Maui Real Estate Market Update Q3 2022 Vol. 4

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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

<$750,00062261611 (+5)14 (-2)
$750,000-$999,9991954326325 (-7)62 (-1)
$1,000,000-$1,499,9994337583465 (+7)25 (-9)
$1,500,000-$1,999,9993027442241 (-3)19 (-3)
$2,000,000-$2,999,9993714341531 (-3)19 (+4)
$3,000,000-$4.999,9992411271025 (-2)9 (-1)
$5,000,000-$9,999,99922823824 (+1)7 (-1)
$10,000,000-$19,999,9999213012 (-1)0
$20,000,000+31415 (+1)1
Totals193176241169239 (-2)156 (-13)
A comparison of active and pending home listings by price point on the last day of the month from May, June and July.
Haiku1512201322 (+2)11 (-2)
Hana534241 (-1)
Ka’anapali13611710 (-1)7
Kahului112482713 (+5)21 (-6)
Kapalua42535 1 (-2)
Kihei2725452248 (+3)14 (-8)
Kula2412251319 (-6)16 (+3)
Lahaina1515201818 (-2)14 (-4)
Makawao1117131214 (+1)9 (-3)
Napili/Kahana/Hono…12512310 (-2)6 (+3)
Pukalani5121277 (-5)6 (-1)
Spreckelsville/Paia12411210 (-1)2
Wailea/Makena8513415 (+2)5 (+1)
Wailuku2832393339 35 (+2)
A comparison of active and pending home listings by community for the last days of the month from May-July 2022. It does not include all communities on Maui.

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

<$250,00059281 (-1)8
$250,000-$499,9991223192511 (-8)23 (-2)
$500,000-$749,9991855314043 (+8)39 (-1)
$750,000-$999,999295444464443 (-3)
$1,000,000-$1,499,9992349293030 (+1)31 (+1)
$1,500,000-$1,999,9992134283430 (+2)33 (-1)
$3,000,000-$4,999,9991222112512 (+1)18 (-7)
$5,000,000-$9,999,9997711310 (-1)3
Totals149 293199247205 (+6)234 (-13)
A comparison of end of the month active and pending condo inventory by price point
Ka’anapali2323231524 (+1)13 (-2)
Kahului58432 (-2)8 (+5)
Kapalua71512910 (-2)10 (+1)
Kihei3595557467 (+12)60 (-14)
Lahaina14816516 8 (+3)
Ma’alaea35555 6 (+1)
Napili/Kahana/Hono…3439483440 (-8)34
Wailea/Makena1691238525 (+2)82 (-3)
Wailuku911121214 (+2)13 (+1)
A comparison of active and pending end of the month inventory by district in Maui. It does not include all districts.

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.

Price Reductions

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

Contact The Maui Real Estate Team

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.

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