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Our local MLS groups the adjoining communities of Wailea and Makena together. While the two areas border each other and both offer high end properties, there are enough differences that they are somewhat distinct markets. While Wailea may be a more recognized name nationally and internationally, Makena tends to see the highest home values on the island. The recent addition of Discovery Land Company’s Makena Golf and Beach Club further cemented this beautiful stretch of coastline as Maui’s most exclusive community. Last week, we posted about the year to date market conditions in Wailea. This post looks at the busy year to date of real estate activity in Makena.

Notable Numbers from This Year’s Makena Home Sales

• Maui Realtors reported 10 home sales in Makena for the year to date as of October 9th.
• This is quite a contrast from the complete lack of sales activity during the same period of 2020.
• It is worth noting that this is the busiest January – October period for Makena Home Sales of any year on MLS records.
• The median price of the ten homes sold is $10,000,000. The average price is $14,151,650.
• A home in the Keauhou subdivision set the high water mark for sales with a $25,000,000 price tag. The newly constructed 6,561 square foot home sits on 2.496 acres of land across the street from the ocean.
• This was one of two reported sales to eclipse the $20,000,000 mark in Makena this year.
• It is worth noting that the coconut wireless is reporting a third unreported sale that came in around $70,000,000. If rumors are correct, the buyer is a rather prominent tech executive.
• A home that sold across the street from Big Beach was the least expensive sale in Makena this year. The 4,080 square foot home on .71 acres closed for $6,337,500.
• Five of eleven home sales in Makena this year are beachfront properties.
• According to MLS records, the Realtors involved reported all sales as cash purchases. It is worth noting that some of these “cash” sales may involve financing in the background with no financing contingencies in the contract.

Thoughts on recent Makena Home Sales and the Makena Home Market Outlook

Like many higher priced home markets around the country, the Makena area experienced robust activity during Covid-19. It just took a little longer for the ball to get rolling. After just one sale in all of 2020, the market really took off after the first of the year. Not only are the 10 sales stronger than any other 9 plus month period, this year’s activity to date is stronger than any full calendar year for Makena on MLS records.

Looking ahead to the rest of the year, inventory figures to be a factor for the Makena home market. At this point in time, there are just two active listings with one home under contract. Barring an influx of new inventory or off market sales, 2021 won’t have too much of an opportunity to pad its record. Assuming there is no drastic change in the overall economic picture, this should be something of a seller’s market as we enter the new year.

Notable Numbers from This Year’s Makena Condo Sales

• Maui Realtors reported 15 condo sales in Makena as of October 9th. That calculates to a 50% increase in activity over the 10 sales that closed during the same period of 2020.
• The median price of the fifteen condo sales is $3,050,000. The average price is $3,973,000. This is actually down from last year’s median and average sales price of $5,069,500 and $4,734,275 respectively.
• Makena Surf was the busiest development for sales activity with eight closes. Na Hale O Makena came next with 5 closed transactions. There were 2 closes at the Kula Villas at Makena Golf and Beach Resort.
• The highest priced transaction closed for $12,500,000. That was for one of the units at the Kula Villas. It is four bedroom, four and a half bathroom condo with 3,625 square feet of living space.
• The lowest priced sale closed for $1,500,000. The 3 bedroom, 2.5 bath unit at Na Hale O Makena has a garden view.
• Nine of fifteen Makena condo sales this year were were cash transactions.

Thoughts on the Makena Condo Market

While the fifteen condo sales in Makena may not seem like a lot, the year to date sales are stronger than any similar time period on MLS records. There is a slight asterisk to those numbers in that for much of the MLS history, there was only one or two condo developments in the area. The addition of the Kula Villas means more potential inventory to sell. Nonetheless, this is still a pretty strong year for buyer activity.

Looking forward to the rest of the year, the Makena market isn’t exactly teeming with inventory with four active listings and no pending sales. This will be the biggest constraint on new sales activity for the rest of the year. The Makena Golf and Beach Resort does tend to have a fair number of properties that never make it on to the MLS. We could see a few sales pop out of that development before the end of the year.

Contact The Maui Real Estate Team

Please contact the Maui Real Estate Team if you are thinking of buying or selling property in Makena. Buyers can search the current inventory of Makena Homes for Sale and Makena Condos for Sale on MauiRealEstate.com. Buyers let us know if there is a specific area of Makena that might be of interest. With the limited inventory available, we would be happy to keep our ears open for unlisted properties. For sellers, limited supply and strong demand make the present a great time to be on the market. Feel free to reach out to us for a free consultation and price opinion on your property.

Once again, it’s time to check in on market conditions for another community on Maui. Let’s head Upcountry and look at the Kula real estate market. Kula spans a vast geographic area along the Western Flank of Haleakala. It runs from roughly 1,200 feet in elevation up to 4,000 feet. From an MLS perspective it includes smaller communities like Keokea, Ulupalakua and Kanaio. Kula is an agricultural hub of Maui with a number of fruit, flower and vegetable farms dotting the landscape as well as some larger livestock operations. Homes range from modest plantation style homes on rural or residential lots to substantial estates on big acreage. This post looks at market activity for the year to date as well as a few thoughts on the market outlook.

Notable Numbers from this Year’s Kula Home Sales

• As of September 13th, 65 homes sold in Kula during 2021. That is a 33% increase over the 49 sold during the same period of 2020.
• The median price of the homes sold in Kula during 2021 is $1,225,000. The average price of the homes sold is $1,521,778. The median price and average price are up 28% and 38% respectively compared to the same period of 2020.
• Fifty-seven percent of the homes sold in Kula this year closed for asking price or higher.
• The highest priced home to sell this year closed for $9,200,000. Home doesn’t quite do the property justice. The sale included two lots totaling 23 acres, two extra large water meters, a 7,809 square foot main house, a pool, a detached 7 car garage and a second 2,712 square foot home. This is the highest ever sales price for a residential property in Kula.
• This was one of 13 sales over $2,000,000 for the year to date. That compares to 3 during the same period of 2020.

Thoughts on the Kula Home Market for the Year to Date

Like the rest of the island, the Kula home market experienced robust activity over the year to date. Demand was high while supply remained low. Based on the rate of sales, there were 3.3 months supply of home inventory in January. After that, it dropped as low as 2.1 months supply in April and has yet to climb above 3 months supply again. Strong demand and limited supply helped to boost prices significantly. The question is how much? The change in average price and median price don’t just reflect shifts in value. They also reflect an increase in activity at higher price points in the market. Sales of homes over $2,000,000 increased 433% compared to 2020.

Outlook for The Kula Home Market for the Rest of the Year

It’s the classic push pull of supply and demand that should be in play for the rest of the year. At this point, it appears as if demand remains strong. We started unofficially tracking a new metric in our office over the last few weeks. We are looking at how quickly new listings are going under contract. With a high number of properties going under contract in less than a week, it is pretty clear that demand is still pretty strong. The question is whether we might see any relief with new inventory. While inventory is slowly increasing on the mainland, it remains near all time lows in Kula and Maui in general.

The Kula Land Market

Kula is an area of the island where you tend to see more land sales. A handful of new developments over the last few years and smaller subdivisions usually translates into a healthy supply. This year, increased buyer activity put a serious dent in inventory numbers.

Notable Numbers from the Kula Land Market

• As of September 13th, Maui Realtors reported 35 land sales for the year. That is up 21% from the 26 sales over the same period of 2020.
• The median sales price of the lots sold is $930,000. The average sales price is $1,058,473. The median price increased 206% from the median of $450,000 during the same period of 2020. The average price increased 24% compared to last year’s average of $853,148.
• The lowest priced transaction closed for $350,000. That was for a 1/2 acre lot without water.
• The highest priced lot to sell closed for $4,500,000. That parcel in lower Kula included 148 acres of land.
• That was one of 11 lots to sell for more than $1,000,000. By comparison, there was just one lot that sold for $1,000,000 or more during the same period of 2020. That one sale was a large land acquisition by the state of Hawaii.

Kula Land Market Activity and Outlook

The Kula land market mirrored many of the other places around the island in terms of market activity for the year to date. Higher demand, shrinking supplies and rising prices. The increase in higher priced sales was another particularly notable aspect of this year’s activity. As mentioned above, there was just the one sale over $1,000,000 in 2020 compared to the 11 sold thus far this year. Seven more properties listed for $1,000,000 show as pending on the MLS. This constitutes a massive increase in demand for higher end properties in Kula.

A lot of the higher end sales activity occurred in the Kula I’o subdivision. This gated community of 2.5 acre-25 acre lots experienced modest sales activity the first couple of years on the market. The development benefited from this year’s increased high end sales activity with 15 closes ranging in sales price between $830,000 and $1,650,000. At this point, most of the developer’s lots in Kula I’o are sold or pending. That said, I imagine we will see resales and CPR lots in the future.

It’s important to keep the increased higher end activity in mind when looking at the big shift in median and average prices. While limited supply and increased demand led to rising values, the 206% increase in median price is largely a reflection of the increased sales activity with high end lots. While the big land, big view lots in Kula I’o heavily influenced the average and median price in 2021. The big driver in 2020 was a subdivision with half acre lots in the $450,000-$500,000 price point.

Moving forward, inventory or lack thereof is going to be the big market driver for the rest of the year. Unless there is a big influx of new inventory, I can’t anticipate a lot of sales activity. If demand remains relatively strong, I anticipate that the combination of demand and low inventory will mean continued upward pressure on pricing.

Contact The Maui Real Estate Team

The Maui Real Estate Team works extensively in the Kula market. Contact The Maui Real Estate Team if you are interested in property in Kula. We would welcome the chance to discuss the market and learn more about your real estate interests and needs. You can search the active inventory of Kula Homes for Sale and Kula Land for Sale on MauiRealEstate.com.

We thought it might be a good time to check in on the Paia Real Estate market. Our office is based in this North Shore beach town. Paia’s real estate market consistently sees strong demand and limited inventory. Demand stems from the combination of the town’s charms, amenities and its proximity to fantastic ocean sports. It is known for surfing, windsurfing, kite surfing, foiling, stand up paddling and more. The limited inventory is due in part to constrained housing supply. Bordered on one side by ocean and the other three sides by agricultural land, there isn’t much room for growth. The total supply of homes grew only slightly since the early 2000s. Prior to Covid-19, the market experienced lower sales volume due to limited inventory. Activity remained limited during the first half of 2020 with momentum building over the last few months of the year. For the first seven months of 2021, activity surged with the most closed transactions since 2018.

This post looks at the activity for the year to date in Paia. it is worth noting that our local MLS lumps, Spreckelsville, Paia and Kuau together. The focus of this post is just on the Paia and Kuau area. We posted on Spreckelsville 2021 market activity in July.

Paia Real Estate Market 2021 Notable Numbers

• Maui Realtors reported 18 homes sold during the first 7 months of 2021. This is well above the sales volumes over the same periods of both 2019 and 2020.
• The median price of the homes sold is $900,000. The average price is $2,129,832.44.
• The lowest sale price in the community for the year is $705,000 for a home in the Skill Village neighborhood. It has three bedrooms, two and half bathrooms and 978 square feet of living space on a 6,739 square foot lot.
• The highest priced transaction for the year to date is $9,100,000 for a 7,660 square foot home and a 936 square foot cottage on a 1.28 acre oceanfront lot in Kuau. That is the highest ever sales price for a home in Paia or Kuau.
• We also saw the highest ever sales price for a non-oceanfront home in the Paia and Kuau area. A 2.2 acre compound across the street from the ocean with a 3,171 square foot home, a 989 square foot cottage and two pools closed for $8,375,000.
• The Skill Village neighborhood had the most sales activity of any neighborhood with 7 sales for the year to date.
• In addition to the 18 homes sold, there are an additional 6 pending sales at this time.
• There were also two condos at Kuau Plaza that closed in the first 7 months of the year.

Neighborhood Updates

As mentioned above, Skill Village saw the most sales activity of any neighborhood in the Paia area. Skill Village typically is the most accessible neighborhood by price in the Paia area. The strong demand for entry level homes in the community helped push up pricing. The three all time highest sales prices in Skill Village all happened during the first six months of 2021. They include a new neighborhood high price of $900,000.

Skill Village wasn’t the only entry level neighborhood with higher activity levels. The Paia Halealani neighborhood had 3 sales. While that doesn’t sound like a lot, this subdivision located between North Shore Village and the Paia Community center typically doesn’t see much in the way of activity. Only 3 homes sold in the five years prior to 2021. Sales prices also went up substantially. A home that closed for $1,200,000 shattered the previous neighborhood high sale.

On the other end of the spectrum, there wasn’t much activity in Kuau Bayview with just one listing and one sale. This is typically one of the more in demand neighborhoods in Paia, but there just aren’t many sellers at this time.

While not a neighborhood per say, I wanted to touch on activity in the Paia oceanfront market. There were two ocean front sales in the first seven months of the year. There are two additional oceanfront properties under contract. As mentioned above, the one oceanfront sale set a new record high for the Paia and Kuau area excluding Spreckelsville.

Outlook for the Rest of 2021

While the Maui market isn’t quite as frenzied as the first few months of 2021, it is still a strong seller’s market. Demand in the Maui Real Estate market remains steady. Well priced properties are still tending to go under contract quickly with multiple offer situations common. At this point, supply is likely to have the biggest impact on sales for the rest of 2021 in the Paia and Kuau area. Like many parts of the Maui market, inventory levels are well below normal. There are currently 16 homes listed for sale and 6 of those are already under contract. The remaining 10 include 4 over $7,000,000 and just 2 under $1,000,000. Buyers looking at the entry levels for Paia will find that inventory is particularly limited.

Some mainland markets are starting to see supplies slowly creep up. On Maui inventory remain at or near all time lows. It will be interesting to see if and when we might see inventory levels start to increase in Paia. Supply constraints were impacting market activity prior to Covid. My suspicion is that inventory will be slower to rise in Paia.

Contact The Maui Real Estate Team if you are interested buying or selling property in Paia. The Maui Real Estate keeps close tabs on our back yard market. We would welcome the chance to discuss your real estate needs.

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The initial economic impacts of Covid-19 included lost jobs and disruption of income for large numbers of people around the globe. With the local Maui economy largely dependent upon tourism, our small island was among the nation’s hardest hit. The original CARES act that passed in the spring of 2020 offered relief to homeowners who struggled to pay their mortgages due to job loss or depressed wages. Those struggling homeowners were able to work with their lender to pause or reduce their mortgage payments for a period time. What started as a 6 month program was extended to 18 months. A total of over 7.25 million borrowers used forbearance as a means of relief for at least some period of time. That number of homeowners in forbearance is down to approximately 2,000,000 by around the end of June.

As of September, some of the borrowers who were among the first to enter the forbearance program will come to the end of their 18 month forbearance period. At this time, it does not appear as if there will be additional extensions of the program. What does the end of forbearance mean for those borrowers and the market as a whole?

The good news is that Fannie, Freddie and FHA are saying the right things about borrowers coming to the end of their forbearance. Recent guidelines released by those entities are focused on loan modifications for borrowers struggling to make their payments due to Covid related financial struggles. If you are a homeowner faced with the end of forbearance in the immediate future, remain proactive in your discussions with your mortgage holder. Ask about loan modification programs.

For those that may not be able to get a loan modification or the terms of a modification are too onerous, selling may be the only option. During the mortgage meltdown of the 2000s, borrowers struggled with the dual challenge of economic hardship and plunging prices. The result was a wave of foreclosures. Current market conditions couldn’t be more different as prices on island and for much of the continent climbed steadily over the last twelve months. The good news is that the recent appreciation should allow the majority of borrowers who need to sell to pay off the balance of their loan. That should significantly curtail the number of foreclosures. Feel free to Contact The Maui Real Estate Team if you are trying to get a sense of the current market value of your property. We would be more than willing to help out with a free broker’s price opinion.

Based on the above, it seems unlikely that the end of forbearance will significantly change the Maui market. The impact of the end of forbearance in the Canadian market seems to reinforce that notion. About 17% of the mortgages in Canada went into forbearance. As of February, 98% of the forbearance programs expired. As of the end of June, the average home price in Canada was up 25.9% year over year.

While the end of forbearance might lead to a small bump in inventory, a drastic influx of distressed property seems less likely. Real Estate economists are predicting a gradual increase in inventories as the year progresses. Post forbearance properties should be one component of that increase.

We continue our series of weekly updates on the Maui Real Estate market during these difficult and dynamic times. After seeing a sharp drop in activity around and immediately after stay at home orders, recent weeks show a steady but slow increase in activity. We provide this week’s numbers as well as a look back at the overall April numbers in this week’s post.

Maui Realtors reported a slight increase in pending sales compared to the week prior. The 36 new pending sales reported are a 9% increase over last week’s 33 new contracts. The 36 pending sales is 43% lower than the number of properties that went under contract over the same seven day period last year. This weeks pending sales included 19 homes, 15 condos and 2 lots.

Notes on This Week’s Pending Sales

• This is now three straight weeks with pending sales increasing over the week prior. This is the slowest week to week growth though.
• Pending home sales outpaced condos for the fifth time in the last six weeks. Condo sales outpaced home sales 11 out of the last 12 months. The shift to more pending home sales appears to be a shift in the market.
• Of the 15 pending condo sales, 8 may be rented legally as vacation rentals. One of the other pending condos is located in a resort area. It appears as if the second home market is still seeing the lion share of the condo activity.

This Week’s Sales Activity

Maui Realtors reported 36 sales between April 29th and May 5th. That is 14% lower than the week prior and the second lowest weekly sales number since the beginning of the pandemic. The 36 closed transactions is 42% lower than the same seven day stretch of 2019. This last week’s closed transactions included 12 homes sold, 16 condos sold and 8 lots sold. Lot sales received a boost from four sales in a new subdivision. The lots went under contract last year.

Looking at the Overall April Numbers

I thought it would be worth looking at monthly numbers now that April is over. With weekly numbers, the trend is positive with more pending sales each week. That’s due in part to how little activity there was towards the beginning of the month. This is really apparent when you look at how low pending sales were for this April compared to last April. While last week’s numbers are down 43%, last month’s numbers are down 66%.

The 45 pending home sales last month were just 41% of the total from last April. Realtors reported only 38 new pending condo sales in April. That is just 28% of last April’s Condo pending sales. The 6 pending land sales reported are just 35% of last April’s land pending sales. While the monthly numbers are a stark sign of the initial impact of Covid-19 on market activity, the weekly numbers are a silver lining with activity slowly, but steadily increasing.

The sales numbers for April 2020 show more than anything else that sales are a lagging indicator when it comes to demand. The bulk of the closes are from contracts that were penned in February and March. Both home and land sales actually outpaced the numbers from March of 2019. This also suggests that not too many deals fell apart due to the impact of Covid-19. To be clear, some transactions cancelled, but many more continued to closing.

Looking Ahead

It appears as if the trajectory of the Maui Real Estate market is following some real estate economists’ predictions for a check mark shaped recovery. What is meant by a check mark is a steep drop in activity with a quick trip to the bottom with a slower pace of recovery. It will be interesting to follow things over the next couple of weeks to see if the rate of recovery continues, slows or stalls.

Earlier this week, the University of Hawaii Economic Research Organization (UHERO) posted a few different scenarios for the rate and time frame of economic recovery. Even UHERO’s optimistic projections point to significant economic headwinds for the Hawaiian Islands with a substantive return of tourism still months away.

Lack of housing inventory remains a significant factor in our housing market. The pace and time frame of the overall economic recovery will be a big driver for the demand side of the equation. Limited supply provides upward pressure on values. Limited demand provides downward pressure on values.

There is still a market for real estate on Maui. Local residents need homes and potential second home owners from all over the world dream of owning a place on island. Contact The Maui Real Estate Team if you are a buyer or seller venturing into the market. We bring experience, negotiating skill and a commitment to provide the latest market data so our buyers and sellers may make truly informed decisions. We look forward to being of service.