Maui Real Estate Market Update Q3 2022 Vol. 6


Maui Market Musings Volume XVIII tackles the notable numbers from August 2022 Real Estate Sales on Maui. It even delves into a nuanced discussion of the (spoiler alert) decrease in median home prices on island and what it may mean. This edition originally included a discussion of Kapalua 2022 market activity, but I am not sure anyone would make it through the two subjects together without consuming dangerous levels of caffeine. Look for that post early next week. Without further ado…

Notable Numbers from the August Home Sales

With Labor Day passed, It’s a good time to took a look through the August Home Sale numbers. The numbers below are the most noteworthy with August 2021 and August 2019 data points provided for comparison. The numbers are different from the Realtor’s Association of Maui numbers because they exclude the islands of Molokai and Lani.

  • Maui Realtors reported 82 homes sold in August of 2022. That is 32% lower than the 120 homes sold in August of 2021. It is 15.5% lower than the 97 homes sold in August of 2019.
  • Of the 82 homes that sold, 14 or 17.07% sold for over asking price and 37 or 45.12% sold for asking price or higher. That is well below what we saw during August of 2021 when 40.83% sold for over asking price and 61.67% sold for asking price or higher. It’s still well above what the market was like in August of 2019. At that time, 11.34% of sales closed for over asking and 28.87% sold for asking price or above.
  • Of the 82 homes sold, 21 or 25.6% of buyers reportedly paid cash.
  • The median price of the homes sold in August is $1,037,500. That is down 2.4% from the August 2021 median of $1,062,500. The August 2022 median is 27.6% higher than the median price in August 2019.
  • The average price of homes sold in August 2022 is $1,537,666. That is 10.9% lower than last August’s average sales price of $1,725,993. The August 22 average is 23.67% higher than the August 2019 average of $1,243,316.
  • The lowest priced home to sell in August closed for $230,000. That is also the lowest sale on the island of Maui all year. The off market sale involved a 2 bedroom, 1 bathroom home with 1,012 square feet of living space on a 7,658 square foot lot. There were no photos or details on the condition of the home.
  • The highest priced transaction in August closed for $7,900,000. The home in the Pineapple Hill subdivision of Kapalua has 6 bedrooms, 6.5 bathrooms and 7,784 square feet of living space.
  • The home in Pineapple Hill was one of three sales over $5,000,000 and one of fourteen that closed for over $2,000,000.

Let’s Talk About Median Prices and Home Values

I would imagine the fact that this August’s median is lower than last August’s median raised a few eyebrows. Does mean that we may be seeing values decrease? I think this merits some discussion.

If you are a long term reader of this blog, you will know that I am wary of tying shifts in median price to shifts in home values. The composition of sales can be a big driver of month to month shifts in median prices. A lot of lower priced homes selling in a month could drive down median prices while more high end sales may drive up median prices. Maui’s not the easiest real estate market for tracking changes in price. The volume of sales is relatively low and the inventory is heterogeneous. Even some of our more cookie cutter subdivisions have variability in views and location that can impact value.

I like quantitative evidence a lot more than anecdotal evidence. At this point, I can’t point to any clear numbers that support price drops. That said, a case can be made that some homes on Maui that sold during the first five to six months of this year would sell for less now. Competition remained fierce in the first quarter and bidding wars were common. Borrowing costs were still a lot lower than they are now. Investors were still active. FOMO or fear of missing out on low borrowing costs and limited inventory meant buyers bid aggressively pushing up prices.

Fast forward to this summer and the dynamic changed. The pool of buyers is significantly smaller due to higher borrowing costs and an absence of investors. We are definitely past the FOMO phase of the market. With a lot less buyer demand, we are starting to see some properties struggling to sell. While I know this is speculative, I surmise that some of these properties that are sitting would have attracted multiple buyers earlier in the year. The competition would have pushed prices upwards. Without competition, some of these are sellers are needing to reduce prices.

Now, does this mean home prices are going down across the board? Absolutely not. At this point, I would argue that this is a phenomenon limited to lower price points in the market. In particular, it is confined to lower priced properties with flaws that FOMO buyers forgave, but current buyers are less willing to accept. There are other market segments where inventory is starting to build. I could see those parts of the market start to see drops in value, but we aren’t there yet. It is also worth pointing out at that this market is incredibly variable. Above asking price sales are still higher than they were pre-Covid and there are still still homes closing for all time neighborhood highs.

Will we start to see more broad based decreases in value? That’s tough to say. We share one attribute with some of the markets that are seeing downward pricing pressure and that is we had a high number of work from anywhere relocations. What differentiates us from the markets that are seeing price decreases is our current lack of inventory. We are still well below 2019 inventory levels with no clear relief in sight. Ultimately, the balance between supply levels and demand will dictate our price trajectories. It’s also likely that this balance will continue to vary by community and by price point.

Notable August Condo Sales Numbers

I present the condo numbers with the same framework as the home sale numbers. They differ from the Realtor’s Association of Maui statistics because they exclude the islands of Molokai and Lanai.

  • Maui Realtors reported 103 condos sold in August 2022. That is a 44.9% drop from the 187 sales in August 2021. It is 13.45% lower than the 119 condos sold in August of 2019.
  • Of the 103 condos sold, 21.36% sold for over asking price and 45.63% sold for asking price or above. In August of 2021, 27.81% sold for over asking and 66.84% sold for asking price or above. In August of 2019, 12.5% sold for over asking price and 39.17% sold for asking price or above.
  • Of the 103 condos sold, 52 or 50.49% paid cash.
  • The median price of the 104 condos sold last month is $820,000. Last month’s median is 26.15% higher than the August of 2021 of $650,000. It is 60.78% higher than the August 2019 median of $510,000.
  • The average price of condos sold in August 2022 is $1,233,249. That is 30.88% higher than the average sales price of $949,939 in August of 2021. It is 40.09% higher than the 2019 average sales price of $887,539.
  • The lowest priced condo to sell in August of 2022 closed for $150,000. The 1 bedroom, 1 bathroom unit is located in the Harbor Lights Condominium in Kahului.
  • The highest priced condo to close in August of 2022 sold for $9,200,000. The 4 bedroom, 4.5 bathroom condominium with 4,817 square feet of living space is located in the Kula Villas complex within the Makena Golf and Beach Club.
  • The Kula Villas sale is one of five transactions that closed for $5,000,000 or higher and one of seventeen sales that closed for more than $1,500,000.

A Few Comments on the Condo Numbers

Since we broached the subject of home values, I might as well go down the worm hole of discussing condo values. There is a pretty clear contrast in this month’s median home and condo prices. While median home values are below August 2021, the median condo value is well above August 2021. Again, changes in median prices don’t always reflect changes in values.

However, the condo market remains more resilient than the home market on island. I am continuing to see upward pressure on prices in the vacation rental and second home condo market. Demand for the limited inventory remains strong. Some of the condo properties geared toward island residents like Kihei Villages and Southpointe seem to be losing the steam that they had earlier this year. Plain and simple, this part of market is cooling faster than other parts of the condo market due to affordability. If borrowing costs remain closer to 6% or higher and inventory grows at all, this part of the market could also start to see decreasing values. Like the home market, this ultimately depends on the balance between supply and demand.

Some Maui Beauty to Brighten This Post

Contact The Maui Real Estate Team

Contact The Maui Real Estate Team with questions, comments or feedback or if you need assistance buying or selling property on Maui. Market conditions on island are varied and dynamic. Now more than ever, it’s important to have experienced and savvy representation. We look forward to hearing from you to answer questions and learn more about your real estate needs.

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