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On May 13, the Maui County Council approved new property tax rates for the upcoming fiscal year. There are a some particularly notable changes. The new rates decrease tax rates for owner occupied properties and apartments while significantly increasing rates on non owner occupied properties. Rates for the Short-Term Rental, Agricultural, Industrial and commercial classification also changed.

Another notable change for the coming fiscal year is the creation of a new long-term rental category. This is a lower tax rate category meant to incentivize more long term rentals. The county council created this classification last fall but this is the first fiscal year it will be in effect. Owners who qualify for this classification also get an exemption that reduces their assessed value by $200,000.

One last note, there was some modification to the tier system first implemented in the 2020/2021 fiscal year. For certain categories of property, this system created three different tiers of tax rates based on the assessed value of properties. The tier system was implemented for the homeowner, short-term rental and non-owner occupied classifications. The new long-term rental category is also part of the the tier system.

Previously, tier 1 was for properties assessed up to $800,000. Tier 1 is now for properties up to $1,000,000. Tier 2 was for places assessed between $800,001 to $1,500,000. The new tier 2 is $1,000,001 to $3,000,000 for owner occupied, short-term rental and long-term rental. The new tier 2 for non owner-occupied is $1,000,001 to $4,500,000. The old tier 3 was for properties assessed for more than $1,500,000. The new tier 3 is more than $3,000,000 for owner-occupied, short-term rental and long-term rental. The tier 3 for non owner occupied properties is more than $4,500,000.

2022/2023 Maui County Property Tax Rates

Here are the updated rates for this coming fiscal year. If there is any change in rates, last years rates are noted for reference. All rates shown below are per $1,000 of assessed value.

Owner Occupied

• Tier 1: up to $1,000,000 Formerly $2.41 now $2.00
• Tier 2: $1,000,001 to $3,000,000 Formerly $2.51 now $2.10
• Tier 3: more than $3,000,000 Unchanged $2.71

Non Owner Occupied

• Tier 1: up to $1,000,000 Formerly $5.45 now $5.85
• Tier 2: $1,000,001 to $4,500,000 Formerly $6.05 now $8.00
• Tier 3: more than $4,500,000 Formerly $8.00 now $12.50

Apartment

• Formerly $5.55 now $3.50

Hotel and Resort

• Unchanged $11.75

Timeshare

• Unchanged $14.60

Short-Term Rental

• Tier 1: up to $1,000,000 Formerly $11.11 now $11.85
• Tier 2: $1,000,001 to $3,000,000 Formerly $11.15 now $11.85
• Tier 3: more than $3,000,000 Formerly $11.20 now $11.85

Long-Term Rental

• Tier 1: up to $1,000,000 New Class $3.00
• Tier 2: $1,000,001 to $3,000,000 New Class $5.00
• Tier 3: more than $3,000,000 New Class $8.00

Agricultural

• Formerly $5.94 now $5.74

Conservation

• Unchanged $6.43

Commercial

• Formerly $6.29 now $6.05

Industrial

• Formerly $7.20 now $7.05

Commercial Residential

• Unchanged $4.50

About Maui Property Taxes

The new rates go into effect at the start of the new fiscal year on July 1st, 2022. Property taxes are due in two separate installments. The first installment is due in August 2022 with the second installment in February 2023. Owners should have received notification of their new assessed values in March of 2022.

Homeowner and Long Term Rental Exemptions

The deadline to file for the homeowner or long term rental exemptions and classifications passed. If you file by the end of 2022, you would be eligible for the exemption and tax rate for the 2023/24 fiscal year. Here is the link to the Long Term Rental Exemption and the Home Owner Exemption forms. The eligibility for the homeowner exemption can be confusing. It is worth reading the county Exemption FAQ to better understand eligibility requirements. Check out the county’s explanation for different property type classifications if there is any confusion on what category your current property or future property might fit into. Contact The Maui Real Estate Team for assistance buying or selling Maui property.

This week’s market musings takes a look at some of the notable numbers from the February sales statistics and the latest on interest rates. Without further ado…

Notable Numbers from The February Stats

The Realtors Association of Maui recently released their February 2022 statistics. These are some of the numbers that I found particularly noteworthy.

• New inventory decreased for homes and condos 6.7% and 17.3% respectively compared to February 2021. This speaks to Maui’s continued inventory crunch.
• Pending sales for homes and condos dipped by 27% and 31% compared to last February. This is in part due to a lack of inventory and in part because the period between February and April of 2021 were the busiest in Maui’s history for closed transactions. For these same reasons, I surmise you will see similar year to year decreases in pending sales throughout the rest of the Spring.
• The days on market for homes increased just than 1% compared to last February. On the other hand, condo days on market dipped 46.8% compared to last February. While some of this is due to a particularly strong condo market, this can also be traced to a divergent home and condo market during 2020. Home inventory decreased throughout 2020. Condo inventory, and vacation rental condo inventory in particular, increased throughout most of 2020. It only started to trend down towards the end of the year after the reopening of our tourism economy in October. There was a pretty healthy inventory of condos with higher days on market to start 2021. As a result, many of the early 2021 sales had pretty high days on market. In 2022, there are a lot fewer condo listings sitting around for long before going under contract.
• The median sales price of single family homes and condos increased 18.3% and 31.2% respectively. To be clear, these numbers do not directly reflect changes in property values. Changing values do influence median sales price. However, the median price is also influenced by the composition of the properties sold. We touched on estimated price increases since the start of Covid in Musings Volume II. Across a variety of properties, we saw values increases between 28 and 46% over the last two years.
• Single family home inventory decreased 25.6% compared to last February. Condo inventory is down 71.3%. Again, this goes back to the differences of inventory to start 2021. The condo market had a pretty healthy supply of condos for sale, while the home market entered the year with far fewer condos. Relevant to the here and now, inventory levels remain really low for both homes and condos.
• Two markets stood out for an increase in activity. Both the Kihei and the Napili, Kahana, Honokowai districts saw big increases in condo sales. Vacation rental condo sales drove the increased activity. Sales of Kihei condos that allow vacation rentals are up 32% this February compared to last February. Sales of Napili, Kahana and Honokowai vacation rental condos were up a whopping 93.75%.

Interest Rate Watch

After flat to declining interest rates, the 30 year fixed rate jumped above 4% for the first time since 2019.

Instant Reaction: Mortgage rates jumped above 4% to their highest level since April 2019. Specifically, the 30-year fixed mortgage rate rose to 4.16% from 3.85% the previous week. https://t.co/XgYebcV4t5 pic.twitter.com/8loCjkWOSK

— NAR Research (@NAR_Research) March 17, 2022

This is a resumption of the upward trend over the last six months. Rates dipped with the start of the war in Ukraine as investors shifted from equities to more secure bonds. Mortgage rates tend to generally follow the ten year treasury bond. A subsequent sell off in bonds due to news on inflation and future fed increases allowed rates to increase again. While the gradual increase in rates is forecast to continue, some economists predict that global uncertainty may dampen the rate of increase in mortgage rates this year.

And For Something Non-Real Estate Related…

My posts can’t be all numbers all the time. Chances are if you are reading this, your interest in the island extends beyond real estate. You appreciate Maui’s people, natural beauty, flora and fauna. With that in mind, I thought it was worth sharing this short video from earlier in the week. Here is one of Maui’s most famous winter visitors being saved from an entanglement of fishing gear.

Watch how the NOAA-led team freed a male humpback whale from a life-threatening entanglement. @noaaocean @NOAAFisheries

More details on how they did it: https://t.co/whwVTT0kt7#hawaiinews #HInews #whale pic.twitter.com/RT5ZgIjnmQ

— KHON2 News (@KHONnews) March 17, 2022

Contact The Maui Real Estate Team

That’s it from this week’s Market Musings. Contact us if you have any questions about the market, requests for content on future posts or of course need assistance buying or selling property on Maui.

If there is any one community within Maui that epitomizes the Covid era real estate boom, it is Kapalua. This resort community on Maui’s Northwest coastline was always an appealing locale for a segment of Maui’s luxury property buyers. That said, inventory tended to be higher and days on market tended to be longer than other resort areas like Wailea and to a lesser extent Ka’anapali. With that context, the recent surge in activity in Kapalua is that much more astounding. In this post, we take a look at some of the numbers from the last 18 plus months of sales. We also give a few thoughts towards the end of the post on the market outlook for 2022.

Kapalua Homes

Kapalua was one of the first luxury home markets on the island to show signs of life in the second half of 2020. The strong performance continued into 2021. The numbers below represent highlights from the 2021 market activity.

Kapalua 2021 Home Sale Notable Numbers

• Maui Realtors reported 29 homes sold within the Kapalua Resort during 2021. That is a 70% increase over 2020.
• The 29 sales is the highest ever number for a single year in Kapalua. It is worth noting that 2020 was the second strongest year ever for home sales in Kapalua.
• The median price of homes sold during 2021 is $4,135,000. The average price is $4,972,327.
• The highest priced transaction closed for $15,000,000. That was for 9 Kapalua Place. This beachfront home includes over 7,000 square feet of living space on a .7 acre parcel of land.
• That was one of three closes over $10,000,000. The other two sales included another beachfront home in the Kapalua Place subdivision and a home in Kapalua Plantation Estates.
• Pineapple Hill was the busiest subdivision for transactions with 15 closes. Plantation Estates saw the next most activity with 6 sales. They were followed by Honolua Ridge with 4 sales, the aforementioned Kapalua Place’s 2 closes and a single home sale in Mahana Estates.

Behind the Numbers

As mentioned above, Kapalua’s market surge started in the second half of 2020. Specifically, it was the last quarter of 2020 when transaction volume picked up. Nine of seventeen sales for the year closed in November and December. The upturn in market activity happened earlier than the Wailea Market, a larger resort community with typically much higher sales volumes. What was it that drove earlier buyer interest in Kapalua? Well it wasn’t any new resort amenities. The biggest driver was the proximity to one of the island’s better private schools.

Early in the pandemic, Kapalua became a Zoom town. A large number of Silicon Valley employees moved to Maui to work remotely. Initially, they came as renters. Those with families had their kids learning remotely for the last couple of months of the 19/20 school year. At the start of the 2020/21 school year, the enrollment of Maui Prep ballooned by 100 students. All of the new students came from Silicon Valley families. The school, located minutes from Kapalua, offered a draw to remote workers that a place like Wailea did not. Many of the families that started as renters began to purchase property in the fall of 2020 and that momentum continued into 2021.

It’s worth looking at the 2021 sales more closely as market conditions were not uniform throughout the year. Twenty of the twenty-nine sales in Kapalua occurred in the first six months of the year. During the first part of the year, there was still a decent supply of homes for sale. The decreased sales volume during the second half of the year can be attributed to a combination of reduced inventory, seasonality and perhaps slightly lesser demand. Though, I would put inventory at the top of that list by a good margin. Scarcity remains a driving factor going into 2022. I will comment more on that in the market outlook below.

Kapalua Condos

The Kapalua Resort set a new record for condo sales in 2022. The dynamics driving the market were a little different than the home market. It was less of a case of remote workers and more a case of the Covid second home boom. The numbers below show some of the 2021 market activity followed by a few more thoughts on what drove the numbers.

Kapalua 2021 Condo Market Numbers

• Maui Realtors reported 145 sales in the Kapalua Resort during 2021. That is a 363% increase in activity over 2020.
• For additional context, the next closest year for condo sales in Kapalua is 2004. There were 87 closed transactions that year.
• The median price of the condos sold in 2021 is $1,220,000. The average price is $2,060,805.
• The highest priced transaction closed for $13,295,000. That type of cash buys you a 4,050 square foot, four bedroom, four and a half bathroom unit at the Montage Residences Kapalua Bay with stunning views. This is the highest ever sales price for a condo in Kapalua.
• The lowest priced condo sold in 2021 closed for $600,000. That sale was a 1 bedroom, 1.5 bath unit at Kapalua Golf Villas.
• Golf Villas experienced the most sales activity in the resort with 44 closes in 2021. Kapalua Bay Villas came next with 30 closed transactions followed by Kapalua Ridge with 28 closed sales and Montage with 27. On the quieter end of the spectrum, 6 sales closed in Coconut Grove, 5 closed in the Ironwoods and 5 closed at the Ritz Carlton Residences.
• 2021 was the busiest year for transaction volume on MLS records for the Ridge, Bay Villas, Golf Villas and Montage. It was the busiest year since 2003 at Coconut Grove and the busiest since 2004 at the Ironwoods.

Digging into the Condo Numbers

The Kapalua Condo market didn’t fully kick into gear until early 2021. Market activity more closely resembled the activity in other condo markets around the island. A modest uptick in activity in late 2020 followed by frenzied activity after the new year. While activity slowed a little in the second half of the year, sales volumes for Kapalua condos did not dip to the same extent as the home market. Forty-six percent of all condo sales occurred in the second half of 2021 compared to only 31% of home sales. While supply shrank as the year went on, there was still enough supply available to meet the considerable demand.

Kapalua Land

I usually don’t spend too much time discussing land sales when I provide these community level market updates. That said, the 2021 Kapalua land market can’t be ignored. The increase in transaction volume compared to 2020 was bigger than any other segment of the Kapalua market.

Notable Land Sale Numbers

• There were 60 lots sold in Kapalua during 2021. That calculates to a 750% increase in transaction volume compared to 2020!
• The 60 sales is almost 1/4 of the 247 all time sales in Kapalua reported on the MLS.
• Mahana Estates led the way with 42 closed transactions. These were new developer sales.
• Honolua Ridge saw the second most sales activity with 11 sales. Realtors reported 5 sales in Plantation Estates and 2 sales in Pineapple Hill Estates.
• The median price of lots sold is $995,000. The average price is $1,156,000.
• The highest priced sale closed for $2,600,000. The 2.7 acre lot in Plantation Estates offers beautiful views towards Honolua Bay.
• The lowest priced lot closed for $700,000 in Mahana Estates.

Looking Behind the Land Numbers

This was the year of the great Mahana Estates land rush. At the start of the pandemic, I don’t think anyone would have predicted this development would sell out by the end of 2021. Market response for was tepid the first few years the development was on the market. One lot sold in 2019 and two in 2020. There were a couple of different days in February where 3 lots closed in a day. It will be interesting to watch this development evolve and build out. There were a fair share of bulk purchases among this year’s Mahana Estates Sales. Were those land speculators, spec builders or long term holds?

The 18 non-Mahana Ridge sales are nothing to sneeze at. Those 18 sales alone are more than any one year since 2005. The lack of inventory in the home market during parts of 2021 definitely pushed some buyers to build.

2022 Market Outlook

Inventory, or lack thereof, appears to be the biggest market driver to start 2022. At the time of this post, there are only 6 active Kapalua Homes for Sale. Three additional homes are under contract. As of right now, there are only 12 active Kapalua Condo listings. It is worth noting that only 2 of the active condo listings are priced for less than $2,000,000. An additional 12 condos are currently under contract. Land is even more scarce. There is only one lot for sale in Kapalua. An additional 9 lots are under contract.

It’s safe to say that 2022 shouldn’t threaten the record sales volumes of 2021. The question is whether we will see any inventory relief during the year. Will some of the people remote working list their homes if they go back to the mainland? Will the high prices entice any sellers to come to market?

What about demand? As of right now, demand appears to be pretty strong for the limited inventory available. That is putting upward pressure on pricing. Looking forward, are there any other threats to demand looming on the horizon? There is a lot of discussion about rising interest rates and their impact on the national real estate market. There are arguments on both sides, but a lot of economists seem to be downplaying the potential impact on buyer demand due to the acute supply issues. That said, you would think the impact might be even less in Kapalua where 62% of last year’s sales were cash.

I would argue that state of the overall economy and the trajectory of the stock market are likely to have a bigger impact. Over the years, we’ve noted something of a correlation between sales volume in the resort communities and the stock market. Good years for the Dow means more financial power for discretionary purchases like second homes.

The last question is whether we might see any buyer resistance on pricing. In particular, I wonder about the impact in the vacation rental condo market. Maui has always been a place where more people bought for love than rental returns. That said, the recent price increases resulted in even smaller cap rates. Will the combination of limited returns on higher purchase prices shrink the buyer pool at all? Thus far, that doesn’t seem to be the case.

Contact The Maui Real Estate Team

Contact The Maui Real Estate team if you are considering buying or selling property in Kapalua. We would welcome the chance to discuss market conditions specific to your interests.

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.