As we approach the end of 2014, we wanted to begin looking at market conditions in a variety of neighborhoods and communities around the island. We start with a neighborhood in The Maui Real Estate Team’s backyard. Kuau Bayview is a 92 home development built between 1996 and 1998. The subdivision is within a ten minute walk of downtown Paia, less than five minutes drive to Ho’okipa and Baldwin Beach Parks, offers consistent pride of ownership, borders a community park and a number of homes offer excellent ocean views. As Paia has gained increased renown as a desirable beach town, demand for homes in the neighborhood has grown. The growth in demand was particularly evident in Kuau Bayview during 2013. The 2013 neighborhood sales included two record high closes and the second highest cost per square foot sale. While the island as a whole saw solid price increases, there was no other neighborhoods on island that reached the heights of Kuau Bayview.
Kuau Bayview came back to earth during the first half of 2014. Inventory was limited to two listings and there was just a single sale recorded during the first six months of the year. That sale failed to come close to some of the high prices seen in 2013. The home that closed lacked views and did have a fair amount of road noise due to its proximity to Hana Highway.
The second half of the year has seen a modest uptick in activity with two more sales and two new listings. The trend of lower priced sales in the neighborhood has continued during the second half of the year. The most eye catching sale was 19 Hoe Place. This bank owned property sold well below recent neighborhood values with a price of $517,500. Why so low? That’s a good question. I think the biggest factor behind the low price was that this property was not listed conventionally. The property was only listed on auction.com. It was not published on the local Multiple Listing Service and was under the radar of most Realtors until it had closed. In conversations with the listing agent, he indicated that the property was also in poor condition. Regardless, I think it is pretty safe to say that the bank left some money on the table by choosing not to market to the local real estate community. Were more buyers aware of this listing, the sales price would have been higher. I would call this sale a pretty clear outlier.
The second sale during the last half of the year was 33 North Laelua. This property is notable in that it sold during the last market peak for $782,000. That 2006 sale remains the highest cost per square foot sale in Kuau Bayview to date. This September, the home sold for $655,000. That said, I think this sale was close to or a little bit below fair market value. This home likely sold for above market back when it sold in 2006. While 33 North Laelua is a nice home; a lack of view, a small lot and a smaller floor plan made the 2006 sales price something of a surprise. It lacked the views and location more typically associated with the highest priced sales in Kuau Bayview.
It will be interesting to see how the market receives the three current listings that are active in Kuau Bayview. All three are priced well above the two sales in the community for the year to date. The listing at 34 North Laeluea represented by Maui Luxury Real Estate LLC has been on the market the longest. The current list price is $769,500. The property sold in March 2015 for $750,000. It was the highest sale for a home in the neighborhood located on Hana Highway. The home came back on the market in January and market feedback would seem to indicate pricing is high.
The listing at 20 North Laelua is another resale from last year. It is currently listed for $899,000 by Keller Williams Realty. It sold for $800,000 in December. This home has nice views, recently had a PV system installed, and it is set a little further back from the Hana Highway. The most recent listing to hit the market is 40 North Laenui. This home is located at the very top of the subdivision. This is the one and only listing this year located at the top of the subdivision. This home has been impeccably remodeled and well maintained by the owner. There are ocean views from one of the bedrooms upstairs. This home is listed by Wailea Realty for $869,000.
With three lower priced sales this year and two properties listed above the neighborhood’s highest ever sale, I could understand why many would be perplexed about the state of the Kuau Bayview Market. With our office having represented more buyers and sellers in the neighborhood than any other brokerage on island since 2010, we are in a position to provide some insight. While the neighborhood is small in number, fairly uniform in construction and compact in geography, there is a fair amount of differentiation in value among the 92 homes. The biggest factors in value are views and road noise. The properties that have the best views have the highest values plain and simple. The neighborhood high sale from last year had ocean views from the first and second floor and the home was remodeled to maximize those views. The second highest sale from last year also had good views. Road noise is likely to have the biggest negative impact on value in the neighborhood. You could see that with the sale of 52 N Laelua earlier this year and the tepid market feedback for 34 N. Laeluea.
Going forward, the Kuau Bayview market has one challenge. While buyers may see a big difference in value based on views or road noise, appraisal isn’t as nuanced. I have found that road noise isn’t always as big of a negative influence on value in appraisal as it is among buyers. Appraisal doesn’t always differentiate in value between an ok view and a great view. An appraiser is going to look at the proximity of the current listings to the three sales this year and adjust for square footage, any differences in quality and the presence of a view. That is going to make it tough for any of the three listings to appraise near their current asking price. The good news for the three listings on the market currently is that four of the last eight sales in Kuau Bayview have been cash transactions. Cash will take away the appraisal challenge.
If you are thinking of buying in Kuau Bayview or own a home in the neighborhood and would like to get a better sense of your market value, the Maui Real Estate Team would welcome the chance to sit down with you for a free consultation. Contact The Maui Real Estate Team today to discuss your real estate needs.
