka’anapali Market Update
Post Updated September 29, 2022
It’s time for an excursion to West Maui as we continue our series of posts on market conditions in different communities around the island. The focus of today’s post is Ka’anapali. This resort community experienced a boom in activity during 2021 with rising prices and a high volume of sales. How has the market been in 2022? Find out more below as we look at year to date numbers for 2022 with numbers from 2021 and 2019 provided for comparison. There are also a few thoughts on the outlook for the rest of the year and early 2023.
Ka’anapali Home Market Numbers
- Maui Realtors reported 20 homes sold for the year to date as of September 23. That is 59.2% less than the 49 sales reported over the same period of 2021. It is 11.11% higher than the 18 reported in 2019.
- The median price of homes sold in 2022 is $2,650,000. That is 11% higher than $2,387,000, last year’s median over the same period. It is 77.91% higher than $1,489,500, the median during the same period of 2019.
- The average price of the homes sold in Ka’anapali during 2022 is $2,855,552. That compares to an average of $3,017,891 and $1,994,037 during the same periods of 2021 and 2019 respectively. This year’s average is 5.38% lower than last year and 43.2% higher than 2019.
- 20% of this year’s buyers paid over asking price for their home and 45% paid asking price or above. In 2021, 12.24% of buyers paid over asking price and 28.57% paid asking price or above. In 2019, no buyers paid over asking price and 11.11% paid full price.
- Realtors reported 30% of sales were cash transactions.
- The highest priced transaction this year closed for $5,295,000. The property in the Lanikeha subdivision included a 3 bedroom, 3.5 bathroom home with 3,086 square feet of living space and a 1 bedroom, 1 bathroom, 508 square foot cottage on a .485 acre lot.
- The lowest priced sale for the year to date closed for $1,681,050. The bank owned property in Ka’anapali Hillside actually sold via online auction for 46.17% over asking price. The home needed serious repair and renovation.
- The Ka’anapali Hillside subdivision had the most sales activity with 6 closes. Lanikeha and the Summit were the next busiest with 5 transactions each.
Thoughts on the Home Numbers and the Outlook for the Rest of the Year and Early 2023
After a rip roaring 2021 for sales, transaction activity decreased sharply this year in Ka’anapali coming in just above the pre-pandemic levels of activity during 2019. That said, decreased volume is just one part of the story. There was enough demand that 45% of all home sales closed for asking price or above. That’s even more than last year. When compared to 2019 numbers, that 45% is particularly striking. Back before the boom of the last couple years, above asking price offers were exceptionally rare and just over 10% of the buyers paid full price.
Some of the decreased sales volume can be attributed to a scarcity of listings at lower price points and within a couple of higher priced Ka’anapali neighborhoods. There were no transactions or even inventory in the Pinnacle this year, and just two listing and no transactions in Ka’anapali Coffee Farms. At this time, there is no active inventory for less than $3,000,000, with the only 2 listings below that price under contract.
Inventory isn’t as big of an issue as you move up in price range in Ka’anapali. Fifty percent of all the active inventory is priced between $5,000,000 and $7,000,000. Thus far one home sold in that price range with one additional home listed above $5,000,000 under contract.
It is worth comparing the homes that sold for between $5,000,000 and $7,000,000 last year with the current inventory in this price range. Last year’s sales included two large homes on acreage in Ka’anapali Coffee Farms and a 6,575 square foot home in the Pinnacle. While size isn’t everything when it comes to value, this year’s $5,000,000 and up listings tend to be smaller homes on smaller lots than last year’s sales. The active inventory includes four homes in Lanikeha with the largest home coming in at 4,557 square feet and a home in Kaanapali Coffee Farms substantially smaller than both of last year’s highest priced sales in that neighborhood.
It is also worth noting that all of the active listings in this range appear to be spec builds. There are two more spec builds in Lanikeha priced between $4,000,000 and $5,000,000. This volume of spec building is almost unheard of in the Maui Luxury home market. It will be interesting to watch the sellers of these spec builds through the rest of the year, especially if we see additional shifts in the market and or the economy. I surmise that it may take some pencil sharpening for some of those properties to go under contract.
As for overall Ka’anapali luxury home market activity in late 22 early 23, inventory constraints at lower price points will impact sales volume. Any additional sales beyond the current pendings will mostly come via new inventory or price adjustments. Rising borrower costs may also curtail activity. While there is a fair amount of cash in the market, rate increases will impact affordability for some buyers. Negative economic news and declines in the equity markets could also cause some buyers to put second home purchases on hold.
Ka’anapali Condo Market Numbers
- As of September 23rd, Maui Realtors reported 123 condos sold in Ka’anapali for the year to date. That is 37% fewer than the 194 that closed over the same period of 2021. It is 14.95% more than the 107 that sold during the same period of 2019.
- The Median price of the condos sold for the year to date is $1,450,000. This is 52.63% higher than the median of $950,000 from last year over this same span. It is 63.66% higher than the median for the same period of 2019.
- The average price of the condos sold for the year to date is $1,724,465. That is a 31.67% increase over last year’s average through September 23rd. It is 54.15% above the 2019 average during the same time span.
- 23.58% of all of the condos sold thus far this year sold for over asking price, and 47.15% sold for asking price or above. That’s well above last year’s numbers of 8.76% over asking and 44.33% for asking price or above. Just to give some context as to what is was like pre-Covid, in 2019 only 2.8% of sales sold for over asking and 16.82% sold for asking price or above.
- Maui Realtors reported that 51.21% of all sales were cash transactions. That’s up a little over the 50% reported last year. Cash purchases were actually higher at 59.81% in 2019.
- The lowest priced condo to sell in Ka’anapali is a leasehold studio unit in Ka’anapali Shores that closed for $325,000.
- The highest priced condo to sell closed for $5,899,000. The 3 bedroom, 3 bath unit in the Konea Tower at Honua Kai has 2,280 square feet of living space.
- Honua Kai is the busiest condo development thus far this year with 37 closed transactions. Ka’anapali Shoes is second busiest with 20 sales for the year to date. The Masters had the third most inventory with 15 sales.
Ka’anapali Year to Date Review and Late 2022 Early 2023 Market Outlook
While the Ka’anapali Condo market for the year to date did not see a repeat a the astounding sales volume of 2021, it remained a busy market well above the levels seen in 2019. If anything, constrained inventory and continued demand made for a more competitive market than last year with more properties closing for over asking price. The market conditions meant continued upward pressure on prices.
As it stands, the vacation rental and second home condo market continues to be resilient as some other types of property on island start to feel a market shift. As of the 26th of September, there are only 17 active condo listings on the market in all of Ka’anapali. Limited inventory improves the position of sellers and continues to exert at least some upward pressure on pricing. It will be interesting to see how the limited supply balances out against demand. Again, the cash in this market makes it a little less interest rate sensitive, but there is still some impact. As of right now, a 30 year fixed on a vacation rental condo is being quoted as high as 8.5%. Needless to say, a lot of borrowers are opting for ARM products. Even those are a lot more expensive.
The chart above shows pending condo sales by month in Ka’anapali over the last five years. A few things worth noting when looking at the chart. The first things is that 2021 and 2020 are anomalies with 2019 and 2018 more normal markets. If you are wondering about the April 2018 spike in pending sales, the market got a boost from a new development, Honua Kai Luana Gardens Villas. It’s also worth noting that while 2022 pending sales started stronger than 2019 and 2018, monthly pendings for 2022 are running behind both 2019 and 2018 since May. The last thing is that while there is a little more activity in the first half of most years, the second half of the year sees steady activity. I would suspect that we will see “below normal” market activity through the rest of the year.
Based on inventory and seasonality, I would anticipate relatively limited sales volume to close out the year. With the amount of inventory available, the economy in flux and borrowing costs the highest since 2002, it looks like a quieter start to 2023 could be in order. We shall see what happens going forward.
Contact The Maui Real Estate Team
Contact The Maui Real Estate Team if you have questions about this post or if you need assistance buying or selling property in the Ka’anapali area. You can find all of the current active Ka’anapali Homes for Sale, Ka’anapali Condos for Sale and Ka’anapali Land for Sale on MauiRealEstate.com.
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September 2022 Paia Real Estate Market Update
Keep Austin Weird. Keep Portland Weird. Keep Paia weird. Yes, it’s time to check in on market conditions in Maui’s quirky North Shore beachtown. The Paia real estate market is doing it’s best to keep things strange with market behavior different this year compared to most other Maui communities.
This update focuses only on Paia and Kuau. Our local MLS lumps these areas together with the Spreckelsville neighborhood. We think that these markets are different enough that they merit their own discussions. If interested, we did a Spreckelsville update earlier this summer.
Notable Numbers from the 2022 Paia Real Estate Market
- As of September 19th, Maui Realtors reported 12 home sales and 1 condo sale during 2022. By comparison, there were 22 home sales and 3 condo sales during the same period of 2021. That is a 45% decrease in home sale activity. There were 12 home sales and 3 condo sales during the same period of 2019.
- Of the 12 homes sold this year, 3 homes sold for over asking price and one sold for full price. That is 33% of the inventory selling for asking or above. Last year, 6 homes sold for above asking price and 6 sold for full price. That is 54.5% selling for asking price or above. In 2019, no homes sold for over asking price while just under 42% sold for full price.
- Of the 12 homes that sold, 6 sold for cash. The listing realtor for the one Kuau condo sale also reported it to be cash transaction.
- The median price of homes sold in Paia is $969,999. That is 7.8% higher than last year’s median of $900,000 and 45.5% lower than the 2019 median of $1,411,562. Note, this is a classic case of how changes in median prices don’t necessarily reflect changes in values, particularly in a small market. Needless to say, prices rose substantially since 2019.
- The average sales price of the homes sold in 2022 is $969,166. That is 56.73% lower than the 2021 average of $2,239,886. It is 28.31% lower than 2019 average of $1,310,010.
- The lowest priced home sale for the year to date closed for $650,000. The 3 bedroom, 1 bathroom home with 1,440 square feet of living space on a 6,604 square foot lot is located in the Paia Halelani subdivision. It’s worth noting that the home needed significant repairs and updates when purchased.
- The highest priced sale in Paia for the year to date closed for $1,445,000. The 3 bedroom, 2.5 bathroom home with 1,512 square feet of living space is located on a 6,094 square foot lot in Kuau Bayview. It sold before hitting the MLS.
- Skill Village showed the most year to date sales activity of any neighborhood in Paia with 5 sales. Paia Halealani and Kuau came next with 2 sales each.
- The one condo sale in Kuau Plaza this year closed for $700,000. The one bedroom, one bath unit set a new all time record high in the complex. That’s particularly noteworthy since the previous high sale from last year is a 2 bedroom.
Making Sense of The Numbers
Maybe I am leaning into the weird theme a little too much. Paia’s sales activity compared to last year shows some similarity to a lot of other communities on island. Lower sales volume is common throughout the island due to both inventory constraints and slackening demand. There are really two numbers in Paia and Kuau that stand out as being unusual. The average sales price and the high home sales price both caught the eye. Both are well below not just 2021 numbers, but also 2019 sales numbers.
You can attribute both the average sales price and the low high sales priced to a lack of activity in the high end market. During the same period last year, there were 8 transactions that closed for more than this year’s high sale. That includes 3 sales for $8,000,000 or more. So what’s driving the lack of luxury market activity? Is it inventory? Is it demand? A combination of the two or something else?
Let’s look at the inventory side of things first. At first glance, inventory does not appear to be an issue. The list price of 5 out of 7 current active listings is over $2,000,000. All of those listings have over 100 days on market. Four additional listings over $2,000,000 were on the market in Paia this year but subsequently withdrawn. That could speak to lack of demand, but little to no high end demand goes against the grain compared to other high end market around the island.
Assessing demand isn’t straight forward. There may be buyers shopping for properties in this price range, but if the inventory in question or the price of the inventory in question does not appeal to the market, you aren’t going to see that demand reflected in the stats.
Let’s look at Paia and Kuau oceanfront activity. Last year, there were three sales on the water as of September 19th including 2 sales for $8,000,000 or above. Those transactions were two of the three highest priced sales in Paia and Kuau to date. High end buyers in the market for Paia or Kuau oceanfront had two oceanfront options this year. Both properties listed well above the all time high sales price.
Now, it certainly isn’t outside the realm of possibility to set new high prices in the current market. That said, it’s not too hard to make a case that the list price for both properties is well above market. The one listing, currently off the market, sold in 2021 for $5,200,000. Without significant improvements, the seller relisted for 90% higher than what they paid a year earlier. The other listing is now on the market for the 13th time since 2005. With now almost 3,000 days on market, you can safely say the market is providing some feedback on the list price.
Based on the above, it seems like some of the owners of Paia and Kuau’s higher priced listings may need to sharpen their pencils if they want to find the market. It’s worth noting that there is one listing for over $2,000,000 under contract. 2012 was the last year where there were no sales over $2,000,000 in Paia or Kuau.
Outlook for the Rest of the Year and Early 2023
Including the one pending transaction noted above, there are three total pending sales in Paia and Kuau at this time. So there should be at least some sales activity to close out the year. The question is what other market activity can we expect in Paia and Kuau. I look at recent demand for new listings, inventory and seasonality to try to get some sense of what we might expect the rest of the year.
When gauging current demand in a community, I like to look at the percentage of properties that go under contract within 10 days of coming to market. I will be honest, I am somewhat wary of how effective this metric is for a community like Paia and Kuau just due to the low sample size. Only two listings came to the market since August 1. One went under contract within 10 days, the other went under contract within a month. That would appear to suggest that there is still some demand out there, but again small sample size.
The available inventory is likely to be a limiting factor for activity. With just seven total listings, no listings under $1,000,000 and all active listings on the market for more than 100 days, it would seem activity will likely need to come via a combination price adjustments, negotiations or new inventory.
Last thing I wanted to look at is seasonality in the Paia and Kuau area. The chart above shows pending sales in the area by month over the last five years. While the first half of the year tends to be busier than the last quarter, December is typically a good month for sales activity in Paia. We shall see if that’s the case this year.
One last thing to note, recent interest rate hikes add head winds to the current market. While the Paia market is a little less exposed due to the percentage of cash transactions, the rate increases will impact affordability for financed buyers.
Contact The Maui Real Estate Team
Our office is located in Paia just off Baldwin Avenue. Needless to say, we keep close tabs on the Paia market. Contact The Maui Real Estate Team for assistance buying or selling property in the Paia area. We leverage our local knowledge, experience and connections to provide quality representation. Check out our Paia Real Estate Page to look at current inventory and to search by neighborhood.
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Kapalua September 2022 Market Update
By some margin, 2021 was the busiest year ever for transaction volume at the Kapalua Resort. Now that we are two-thirds of the way through 2022, we thought it might be a good time to check on market activity in this resort community located on Maui’s northwest coastline. This update looks at sales volume, pricing and more. It also looks at the outlook for the rest of the year and a slightly more long range outlook as the market slowly transitions back to “normal”.
Kapalua Home Market Numbers
The numbers below represent notable numbers for year to date home sales activity in Kapalua through September 5th, 2022.
- Maui Realtors reported 12 home sales over the last eight plus months. That is 50% of the 24 sales reported during the same period of 2021, and 25% below the 16 sales during the same period of 2019.
- Limited inventory played a pretty big role in the decreased sales volume compared to last year. While reduced demand may also be a factor, that is harder to show via the statistics.
- Two out of the twelve sales closed for over asking price. An additional four sales closed for full price meaning 50% of the transactions closed for asking price or higher. It is striking that only one of the 24 homes sold in the first eight months of 2021 sold for over asking price and only 3 more sales closed for asking price or above. Back in 2019, none of the year to date sales sold for full price let alone asking price.
- Of the twelve transactions, Realtors reported that seven of the buyers paid cash.
- The median price of the homes sold in Kapalua this year is $5,025,000. That is 25.31% higher than median of $4,010,000 for homes sold during the same period of 2021. It is 105% higher than the median sales price of $2,450,000 during the same period of 2019.
- The average price of the homes sold in Kapalua this year is $5,300,000. That compares to $4,886,354 and $2,364,000 during the same periods of 2021 and 2019 respectively. That means this year’s average is 8.47% and 124.2% higher than 2021 and 2019 respectively.
- The lowest priced home to sell for the year to date in Kapalua closed for $2,750,000. The 3 bedroom, 3.5 bathroom home in Pineapple Hill with 3,670 square feet of living space is located on a 10,703 square foot lot.
- The highest price sale for the year to date closed in August. The Pineapple Hill home has 6 bedrooms, 6.5 bathrooms and 7,784 square feet of living space on just under a half acre of land.
- Pineapple Hill tops the list for busiest subdivision for sales activity this year. Five homes closed in Pineapple Hill with two additional homes closing in Pineapple Hill Estates. Three homes closed in Plantation Estates and two homes closed in Mahana Estates. There’s been no inventory and no sales in Kapalua Place. There is one pending sale in Honolua Ridge.
Kapalua Condo Market Numbers
The numbers below are the most notable from Kapalua Condo sales through September 5th. It includes only condos in the complexes that are formerly located within the Kapalua resort and does not include condo developments that border Kapalua.
- Maui Realtors reported 51 condos sold for the year to date. That is 51.89% below the 106 sales reported through the same period of 2021. It is 15.9% more than the 44 closes during the same period of 2019.
- Again, it is pretty clear that constrained inventory played a role in the substantial decrease in sales compared to last year. It’s difficult to estimate the role decreased demand played in the lower number of sales. That said, it is worth pointing out that we had more sales this year with far less inventory than we did in 2019.
- Of the 51 sales, 12 or 23.53% sold for over asking price and 28 or 54.9% sold for asking price or above. By comparison, 3.77% and 30.19% of all 2021 sales over the same period sold for over asking price and at or above asking price respectively. Over the same period of 2019, 4.55% of all condos sold over asking with 34.09% selling for asking price or above.
- Of the 51 condos that sold thus far this year, Realtors reported that 24 out of 51 or 47.05% were cash transactions.
- The median price of the condos sold for the year to date is $1,450,000. Over the same period last year, the median was $1,145,000. That’s a 26.64% difference. The median during the same period of 2019 was $917,500. That is a 58% difference.
- The average price of condos sold in Kapalua through September 5th is $2,438,421. During the same period of 2021, the average price was 29.07% lower at $1,889,224. The difference in average between 2022 and the same period of 2019 is 15.50%. During that period, the average was $2,111,034.
- The lowest priced condo sale thus far this year in Kapalua closed for $940,000. That price bought the new owner a 1 bedroom, 2 bath with 972 square feet of living space in Kapalua Golf Villas.
- That was one of just three condo sales below $1,000,000!
- Kapalua’s highest condo sale for the year to date closed for $8,000,000 at Montage Kapalua Bay. That unit includes 3 bedrooms, 3.5 bathrooms and 2,904 square feet of living space.
- Kapalua Golf Villas was the busiest condo complex for transactions with 17 total sales. Montage and Kapalua Bay Villas came next with 9 sales each.
Outlook for the Rest of The Year in Kapalua
It’s time to get out the old crystal ball to see what we might expect in terms of sales activity in Kapalua for the rest of the year. Ok, ok maybe we will skip the crystal ball and try to use some other metrics that might give us some sense of market activity. When trying to gauge current market conditions, I like to look at demand for new listings and inventory.
Last month, five new condo listings came to market and one home came to market. Of the five condo listings, two were under contract in less than 10 days. That would appear to suggest that there is still some demand in the condo market. While overall demand on island might be feeling a crunch from interest rates, Kapalua is less likely to be rate sensitive. Keep in mind that just under 60% of this year’s home sales and just under 50% of this year’s condo sales in Kapalua were cash transactions.
The current inventory of listings remains limited. There are only 11 active condo listings in Kapalua and 4 pending sales as of September 5th. When you break it down by condo complex. There are no active listings in the Ironwoods or Coconut Grove. Both Kapalua Ridge and Kapalua Golf Villas have one active listing each and the Bay Villas has two listings. Only the Ritz Carlton Residences with three listings and Montage with four listings have any significant depth of inventory. On the home front, there are just five active home listings with one pending home sale.
One last factor to consider is seasonality. The charts below shows Kapalua home and condo pending sales by month in 2022, 2021, 2019 and 2018. In all of those years, the last four months of the year tend to see fewer properties going under contract.
Based on the inventory, demand and past seasonality, I would expect that sales activity for the rest of the year will be quieter than the first eight months. That said, I would venture there should be some demand for the limited inventory particularly in the the lower price points of the condo market.
Longer Term Kapalua Outlook
I mentioned at the start of the Kapalua discussion, that Kapalua was one of the markets that saw the greatest increases in demand over the last couple of years. That comes after a decade where Kapalua saw lesser demand than other resort markets. While Kapalua has always had its share of loyal fans, it tended to be a slower market. Days on market were longer and sales volume was lower. That started to shift a little at the end of the decade and it changed completely with Covid. As the market slowly moves toward normal, what does “normal” actually look like?
Maui Prep helped fuel part of Kapalua’s Covid period boom. The school was able to scale up enrollment to accommodate a large number of affluent families who took advantage of the work from anywhere movement. Many of those families ended up buying homes in Kapalua or other nearby areas of West Maui. The question of how much ongoing demand there will be from affluent remote workers remains something of an unknown.
I recently had the opportunity to pose the question about the future of the Kapalua market to an agent who lives and works in the community. I thought her answer offered some interesting insights. While Maui Prep came up, she also discussed the role of the Montage and the Ritz. She pointed out that the closure of the Kapalua Bay Hotel in 2006 and construction projects at the Ritz limited places to stay and the overall appeal of the area during the latter half of the 2000s. The foreclosure on the Ritz Carlton Club in 2013 didn’t help. When the Ritz Carlton Club redeveloped and rebranded as the Montage in 2014, it brought in new vacationers. Many of them developed loyalty to Kapalua and eventually became second home owners.
With those two anchor properties, the other agent thought this would provide a solid foundation for future demand in the community. For this and other reasons, she is very much a Kapalua Bull over the long term. It was an interesting answer and one I thought might be worth sharing with our readers.
Contact The Maui Real Estate Team
We will continue to provide periodic updates on the Kapalua market on this blog. If you are interested in Kapalua Properties, you can find the current inventory of Kapalua Homes for Sale and Kapalua Condos for Sale on MauiRealEstate.com. Contact The Maui Real Estate Team if you have questions on any of the listings or need assistance buying or selling a property in Kapalua.
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Maui Real Estate Market Musings Volume XVIII
Maui Market Musings Volume XVIII tackles the notable numbers from August 2022 Real Estate Sales on Maui. It even delves into a nuanced discussion of the (spoiler alert) decrease in median home prices on island and what it may mean. This edition originally included a discussion of Kapalua 2022 market activity, but I am not sure anyone would make it through the two subjects together without consuming dangerous levels of caffeine. Look for that post early next week. Without further ado…
Notable Numbers from the August Home Sales
With Labor Day passed, It’s a good time to took a look through the August Home Sale numbers. The numbers below are the most noteworthy with August 2021 and August 2019 data points provided for comparison. The numbers are different from the Realtor’s Association of Maui numbers because they exclude the islands of Molokai and Lani.
- Maui Realtors reported 82 homes sold in August of 2022. That is 32% lower than the 120 homes sold in August of 2021. It is 15.5% lower than the 97 homes sold in August of 2019.
- Of the 82 homes that sold, 14 or 17.07% sold for over asking price and 37 or 45.12% sold for asking price or higher. That is well below what we saw during August of 2021 when 40.83% sold for over asking price and 61.67% sold for asking price or higher. It’s still well above what the market was like in August of 2019. At that time, 11.34% of sales closed for over asking and 28.87% sold for asking price or above.
- Of the 82 homes sold, 21 or 25.6% of buyers reportedly paid cash.
- The median price of the homes sold in August is $1,037,500. That is down 2.4% from the August 2021 median of $1,062,500. The August 2022 median is 27.6% higher than the median price in August 2019.
- The average price of homes sold in August 2022 is $1,537,666. That is 10.9% lower than last August’s average sales price of $1,725,993. The August 22 average is 23.67% higher than the August 2019 average of $1,243,316.
- The lowest priced home to sell in August closed for $230,000. That is also the lowest sale on the island of Maui all year. The off market sale involved a 2 bedroom, 1 bathroom home with 1,012 square feet of living space on a 7,658 square foot lot. There were no photos or details on the condition of the home.
- The highest priced transaction in August closed for $7,900,000. The home in the Pineapple Hill subdivision of Kapalua has 6 bedrooms, 6.5 bathrooms and 7,784 square feet of living space.
- The home in Pineapple Hill was one of three sales over $5,000,000 and one of fourteen that closed for over $2,000,000.
Let’s Talk About Median Prices and Home Values
I would imagine the fact that this August’s median is lower than last August’s median raised a few eyebrows. Does mean that we may be seeing values decrease? I think this merits some discussion.
If you are a long term reader of this blog, you will know that I am wary of tying shifts in median price to shifts in home values. The composition of sales can be a big driver of month to month shifts in median prices. A lot of lower priced homes selling in a month could drive down median prices while more high end sales may drive up median prices. Maui’s not the easiest real estate market for tracking changes in price. The volume of sales is relatively low and the inventory is heterogeneous. Even some of our more cookie cutter subdivisions have variability in views and location that can impact value.
I like quantitative evidence a lot more than anecdotal evidence. At this point, I can’t point to any clear numbers that support price drops. That said, a case can be made that some homes on Maui that sold during the first five to six months of this year would sell for less now. Competition remained fierce in the first quarter and bidding wars were common. Borrowing costs were still a lot lower than they are now. Investors were still active. FOMO or fear of missing out on low borrowing costs and limited inventory meant buyers bid aggressively pushing up prices.
Fast forward to this summer and the dynamic changed. The pool of buyers is significantly smaller due to higher borrowing costs and an absence of investors. We are definitely past the FOMO phase of the market. With a lot less buyer demand, we are starting to see some properties struggling to sell. While I know this is speculative, I surmise that some of these properties that are sitting would have attracted multiple buyers earlier in the year. The competition would have pushed prices upwards. Without competition, some of these are sellers are needing to reduce prices.
Now, does this mean home prices are going down across the board? Absolutely not. At this point, I would argue that this is a phenomenon limited to lower price points in the market. In particular, it is confined to lower priced properties with flaws that FOMO buyers forgave, but current buyers are less willing to accept. There are other market segments where inventory is starting to build. I could see those parts of the market start to see drops in value, but we aren’t there yet. It is also worth pointing out at that this market is incredibly variable. Above asking price sales are still higher than they were pre-Covid and there are still still homes closing for all time neighborhood highs.
Will we start to see more broad based decreases in value? That’s tough to say. We share one attribute with some of the markets that are seeing downward pricing pressure and that is we had a high number of work from anywhere relocations. What differentiates us from the markets that are seeing price decreases is our current lack of inventory. We are still well below 2019 inventory levels with no clear relief in sight. Ultimately, the balance between supply levels and demand will dictate our price trajectories. It’s also likely that this balance will continue to vary by community and by price point.
Notable August Condo Sales Numbers
I present the condo numbers with the same framework as the home sale numbers. They differ from the Realtor’s Association of Maui statistics because they exclude the islands of Molokai and Lanai.
- Maui Realtors reported 103 condos sold in August 2022. That is a 44.9% drop from the 187 sales in August 2021. It is 13.45% lower than the 119 condos sold in August of 2019.
- Of the 103 condos sold, 21.36% sold for over asking price and 45.63% sold for asking price or above. In August of 2021, 27.81% sold for over asking and 66.84% sold for asking price or above. In August of 2019, 12.5% sold for over asking price and 39.17% sold for asking price or above.
- Of the 103 condos sold, 52 or 50.49% paid cash.
- The median price of the 104 condos sold last month is $820,000. Last month’s median is 26.15% higher than the August of 2021 of $650,000. It is 60.78% higher than the August 2019 median of $510,000.
- The average price of condos sold in August 2022 is $1,233,249. That is 30.88% higher than the average sales price of $949,939 in August of 2021. It is 40.09% higher than the 2019 average sales price of $887,539.
- The lowest priced condo to sell in August of 2022 closed for $150,000. The 1 bedroom, 1 bathroom unit is located in the Harbor Lights Condominium in Kahului.
- The highest priced condo to close in August of 2022 sold for $9,200,000. The 4 bedroom, 4.5 bathroom condominium with 4,817 square feet of living space is located in the Kula Villas complex within the Makena Golf and Beach Club.
- The Kula Villas sale is one of five transactions that closed for $5,000,000 or higher and one of seventeen sales that closed for more than $1,500,000.
A Few Comments on the Condo Numbers
Since we broached the subject of home values, I might as well go down the worm hole of discussing condo values. There is a pretty clear contrast in this month’s median home and condo prices. While median home values are below August 2021, the median condo value is well above August 2021. Again, changes in median prices don’t always reflect changes in values.
However, the condo market remains more resilient than the home market on island. I am continuing to see upward pressure on prices in the vacation rental and second home condo market. Demand for the limited inventory remains strong. Some of the condo properties geared toward island residents like Kihei Villages and Southpointe seem to be losing the steam that they had earlier this year. Plain and simple, this part of market is cooling faster than other parts of the condo market due to affordability. If borrowing costs remain closer to 6% or higher and inventory grows at all, this part of the market could also start to see decreasing values. Like the home market, this ultimately depends on the balance between supply and demand.
Some Maui Beauty to Brighten This Post
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Contact The Maui Real Estate Team with questions, comments or feedback or if you need assistance buying or selling property on Maui. Market conditions on island are varied and dynamic. Now more than ever, it’s important to have experienced and savvy representation. We look forward to hearing from you to answer questions and learn more about your real estate needs.
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Maui Market Musings Volume XVII
This is our seventeenth Maui Market Musings. This edition continues to focus on the metrics that give us the best indication of current market conditions. Those three metrics are inventory, price reductions and how quickly properties are going under contract. Discretion was the better part of valor and I am going to hold off on my Kapalua market update for either the next musings or a stand alone post. I imagine people have more to do over the holiday weekend than reading a 3,500 word manuscript on the Maui Real Estate Market. Without further ado…
End of Month Inventory of Maui Single Family Homes
|$750,000-$999,999||32||63||25||62||31 (+6)||44 (-18)|
|$1,000,000-$1,499,999||43||37||65||34||58 (-7)||28 (-6)|
|$1,500,000-$1,999,999||44||22||41||19||46 (+5)||13 (-6)|
|$2,000,000-$2,999,999||34||15||31||19||36 (+5)||12 (-7)|
|$3,000,000-$4.999,999||27||10||25||9||32 (+7)||11 (+2)|
|$5,000,000-$9,999,999||23||8||24||7||26 (+2)||5 (-2)|
|Totals||241||169||239||156||256 (+17)||124 (-32)|
|Haiku||20||13||22||11||20 (-2)||7 (-4)|
|Hana||4||2||4||1||8 (+4)||2 (+1)|
|Kahului||8||27||13||21||11 (-2)||25 (+4)|
|Kihei||45||22||48||14||44 (-4)||16 (+2)|
|Kula||25||13||19||16||24 (+4)||10 (-6)|
|Lahaina||20||18||18||14||23 (+5)||7 (-7)|
|Makawao||13||12||14||9||15 (+1)||11 (+2)|
|Napili/Kahana/Hono…||12||3||10||6||14 (+4)||4 (-2)|
|Pukalani||12||7||7||6||8 (+1)||5 (-1)|
|Spreckelsville/Paia||11||2||10||2||15 (+5)||3 (+1)|
|Wailea/Makena||13||4||15||5||16 (+1)||4 (-1)|
|Wailuku||39||33||39||35||41 (+2)||22 (-13)|
End of August Home Inventory Review
The information above is provided with the usual framework. The home inventory data by price point includes all of the island of Maui, but excludes the islands of Molokai and Lanai. The district information is limited to the districts with the most activity.
- The inventory of active home listings on Maui actually increased approximately 7% since the last day of July. This comes on the heels of a decrease in active listings in July.
- Active inventory decreased in only two price ranges.
- Pending sales dipped again. Pending listings are 21% lower than the end of July and 27% below the end of June.
- Pending sales increased in only the $3,000,000 to $4,999,999 price range.
- Looking at the different price ranges, the $750,000-$999,999 price point stands out. Through the market boom of the last couple of years, you could make an argument that this was among the most competitive price points. Needless to say, this is a very different market now. The increase in interest rates reduced affordability for local buyers, and many investors seem to be sitting on the sidelines. As of today, 56% of the active listings in the range reduced their asking price at least once. Sellers are needing to adjust their price to the new realities of the market.
- Looking at the different communities around the island, the month to month shifts in the trajectory of inventory are notable. A number of places where inventory increased between June and July, decreased between July and August and vice versa. I would suspect we might continue to see this pattern moving forward.
- Kihei home inventory is notable for it’s month to month decrease after steady and significant growth in active listings over the previous months.
- Resort market inventory saw limited changes in active inventory. Ka’anapali and Kapalua both have one fewer active listings while Wailea has one more.
End of August Maui Condo Inventory
|$250,000-$499,999||19||25||11||23||14 (+3)||17 (-6)|
|$500,000-$749,999||31||40||43||39||34 (-9)||43 (+4)|
|$1,500,000-$1,999,999||28||34||30||33||24 (-6)||35 (+2)|
|$2,000,000-$2,999,999||20||36||20||36||22 (+2)||38 (+2)|
|$5,000,000-$9,999,999||11||3||10||3||8 (-2)||1 (-2)|
|Totals||199||247||205||234||181 (-24)||233 (-1)|
|Ka’anapali||23||15||24||13||25 (+1)||16 (+3)|
|Kahului||4||3||2||8||3 (+1)||7 (-1)|
|Kapalua||12||9||10||10||11 (+1)||6 (-4)|
|Kihei||55||74||67||60||50 (-17)||63 (+3)|
|Lahaina||16||5||16||8||9 (-7)||10 (+2)|
|Napili/Kahana/Hono||48||34||40||34||45 (+5)||25 (-9)|
|Wailea||23||85||25||82||24 (-1)||86 (+4)|
|Wailuku||12||12||14||13||9 (-5)||14 (+1)|
End of August Condo Inventory Review
Again, the tables above come with the usual framework for our end of month inventory. The table by price point includes all condos on Maui, but it does not include condos on the islands of Molokai or Lanai. The table with districts is limited to the communities with the most activity. Pending sales at La’i Loa at Wailea Hills skew the data in Wailea and the $1,500,000-$5,000,000 price ranges. There are 75 pending sales in that development based on contracts penned in 2020 and the first quarter of 2021. Pending sales in La’i Loa won’t start to close until sometime in 2023. Paradise Ridge Estates in Kihei also skews the data albeit to a lesser extent. There are 18 pending sales with that development based on contracts penned between 2018 and the first quarter of 2022. Those should start closing in the not too distant future.
- After steadily increasing over the last few months, active condo listings at the end of August dropped 12% from the end of July.
- Pending condo sales were virtually unchanged with only one fewer pending sale at the end of August compared to the end of July.
- Looking at the data by price range, active inventory only increased between $250,000-$499,000 and between $2,000,000 and $2,999,999. The biggest drops in active inventory occurred between $500,000 and $999,999 followed by $1,500,000 to $1,999,999.
- Kihei continues to be one of the more dynamic communities when it comes to inventory. Much like Kihei Home inventory, Kihei Condo inventory dropped significantly since the end of July. That comes on the heels of seeing the largest increase over the months prior. Pendings increased as well. Without doing a really thorough comparison of the month to month inventory, it’s hard to say if this is variability or sellers adjusting their pricing and buyers responding.
- The Napili, Kahana and Honokowai condo inventory took the opposite trajectory from Kihei with pending sales dipping substantially and active listings increasing on the month.
- The change between the end of the month active inventory in the resort markets was nominal. Wailea’s active inventory increased by 1 and both Kapalua and Ka’anapali decreased by 1. Pendings increased in both Ka’anapali and Wailea while the Kapalua pending sales dipped.
One final thing worth noting about home and condo inventory, September 1 marks something of a seasonal shift on Maui. Labor day is the end of our summer tourist season. Traditionally, real estate activity on island slows a little in the early fall. This is a time when some sellers take a break from the market. Eleven home and condo listings either cancelled or expired on September 1 after the numbers for the charts above were compiled. We also tend to see a little less in the way of new inventory. One would think that would be the case this year, but there are fewer certainties in this day and age.
Checking in On Price Reductions
Nationally, there is some discussions of price reductions starting to level off after steady growth over the last few months? What about Maui? Looking at the inventory as of September 2nd, 42.97% of all active home listings reduced their price one or more times. On August 15th, 39.67% of active homes reduced their price. On July 4th, that number stood at 34.03%.
In the condo market, 27.84% of all active listings reduced their price. That is actually a decrease from 29.62% on August 15th. For further context, 24.63% of the active condo listings had a reduced asking price on July 4th.
It’s worth noting, that some parts of the market have more price reductions than other. There is a fair amount of variability in the market by district and price point. One example being homes in the $750,000-$999,999 price range which I mentioned earlier.
How Quickly Are Things Going Under Contract?
Another metric that gives a pretty good sense of current demand and market conditions is the rate at which properties go under contract. Specifically, we look at what percentage of properties go under contract in ten days or less. We started tracking this in February when market conditions were particularly frenzied. At the time, 56% of all properties went under contract within 10 days. Of the listings that came to market between August 10th and August 17th, 29.79% went under contract within 10 days. That’s actually up a little from the last period we tracked between July 25th and August 1st when 22.45% went under contract within 10 days or less of coming to market.
Looking specifically at homes, 30.43% of the new listings between August 10th and 17th went under contract in 10 days or less. For comparison’s sake, between August 10-17, 2021, 50% of new inventory went under contract in 10 days or less. For a pre-covid reference point, it was 15.15% of new home listings between August 10th – August 17th, 2019 . I do want to mention that this seems to be an anomalously low week. Other recent 2019 comparisons came in around 25%.
For condos, 29.17% of the new listings between August 10th and August 17th went under contract in ten days or less. During the same time span of 2021 and 2019 respectively, the numbers came in at 58.33% and 30.43%.
Overall, we are well below last year’s frenzy. While we may have fewer buyers and sellers, the overall absorption of new properties is similar to what we experienced before Covid.
One other variable relevant to market conditions is interest rates. Recent movement in the bond market pushed interest rates on the 30 year fixed mortgage back up over 6%. This is the first time mortgages hit that rate since June. From recent discussions with mortgage brokers, many borrowers are opting for 10 year ARMs to lower monthly payments. That said, regardless of the mortgage product borrowing costs are significantly higher now than they were 12 or even 6 months ago. That is going to have a big impact on affordability.
Some Musings Eye Candy From Maui’s Sandy Shores
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Questions, comments or feedback? Contact The Maui Real Estate Team to discuss the latest market musings or if you need assistance buying or selling Maui Real Estate. Our experienced team of agents is well suited to assist buyers and sellers in the current dynamic market conditions. We look forward to hearing from you and discussing your real estate needs.
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Maui Market Musings Volume XVI
Sweet sixteen! This is the 16th edition of our almost weekly look at the Maui Real Estate market. This latest edition is highlighted by our monthly inventory check. We break down end of the month home and condo inventory by both community and price point. We also check in on the percentage of the active inventory with price reductions, and the percentage of new listings going under contract in ten days or less. Collectively, the three metrics give us a better sense of current market conditions. Last but not least, this edition highlights a couple of national perspectives on the real estate market.
Inventory Watch for Single Family Homes
|<$750,000||6||22||6||16||11 (+5)||14 (-2)|
|$750,000-$999,999||19||54||32||63||25 (-7)||62 (-1)|
|$1,000,000-$1,499,999||43||37||58||34||65 (+7)||25 (-9)|
|$1,500,000-$1,999,999||30||27||44||22||41 (-3)||19 (-3)|
|$2,000,000-$2,999,999||37||14||34||15||31 (-3)||19 (+4)|
|$3,000,000-$4.999,999||24||11||27||10||25 (-2)||9 (-1)|
|$5,000,000-$9,999,999||22||8||23||8||24 (+1)||7 (-1)|
|Totals||193||176||241||169||239 (-2)||156 (-13)|
|Haiku||15||12||20||13||22 (+2)||11 (-2)|
|Kahului||11||24||8||27||13 (+5)||21 (-6)|
|Kihei||27||25||45||22||48 (+3)||14 (-8)|
|Kula||24||12||25||13||19 (-6)||16 (+3)|
|Lahaina||15||15||20||18||18 (-2)||14 (-4)|
|Makawao||11||17||13||12||14 (+1)||9 (-3)|
|Napili/Kahana/Hono…||12||5||12||3||10 (-2)||6 (+3)|
|Pukalani||5||12||12||7||7 (-5)||6 (-1)|
|Wailea/Makena||8||5||13||4||15 (+2)||5 (+1)|
End of July Home Inventory Review
Here are some notes about the data above to provide some framework. The price range chart includes all of the island of Maui, but not the islands of Lanai or Molokai. The list of districts above is limited to those with the most activity.
- After seeing an increase in inventory in June, the inventory of active home listings actually decreased in July by approximately 1%. We just aren’t seeing the substantive increase in home inventory that many mainland markets experienced this spring and early summer.
- The decrease in pending sales continues. Pending sales are 8% below the end of June and 12% below the end of May.
- Looking at the different price points, I think the two most notable price ranges are homes priced below $750,000 and listings between $1,000,000 and $1,499,999.
- The below $750,000 range turned my head at first glance. The “entry point” to the Maui market’s been one of the most competitive parts of the market for some time. When I looked at the actual inventory, the increased inventory in this range consists of properties that need a lot of work. Fix and flip buyers who might pursue opportunities like this seem to be less active.
- The $1,000,000 to $1,499,999 price range is the one segment of the market that saw increases in inventory in both June and July. Inventory at the end of July is 51% higher than it was at the end of May. This price range also had the biggest drop in pending sales over July. This is a price range that is likely feeling the effects of affordability challenges. It is out of reach for most Maui residents particularly with higher borrowing costs.
- The $2,000,000-$2,999,999 price range is the one market segment that saw an increase in pending sales.
- Looking at the different communities around the island, Kihei is noteworthy for both an increase in inventory and a decrease in sales. Inventory is up 77% from the end of May and pending sales are down 37%. Billy and I were discussing why Kihei may be seeing the biggest increase in inventory. It’s hard to say definitively. That said, we both noticed a fair amount of aspirational pricing among the active inventory.
- The other thing to note about the community chart is some of the variability evident. Some places that saw increased inventory last month saw decreases this month and vice versa. With these small sample sizes, I surmise we may continue to see month to month shifts in a number of communities.
Inventory Watch for Condos
|$250,000-$499,999||12||23||19||25||11 (-8)||23 (-2)|
|$500,000-$749,999||18||55||31||40||43 (+8)||39 (-1)|
|$1,000,000-$1,499,999||23||49||29||30||30 (+1)||31 (+1)|
|$1,500,000-$1,999,999||21||34||28||34||30 (+2)||33 (-1)|
|$3,000,000-$4,999,999||12||22||11||25||12 (+1)||18 (-7)|
|Totals||149||293||199||247||205 (+6)||234 (-13)|
|Ka’anapali||23||23||23||15||24 (+1)||13 (-2)|
|Kahului||5||8||4||3||2 (-2)||8 (+5)|
|Kapalua||7||15||12||9||10 (-2)||10 (+1)|
|Kihei||35||95||55||74||67 (+12)||60 (-14)|
|Wailea/Makena||16||91||23||85||25 (+2)||82 (-3)|
|Wailuku||9||11||12||12||14 (+2)||13 (+1)|
End of July Condo Inventory Review
The price points table includes all condos on Maui, but it does not include condos on Molokai or Lanai. The table with districts is limited to the districts with the most activity. As mentioned in previous musings that look at inventory, pending sales at La’i Loa at Wailea Hills skew the data in Wailea and the $1,500,000-$5,000,000 price ranges. There are 75 pending sales in that development based on contracts penned in 2020 and the first quarter of 2021. Pending sales in La’i Loa won’t start to close until sometime in 2023.
- After a big 33% jump in inventory between the end of May and June, the inventory of active listings increased a modest 3% by the last day of July.
- Pending sales also continued to drop with a 5.3% decrease in pending sales on July 31st compared to June 30th. That compares to the 16% drop between the end of May and the end of June.
- When you hone in on the different price points, only 4 out of 10 of the price ranges actually experienced increases in inventory. Two of the four only increased by a single condo.
- The lion’s share of the increase in inventory occurred in the $500,000 to $749,999 price range. Looking at the listings in that price range, the majority of those units are non-vacation rental condos geared toward island residents. This segment of the market showed surprising resiliency as rates increased. It seems to be cooling with inventory and days on market both increasing.
- Pending sales decreased across 5 of 10 price points. The $3,000,000 to $4,999,999 price range experienced the largest dip in activity with 7 fewer pending sales.
- Looking at the inventory changes by community, Kihei stands out with the biggest increase in active listings and the biggest decrease in pending listings. Again, I am not sure I can pin point a single reason. As with Kihei homes, I surmise sellers with aspirational pricing play a part. There are also quite a few non-vacation rental Kihei Condos in that $500,000-$750,000 range.
- The Napili, Kahana and Honokowai area took a different trajectory from Kihei with 8 fewer listings on the market.
- Looking at the resorts, Ka’anapali and Wailea both saw modest increases in inventory while Kapalua inventory decreased modestly.
While inventory remains limited, we are seeing an increasing number of price reductions. As of August 15th, a total of 39.67% of active home listings reduced price one or more times. That compares to 34.03% as of July 4th. In the condo market, 29.26% of condo listings reduced asking price as of August 15th. On July 4th, 24.63% of all condo listings reduced list price.
It’s worth taking a minute to delve into exactly what an increase in price reductions might mean. To be honest, it really varies on a case by case basis. It’s pretty clear that a number of sellers in this market priced with first quarter market conditions in mind. During that time, prices increased upwards rapidly. Sellers could get away with being ambitious. Fast forward 5 months and the rate of appreciation is slowing significantly. If someone wants or needs to sell sooner, they are going to have to price closer to recent comparable sales. More sellers hoping that frothy market conditions continued into the 2nd and 3rd quarter are adjusting their expectations.
It’s also worth noting that pricing on Maui can be challenging. There is enough heterogeneity in the market that even sellers trying to price near comparable sales can miss the mark. If sellers and their agents struggle to value a property due to its unique characteristics, they may need to receive market feedback and adjust accordingly.
At this point, the price reductions that occurring appear to be sellers either the ambitious adjusting expectations or those struggling to come up with a value responding to the market. I haven’t seen any price reduction data that shows sellers on Maui adjusting prices below recent comparable sales. If we do start to see any shifts in value, it is likely going to occur first in the pockets of the market where inventory is higher.
Demand for New Listings
In February, we started tracking what percentage of properties went under contract in ten days or less. Back then, 56% of all listings went under contract within 10 days. That percentage slowly decreased throughout the spring with a more pronounced shift after interest rates spiked above 5%. For the period between July 25th and August 1st, the number dipped down to 22.45% of all active listings. For comparison, 50.94% of all new listings went under contract within 10 days between July 25th and August 1st of 2021. During the same period of 2019, 28% of new listings went under contract within 10 days of coming to market.
There is some discrepancy between homes and condos for this metric. For the 25th through the 1st, 26.92% of new condo listings and 17.36% of homes went under contract within 10 days of hitting the market. Again for comparison’s sake, between 7/25/21 and 8/5/21, 48% homes and 57% of condos went under contract within 10 days or less of being listed. For the period between 7/25/19 and 8/1/19, 25% of homes and 30.23% of condos went under contract within 10 days or less of being listed.
The numbers above would suggest that market conditions are definitely a lot cooler than earlier this year or this time last year. It would also seem to suggest that the market is cooler than pre-covid conditions in 2019. That said, it is worth noting that 2019 was a pretty strong year for real estate on island.
A Few National Real Estate Perspectives Worth Sharing
It’s been a while since we posted some national perspectives on the real estate market. I thought it might be worth sharing some thoughts I recently came across on social media.
I am not sure that the tweet above is a new perspective to all of our readers, but I thought it was one worth reiterating. While there’s been a demand slow down across the board in the national market, local market conditions are strongly impacted by available inventory. Some former hot spots for real estate appreciation are seeing stronger market shifts and signs of price decreases as inventory ballooned over the last few months. Other places where inventory growth remains limited aren’t experiencing downward pressure on pricing. Maui more closely resembles the latter than the former.
If you have a little time, I also included this video from the folks at Altos Research. It discusses some of the recent changes in their market analysis and forecasts as the rate of inventory growth is slowing around the country.
They suggest that the chances of broader price reductions are lowering due to the more limited inventory growth. It will be interesting to compare their current projections to the actual conditions in the fall market.
Some Maui Beauty to Brighten Your Post
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If you have questions or comments on this post, Contact The Maui Real Estate Team. Thinking of buying or selling property on Maui? Call us or send us an e-mail, we would welcome the chance to sit down with you to discuss your real estate needs.