Maui Real Estate Market Update Q4 2023 Vol. 2

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Welcome to our latest Maui Market Update. We provide information that you don’t get in the local Realtor Association statistics including data on new pending sales, overall pending sales and inventory by price point and district.

This volume looks at market conditions and inventory trends in November, gives a few numbers from month to date December activity and discusses some of the market dynamics in play as we start the island’s traditional busy season for real estate activity. Keep reading to learn more.

November Market Activity

The tables below show new inventory, new pending sales and sales in November. Activity for the previous five Novembers provide additional context for this November’s numbers.

  November 2023 November 2022 November 2021 November 2020 November 2019 November 2018
Homes 60 82 114 97 125 147
Condos 135 114 188 157 208 153
New Inventory in November of 2023 compared to the previous five Novembers.

New home inventory came in 27% lower than last November. New home listings for the month were 52% and 59% below November of 2018 and 2019 respectively. New home inventory continues to come in well below a normal market.

Condo inventory was up 18% above November of 2022. New condo listings were 35% and 12% below November of 2019 and November and 2018.

  November 2023 November 2022 November 2021 November 2020 November 2019 November 2018
Homes 57 64 91 82 87 74
Condos 59 66 177 145 145 108
New Pending Sales in November of 2023 compared to the previous five Novembers

Buyer activity remained quieter than usual in November. New home pending sales came in 11% below November of 2022. The November pending home numbers came in 34% and 23% behind November of 2019 and November of 2018.

November new pending condo sales came in 11% below November of 2022. November new condo pendings came in 59% and 45% below November of 2019 and 2018.

  November 2023 November 2022 November 2021 November 2020 November 2019 November 2018
Homes 41 59 100 98 72 73
Condos 50 71 151 131 141 115
November Sold Transactions Compared to the previous five Novembers

Closed transactions in November came in particularly low. The 41 home sales is 31% below November of 2022, 43% below November of 2019 and 44% below November of 2018.

The 50 closed condo transactions is 30% below November of 2022, 65% below November of 2019 and 57% below November of 2018. The really low sales numbers are a lagging indicator from the much lower levels of buyer activity in the two months immediately after the Lahaina fire.

End of November Maui Home Inventory

The charts below show active and pending home inventory by price point and community at the end of November with the previous two months of the year provided for context.

  9/30/23   10/31/23   11/30/23  
  Active Pending Active Pending Active Pending
<$750,000 10 9 12 6 9 (-3) 11 (-1)
$750,000-$999,999 18 13 22 16 14 (-8) 21 (+5)
$1,000,000-$1,499,999 40 38 44 39 38 (-6) 42 (+3)
$1,500,000-$1,999,999 28 12 29 14 28 (-1) 19 (+5)
$2,000,000-$2,999,999 31 9 35 7 33 (-2) 5 (-2)
$3,000,000-$4,999,999 26 7 26 7 34 (+8) 5 (-2)
$5,000,000-$9,999,999 31 4 31 4 32 (+1) 2 (-2)
$10,000,000-$19,999,999 11 0 11 0 13 (+2) 0
$20,000,000+ 4 0 4 0 4 0
Totals 199 92 214 93 205 (-9) 105 (+12)
Maui Active and Pending Home Inventory by price point on the last day of September, October and November
  9/30/23   10/31/23   11/30/23  
  Active Pending Active Pending Active Pending
Haiku 20 10 24 7 19 (-5) 9 (-2)
Hana 12 1 11 1 10 (-1) 1
Ka’anapali 11 2 11 0 11 2
Kahului 5 8 7 6 6 (-1) 8 (+2)
Kapalua 5 1 5 2 6 (+1) 1 (-1)
Kihei 27 13 31 11 29 (-2) 15 (+4)
Kula 25 10 26 8 25 (-1) 6 (-2)
Lahaina 11 1 10 5 17 (+7) 4 (-1)
Makawao 12 14 11 16 12 (+1) 14 (-2)
Napili/Kahana/Hono 8 1 10 3 11 (+1) 4 (+1)
Pukalani 8 2 5 4 3 (-2) 6 (+2)
Sprecks/Paia 8 2 9 1 7 (-2) 1
Wailea 17 4 20 4 25 (+5) 3 (-1)
Wailuku 21 23 25 25 19 (+6) 30 (+5)
Maui Active and Pending Home Inventory by Community on the last day of September, October and November

Five Notable Things About the End of November Home Inventory

Active home listings decreased 4.3% between the last day of October and the last day of November. The total number of pending home sales increased 12.9% between the end of October and the end of November.

Active home inventory decreased at all price points below $3,000,000 with the biggest drop between $750,000 and $999,999. The inventory of active home listings increased at all price points over $3,000,000 and above with the exception of the $20,000,000 plus range.

This price point remained unchanged. The biggest increase occurred in the $3,000,000-$5,000,000 price range.

Pending home sales increased at five price points, decreased at 4 price points and remain unchanged at the price points of $10,000,000 and above. The bulk of the increased pending sales occurred between $750,000 and $2,000,000. While the decrease in pending sales occurred in the price points between $2,000,000 and $10,000,000.

Looking at active inventory at a community level, inventory decreased in seven districts, increased in five districts and remained unchanged in Ka’anapali. The biggest decrease in active listings occurred in Haiku.

The biggest increase occurred in Lahaina. The bulk of the increase in Lahaina was in the Launiupoko subdivision located South of Lahaina Town. Wailea and Wailuku also saw a healthy bump in active inventory.

Pending sales increased in five communities, decreased in six and remained unchanged in three districts. Kihei and Wailuku saw the biggest increase in pending sales.

The communities where pending sales decreased tended to see modest changes. All saw a decrease of one or two pending sales from the end of October.

End of November Maui Condo Inventory

The chart below shows end of the month active and pending condo sales by price point and district. It is worth mentioning the boost that Wailea and some of the higher price points receive from pending sales at La’i Loa at Wailea Hills. The condos at this new development went under contract in 2020 and 2021 and just started to close in the last couple of months.

The bump is diminishing in the chart below with eleven additional sales reported in November. That means there are still 55 long term contracts in that development bumping up pending sales.

  September 30, 2023   October 30, 2023   November 30, 2023  
  Active Pending Active Pending Active Pending
<$250,000 0 2 0 0 0 1 (+1)
$250,000-$499,999 14 11 13 10 19 (+6) 7 (-3)
$500,000-$749,999 32 24 35 19 34 (-1) 32(+13)
$750,000-$999,999 40 10 51 17 57 (+6) 25 (+8)
$1,000,000-$1,499,999 37 12 44 12 57 (+13) 21 (+9)
$1,500,000-$1,999,999 29 30 31 25 39 (+8) 22 (-3)
$2,000,000-$2,999,999 20 39 19 33 26 (+7) 30 (-3)
$3,000,000-$4,999,999 12 17 18 15 26 (+8) 13 (-2)
$5,000,000-$9,999,999 7 0 8 0 9 (+1) 0
$10,000,000+ 1 0 3 1 4 (+1) 1
Totals 192 145 222 132 271 (+49) 152(+20)
Active and Pending Condo inventory by price point on the last days of September, October and November.
  September 30, 2023   October 31, 2023   November 30, 2023  
  Active Pending Active Pending Active Pending
Ka’anapali 34 9 40 7 44 (+4) 8(+1)
Kahului 2 5 2 1 5 (+3) 1
Kapalua 11 1 12 2 16 (+4) 2
Kihei 64 25 67 27 78 (+11) 46(+19)
Lahaina 0 0 0 0 1 (+1) 0
Ma’alaea 1 4 5 1 6 (+1) 7 (+6)
Napili/Kahana/Hono.. 47 13 60 16 76 (+16) 15 (-1)
Wailea 26 79 30 70 38 (+8) 64 (-6)
Wailuku 7 9 5 8 6 (+1) 9 (+1)
End of the month active and pending condo inventory in September, October and November

Five Notable Things About the End of November Condo Inventory

Active condo inventory increased 22% between the end of October and the end of November. The total number of pending condo sales increased 15% between the last day of October and the last day of November.

The increase in active condo inventory occurred in all price points but two. The biggest increase in inventory occurred in the $1,000,000 to $1,499,999, but the increase was substantial in all but the highest price points.

The two price points that did not see an increase were below $250,000 and the $500,000-$749,999 price point. It’s notable that the active inventory below $250,000 remains at zero. It is increasingly rare to find condos on Maui for below $250,000.

The month to month change in pending sales by price point are more mixed. Four price points saw an increase in pending sales, four saw a decrease and two remain unchanged. The three price points between $500,000 and $1,499,999 saw the biggest increase in pending sales.

The three price points between $1,500,000 to $5,000,000 saw the biggest decrease. Most of that stems from the closes at La’i Loa.

Looking at active listings by community, all of the districts increased the number of active listings between the end of October and the end of November. Kihei and the Napili, Kahana and Honokowai area saw the biggest increase.

Kihei and Ma’alaea saw the biggest increase in pending sales. The Wailea market saw the biggest decrease in pending listings, again thanks to the number of closes in La’i Loa.

November Market Thoughts

There were a few things that stood out to me in the numbers. First, home and condo pendings increased. The combination of the Lahaina fires and high interest rates caused buyer activity to fall substantially in August, September and October.

As a second home market, the substantial decrease in off island visitors meant fewer potential buyers on island. While rates exacerbated affordability challenges.

The increase in pendings is both a reflection of a modest increase in buyer activity, but also a reflection of lower sales in the month of November. As mentioned above, the low November sales are a reflection of the slower buyer activity earlier in the fall.

We have recovered from the bottom in pending sales numbers and we should continue to see pending sales increase moving forward.

The next thing that stands out is the the varied trajectories for active home and condo listings. Active home listings fell between the end of October and the end of November. While active condo listings jumped by a healthy margin during the same period of time.

New home inventory remains well below normal. I wouldn’t call buyer demand on the month to be all that robust either. There was actually more new inventory than there was pending sales. That said, there were a fair number of homes withdrawn from the market.

Some of those cancelled listings were on the market for two months or less. So that begs the question why? Are some sellers heeding the call for rentals? Did quieter market feedback cause some sellers to pull their listing until busy season?

At this point, I don’t have any data to support either proposition. We shall see if some of those listings come back this winter.

The condo inventory continues the steady increase we have seen since September. We are seeing more properties come to market with fewer buyers purchasing those new listings.

While West Maui continues to see the biggest increase in listings since the summer, the increase is happening in all areas of the island.

There are a few factors driving the increase in condo inventory. Seasonality is one factor. Buyer season starts around the holidays and many sellers will opt to list as that time of year approaches. Listing your second home isn’t near the inconvenience as listing your own residence.

We are also seeing some properties come to market that likely would have been listed earlier in the fall. Some sellers delayed plans to list particularly in West Maui where the fires had the most direct impact.

Another factor in the inventory increase, albeit smaller, is assessments. There are a number of condo developments on the island that have larger maintenance projects that require assessments. With values high, rental income down and the cost of ownership up, some owners are opting to sell.

A Couple of December Market Observations

While I plan to do a full December stats posts in the coming weeks, we are almost to the end of the month and I would be remiss if I did not mention a few things I have seen in the month to date.

Condo inventory continues to grow this month. As of December 27th, the total inventory is up 27% since the end of November. The number of condos listed for sale is higher than at any point in time since March of 2021. Active home inventory on the other hand continues to decrease through December.

That brings us to other notable thing that happened in December, mortgage rates decreased significantly to levels not seen since May of 2023. Current rates are close to 6.6% for a conventional 30 year fixed mortgage. Rates between 7.5% and over 8% throughout the fall exacerbated affordability challenges.

Contrasting Dynamics to Start Buyer Season

The time around Christmas and the New Year traditionally mark the start of our busy season for tourism and our busy season for buyers. As it stands, we have some interesting dynamics at play to start the season.

Altos research recently discussed the correlation between mortgage rates and inventory. They showed that drops in mortgage rates tend to stimulate more demand than there is supply. That causes inventory to decrease. If that is the case, should we expect inventory to drop on Maui?

A chart that shows a correlation between mortgage rates and inventory
This Altos Research chart shows how inventory tends to increase as rates rise and drop when rates fall.

That remains to be seen. The Maui market doesn’t always follow the national trends under normal circumstances. Needless to say, this isn’t normal circumstances as we face the aftereffects of the Lahaina Fire.

There is a significant struggle to provide housing for those who lost homes. The Mayor of Maui is trying to incentivize owners of vacation rental condos to convert to long term rentals to help meet demand.

The initial efforts are offering a carrot by giving breaks on property taxes. If that fails to work, a stick may be used by increasing property tax rates on short term rentals.

The governor is considering stronger measures such as a two year moratorium on short term rentals. Until there is clarity on legislative remedies, the uncertainty may be enough to keep some condo buyers on the sidelines. Then there is a question of how the remedy or remedies utilized will impact buyer demand.

There is also the related question of how many buyers come to Maui this busy season. Tourism is recovering, but it is still below previous levels.

At least for now, an increase in inventory means condo buyers looking on island should have more options. Depending on how much demand ultimately materializes this season, they may have more leverage.

Home buyers, on the other hand, have yet to receive substantive inventory relief with single family home supplies decreasing in the last couple of months. If we follow the Altos pattern, lower rates would seem to suggest a bigger decrease in inventory is coming due to an increase in buyer demand.

I am not 100% convinced that will be the case. From discussions with potential sellers and with other realtors, our office is aware of a number of homes getting ready to go to market in January.

We shall see if the quantitative data matches what we hear anecdotally. There is also the question of whether we may see some of the properties that withdrew from the market in the fall come back to market this winter.

Home inventory of course isn’t just a determined by new listings. What about home buyer demand? Local buyers were struggling with affordability prior to the run up in mortgage rates in the fall.

Will the current rates be enough to address some of the affordability challenges? How much will lower visitor numbers impact demand for homes?

We will continue to keep you posted on market and inventory trends on this blog.

A Little Maui Beauty to Brighten This Post

A rainbow along the base of the West Maui coastline as seen from offshore.

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