Category: New Maui Developments
Maui Real Estate Blog
Maui Market Musings Volume II
This week’s edition of Maui Market Musings is another grab bag of topics. I look at days on market on Maui, try to get a sense of price increases since the start of Covid and check in on sales activity at Hoku’ula, the new development in Upcountry Maui.
Properties Continue to Move Quickly
One way of gauging the strength of the Maui market is looking at days on market. The local Realtor Association publishes days on market for sold properties. I wanted to use data from recently listed properties for a more current look at market activity. Between February 9th and February 16th, 71 listings came to market. Of the 71 listings, 40 already went under contract. Of the remaining 31 listings, 7 are waiting to review offers until a later date or are in the process of reviewing offers. One bank owned listing successfully completed an auction with the buyer and the bank completing contract paper work. Two additional listings are vacation rentals with no opportunity for showings as of yet.
We are seeing things go under contract really quickly. What does this mean for buyers? Over 50% of properties are going under contract in 10 days or less. Many sellers are setting offer deadlines a week after listing to allow for strong showing demand. Multiple offers are common. Buyers who want to enter the fray need to have pre-approvals and proof of funds in hand. They also need to prepare to write very strong offers.
How Much Have Property Values Increased on Maui?
How much have prices gone up since the start of Covid? This is one of the most common questions people ask about the Maui market. This is a surprisingly difficult question to answer. The Maui market is incredibly heterogeneous. While changes in median price give some indication of changes in value, it isn’t an exact indicator. Changes in median prices aren’t just due to changes in price. Differences in the composition of the market in any one month also contribute to changes in median. For example, if you have a greater proportion of higher end homes selling in any one month, median prices will tend to go up.
With that in mind, I thought I would do my best to try to get a better sense of how much prices changed since early 2020. To do that, I went through the sales over the last month and compared them to sales during the same period of January and February 2020. I tried to find as many like for like properties to compare from each of the two time frames. Truth be told, the list of properties that fit that criteria is surprisingly small. Here are some of the properties I identified, notable differences if any, their sales prices and the percentage change.
Comparing Early 2020 and Early 2022 Home Prices
- The first example I found was actually a home that sold on January 31st of 2020 and sold again on February 9th of 2022. 24 W Makaukau Loop is located in the Waikapu Gardens subdivision of Wailuku. The seller made one notable improvement during their two years of ownership. They added a photovoltaic system with a Tesla Powerwall. It closed for $731,000 in 2020 and $990,000 in 2022. That is a 34% difference. If you add roughly $35,000 for the improvements, you are looking at a 29.4% increase in value.
- I found two very similar homes in the Pi’ilani Villages subdivision in Kihei that sold in 2020 and 2022 respectively. 38 Polale and 62 Polale are both three bedroom, two bathroom homes with 1,478 square feet of living space. Both homes have net metered photovoltaic systems. and new flooring. The home at 38 Polale has original bathrooms, while the home at 62 Polale includes nicely remodeled bathrooms. The lot at 38 Polale is 300 square feet bigger. The home at 38 Polale sold in early 2020 for $756,000. The home at 62 Polale sold in early 2022 for $1,100,000. That is a 45.5% difference in value. Regardless of the bathroom improvements, this is a big shift in values.
- While the next two homes don’t offer a true apples to apples comparison, they are still worth sharing. Both homes are in Kaimana at Kehalani. This is a subdivision with a single developer and a handful of different floor plans. The first home is a 4 bedroom, 3 bath with 2,021 square feet of living space and a Photovoltaic system. The home is located on a 4,500 square foot lot. The second home is 3 bedrooms, 2 bathrooms with 1,185 square feet of living space. It is also situated on 4,500 square foot lot. The 4 bedroom home sold in early 2020 for $725,000. The second sold for $815,000. That is a 12% higher sales price for a home that is 41% smaller.
Comparing Early 2020 and Early 2022 Condo Prices
- The first two condos I wanted to compare are located in the same floor of the same building at Aina Nalu in Lahaina. They are both 2 bedroom, 2 bath unit with 832 square feet of living space. Unit C 203 sold in early 2020 for $599,000. The seller did add some new flooring and there was some sort of bamboo ceiling covering added in parts of the condo. Unit C 209 was almost identical minus the improvements. It sold in early 2022 for $766,000. That is a 27.8% price increase. It is worth noting that Aina Nalu was one of a small handful of condos that actually saw prices go down in mid 2020. During that time, second floor two bedrooms went as low as $500,000. The level of appreciation is that much higher if you factor in that price adjustment.
- Kai Malu is an upscale non-vacation rental condo in Wailea. There is variability in value within the complex based on location and view. I found two condos with the same 3 bedroom, 2.5 bathroom floor plan in different parts of the development. Both are considered to be good locations. They both overlook the golf course with the ocean in the distance. Unit 5A sold in late January 2020 for $1,700,000. Unit 55B is a little more upgraded unit with some more recent renovations. It sold for $2,200,000 in early February. That is a 29.4% increase in sales price.
- Kihei Villages is an entry level condo complex that prohibits short terms rentals. I found two pretty similar ground floor units for comparison. Both have two bedrooms, one and a half baths and 750 square feet of living space and an enclosed yard area. Unit 10-103 had some improvements in the kitchen, but bathrooms appeared to be original. It sold in February of 2020 for $365,000. Unit 34-103 was well maintained with a nice yard, but no upgrades to the kitchens or bathrooms. It sold for $535,000 in February of 2022. That is a 46.5% difference in value.
- I compared two one bedroom, one bath listings in building 2 at Maui Vista. This is a vacation rental friendly condo in Kihei. Both units appeared to be in original condition. Unit 2203 sold for $420,000 in February of 2020. Unit 2308 sold for $572,000 in January. That is a difference of 36.19%.
While this is a relatively small sample size, it does provide both homes and condos over a pretty broad area of the island. Overall, here are my takeaways from this number crunching exercise. You are looking a bare minimum of 27% appreciation over the last two years with some properties seeing more significant increases. There is some variability in appreciation around the island. While all these prices are moving in the same direction at this point,some are taking a little longer to get there.
The significant price increases appear to be continuing. Anecdotally, bidding wars feel that much more competitive of late. In turn, it feels as if values skipped up on some of the properties going under contract over the last few weeks. It will be interesting to see if the sales numbers corroborate this in the months ahead.
Hoku’ula Lottery Update
Last week I posted about the lottery for first phase of the market priced listings at Hoku’ula. This development in Hali’imaile is one of the largest developments ever in Upcountry Maui. It will include 196 total homes with 98 work force housing homes and 98 market rate housing homes. The work force housing units are fully reserved. The developer held a lottery for the first phase of the market rate housing at the end of last week. Per the developer’s representatives, 15 homes went under contract as a result of the lottery. That is half of the 30 homes in the first phase. Registrations for the first phase may still be submitted. Contact The Maui Real Estate Team for buyer representation if you are interested in the development.
Well, so far so good on making this a regular feature of our blog. We are hoping that this is valuable tool for buyers and sellers trying to get a better sense of the market. Feel free to reach out if there are any specific things you might want us to discuss in future volumes of the musings. Contact The Maui Real Estate Team if you need assistance buying and selling property.
Maui Real Estate Blog
Hoku’ula February 2022 Market Housing Lottery
Hoku’ula, the newest subdivision in Upcountry Maui, will be conducting its first lottery for market priced housing this month. Registrations for the first phase lottery are due by 5:00 PM on Thursday, February 17th. The developer conducts the actual lottery the following day on the 18th. That means late registrations will not be considered. Those interested in the lottery need to fill out a registration form for the development, and provide a pre-qualification letter from a lender or proof of cash funds for cash purchases. Contact The Maui Real Estate Team for buyer representation and assistance with submitting the lottery registration form.
Here are a few more things to note about the first phase lottery:
- The price of homes in the first phase range between $1,285,000 and $1,650,000.
- The lottery itself is not a public event.
- A list will be created based on the order in which lottery numbers are drawn.
- Those that remain on the list will not need to apply for future lotteries.
- Lottery positions may not be transferred to another buyer.
- At this time, I have yet to see any concrete numbers for the number of houses being released in the first phase.
If a lottery participant’s number comes up high enough to be part of the first phase, the developer sales team will be contacting buyers and their representatives for contract signing and lot selection on Saturday the 19th. The buyer will need to make a $10,000 initial deposit due upon contract signing. The buyer has a 30 day contingency/review period from the contract signing. At the end of the 30 day period, the buyer owes a second deposit of 15% of the purchase, minus their $10,000 initial deposit.
Check out our Hoku’ula Subdivision page for more information on the development and a handful of listings representative of what is available in the development. Contact The Maui Real Estate Team for buyer representation for the Hoku’ula lottery. We are happy to assist in helping you with registration forms. If you haven’t been pre-qualified to date, we will also be happy to help you find a lender.
Maui Real Estate Blog
Weekly Maui Real Estate Market Report October 5th
Pending Sales Hit a High Since the Start of Covid and Other Notable Numbers
The only thing we can expect at this point is the unexpected. True words when it comes to the state of the world. While Maui is a lot less turbulent than much of the world, these words resonate as I comb through the data from the latest seven day tracking period. Weekly new pending sales were the highest since the start of Covid-19. Closed transactions were again surprisingly lower. New listings are down a little from the week prior. Keep reading for more details on this week’s numbers.
This Week’s New Pending Sales
Maui Realtors reported 67 new pending sales over the seven day period between September 23rd and September 29th. That is 16% increase over the previous seven days. That is 29% higher than the same seven day period of 2019. After a month of pretty consistent activity between 52 and 60 pending sales, this is a pretty healthy bump in activity. Late September isn’t the time of year when you would expect the busiest week for new transactions over the last six months.
Notable Numbers from This Week’s Pending Sales
- The 67 pending sales included 25 homes, 37 condos and 5 lots.
- The 37 pending condo sales is the highest weekly total since I started tracking activity during Covid-19. I have to say that the bump in condo activity is unexpected. I know there is some anticipation among Realtors that vacation rental condo activity might pick up when tourism starts to reopen on October 15th.
- Of the 37 pending condo sales, 19 are located in developments that allow vacation rentals. This means that the stronger pending sales are almost equal parts non-vacation rental and vacation rental condos.
- Demand for land is pretty steady albeit a couple pending sales a week slower than what we saw in late July and August.
- The luxury market continues to see strong activity. This week 5 homes and 3 condos priced for more than $2,000,000 went under contract.
This Week’s Sales Activity
Maui Realtors reported 42 sales over the seven day period between September 23rd and September 29th. That is a 13.5% increase over the 7 days prior. It is 28% lower than the same seven day period of 2019. This is the second week in a row of quieter sales. These two weeks remain something of anomaly with no significant dip in pending sales over the last two months to drive the lower sales. It is worth noting that there was a pretty healthy bump in closed transaction right after this tracking period on September 30th and October 1st. Expect higher sales in the next update.
This Week’s Volume of New Inventory
Maui Realtors brought 79 properties to market in the seven day period between September 23rd and September 29th. That is a 5% decrease from the seven days prior. It is 7% lower than the same seven day period of 2019.
Once again, condos comprised the greatest portion of the new listings to come to market. There were 43 new condo listings over this seven day period. While pending sales were up over this period, this marks another net increase in active condo inventory.
While new home inventory is down from last week, it is still the second biggest week for new home listings since July. This is also the second week in a row where new listings exceeded pending sales resulting in a net increase in inventory. As with last week, buyers looking at lower price points may not have noticed the increase. The median price of new home listings is over $1,000,000 and the average price is over $2,000,000. In the scheme of things, the slight increase in inventory over the last two weeks is pretty negligible in the scheme of things. The overall supply of single family homes for sale remains limited.
There was another modest uptick in land inventory this week. With inventory still relatively tight, I can’t see any big changes in the land market forthcoming.
Contact The Maui Real Estate Team
Market conditions remain surprisingly resilient. Personally, buyers I represented were in a couple of bidding wars for homes over the last ten days. While that isn’t uncommon with properties around and below the island’s median sales price, these multi offer situations were at higher price points. That marks a shift.
There is still variability in market conditions by location, property type and price point. Under these circumstances, quality representation and market knowledge is important. Contact The Maui Real Estate Team if you are considering buying or selling property on Maui. We look forward to learning about your real estate needs and offering our assistance and expertise.
Maui Real Estate Blog
New Pricing at Honua Kai
This week Honua Kai Resort in Ka’anapali just announced big price adjustments on their remaining inventory of condos for sale. Honua Kai is the first new beachfront fee simple whole ownership development in the Ka’anapali area for over 20 years. Located along North or Airport beach, It was well received by buyers with the initial pre-construction offerings selling out within hours. The high volume of closes at the complex have helped to buoy condo sales figures over the last couple of years. This is a phenomenon that we dubbed the Honua Kai effect. It is easy to see why buyers have gravitated toward Honua Kai. Amenities include three pools, a fitness center, kids camps, concierge services, a well regarded restaurant in Duke’s Maui and a great stretch of beach along the beautiful waters of the Pacific.
A number of the remaining condos for sale are now discounted well below initial developer pricing. One and two bedroom units in the Hokulani tower appear to be some of the better values with pricing as much as 40% below roll out pricing. There are other floor plans where prices are actually a little higher than the original roll out prices. While the developer does not go into the specific reasons behind the adjustments, this appears to be a classic case of supply and demand. Units that have and continue to garner the most interest have been adjusted upwards. Units where sales have lagged have been adjusted down. You can check out the Honua Kai Updated Price List for specific prices and floor plans available. These new developer offerings at Honua Kai are offered through Playground Destination Property, Inc. The Maui Real Estate Team may represent you as buyer’s agents. Contact us for questions about Honua Kai or for assistance with representation. We look forward to being of service.
Maui Real Estate Blog
Makena Resort Investors in Default
There was big news yesterday on the Maui new development front when various media outlets reported that Wells Fargo was putting the Makena Resort into foreclosure. The resort was purchased in 2007 by Maui Developer Everett Dowling and Morgan Stanley for a sum of $575 million. The investors are in default on a loan of $192.5 million. The resort was the subject of a heated debate in 2008 when the developers applied to the county for the rezoning necessary to develop the 1800 acre site. The rezoning allowed for 1,100 luxury homes and condominiums. The debate pitted those who advocated the development for the jobs it would create vs. those who wanted to protect the natural and cultural resources of Makena. After passionate testimony from both sides, the county council passed the rezoning on a close vote.
What does this the foreclosure mean for future development in Makena?
- This will likely stall, but not completely stop future development in Makena. The development was likely to be slow to get off the ground prior to the foreclosure due to current market conditions.
- The bank will be looking for investors to continue with the development so they can maximize the resort’s sales price.
- Any new development will be subject to the same terms and conditions that the county requested as a part of the rezoning agreement.
- Everett Dowling would like to be a part of the ongoing development, but that is not a foregone conclusion at this point in time.
- Dowling’s Maluaka project in Makena will continue. This luxury development was already scaled down from a luxury condo project into a smaller development of 13 luxury home sites with an associated club house. This project was meant to be phase one of the broader Makena development.
- The Makena Golf Courses and Maui Prince Hotel which are part of the Makena Resort plan to continue operations.
We will continue to provide information on the Makena Resort foreclosure as it becomes available. In the interim, you can check out articles from the Pacific Business News, yesterday’s Maui News and today’s Maui News for additional information.
Maui Real Estate Blog
New Maui Luxury Developments Impacted by Global Financial Issues
Between 2006-2008, I posted fairly regularly on new development news on the island. A lot of this news was focused on the luxury segment as there were four major luxury condominium developments that were planned for Maui. If you read the blog on a regular basis, you may have noticed that my new development posts have been a lot less frequent over the last year. The global financial challenges and tight credit markets put the brakes on many of the island’s proposed luxury projects. Today’s Maui News has an article providing an update on various projects including Maluaka in Makena, Baccarat Wailea and the Villas at Royal Lahaina. Maluaka is being scaled down drastically from a 71 unit condo development to 13 luxury home sites. Royal Lahaina currently has its new luxury project on hold until economic conditions improve. The Baccarat project has been canceled with the future of the project site unknown at this time.
The Ritz-Carlton Club and Residences is the one luxury condo development that was actually able to finish construction. The newest luxury offering in Kapalua opened officially at the end of May. This luxury property offers 62 time share residences and 84 whole ownership condominiums. This were the furthest along in the construction process when the worst of the financial crisis hit. Despite having construction almost completed, the developers had their share of anxious moments. The now defunct Lehman Brothers provided the resort with their lending and they were left scrambling to find the financing necessary to complete the project. Now that they have completed construction, they find a sales environment with fewer potential buyers, but a lot less competition than what they would have faced.
While the financial crisis has caused a good deal of pain for developers and investors backing the proposed luxury developments, the delay and/or cancellation of Baccarat, Maluaka and Royal Lahaina Villas may ultimately be better for the health of the Maui luxury real estate market. The sheer volume of new luxury condos planned at these three developments threatened to flood the market with inventory and dilute values. As it stands, there is still plenty of new luxury inventory to choose from between the Ritz, resales at the Wailea Beach Villas and resale and new developer offerings at complexes like Ho’olei and Papali Wailea. Contact us today if you are in the market for a luxury condo or home on Maui. We are happy to offer our assistance.