Maui Real Estate Blog
Maui Real Estate Market Weekly Update April 24, 2020
Its time for my weekly update on the Maui Real Estate market. Last week, market activity was pretty anemic. This week, market activity picked up with our strongest pending sales since before the island’s stay at home order went into effect. Here are this week’s pending sales and sales numbers.
New Pending Sales
Pending sales activity increased substantially from the week of April 8th-14th. Realtors reported 13 pending home sales, 12 pending condo sales and two pending land sales. That is 337.5% increase over last week’s paltry 8 sales. While I will say this is good news, it will be interesting to see if the market sustains this level of activity in the coming weeks, it it continues to pick up at all or if this week is an anomaly. Having watched Maui statistics over the last 15 years, I know that fluctuations in activity can occur without any clear drivers. It is also worth noting that last week’s pendings are still less than 50% of the total pending sales for the last week of February. It is also down 48% from the same week in April last year.
Notes on Pending Sales
Here are a few numbers, notes and thoughts about the pending sales numbers in the last week.
- Home sales outpaced pending condo sales by a small margin. New pending home sales have outpaced pending condo sales four out of the last five weeks. This is a reversal from earlier this winter when condo sales outpaced home sales.
- Of the 12 condos that went under contract, 9 were in condo developments that allow vacation rentals. That is 75% of the pending condo sales.
- Some context is required for the numbers immediately above. In February, 62 of 130 condos that went under contract were vacation rentals. That calculates to roughly 48%.
I think there are a couple of factors at play that caused a shift in the composition of condos going under contract. The first is that a significant portion of the non-vacation rental condo market is geared towards working class residents of Maui. With the local economy reeling from the decline of tourism, demand from local buyers slowed to a trickle.
You would think the vacation rental condo market would be equally slow with a very small number of off island buyers still on island. That said, today’s real estate doesn’t require buyers to be on island to buy property. Many agents relied on video and 3D tours for vacation rentals even prior to Covid-19 as those listings could be hard to show due to bookings. With video and 3D tours, buyers are still able to evaluate properties. Almost all of the vacation rentals are currently vacant so it is easy for agents to access these units for additional video. If the video or 3-D tours look good, and the buyer knows the development, the buyer may be more likely to pull the trigger with a site unseen offer.
This Week’s Sales
Realtors reported 17 homes sold, 17 condos sold and one lot sold. Overall sales for the week were down a fraction from last week with a decrease of two transactions. The overall volume is down 31% from the same week of April last year. This week’s sales included five condo sales at Luana Garden Villas at Honua Kai. The contract for these were penned back in 2018. While it is notable that the buyers went through with their purchase despite uncertainty, they don’t represent buyers looking in the last couple of months.
Based on the volume of pending sales over the last month, I would anticipate sales volume will continue to dip over the coming weeks.
More Market Thoughts
At this point, I remain wary of prognostication on the outlook for the Maui real estate market. I think there are too many unknowns about the duration of the Covid-19 pandemic’s impact on lifestyle and the economy. That said, I am seeing more economist predictions on the outlook for the national real estate market. A couple of days ago, I read an article that was originally published on Realtor.com discussing different perspectives on the market outlook. One takeaway from the article is that market fundamentals are much stronger at this point than they were in 2008. Supply is way down and there are fewer junk mortgages on the market. The lack of housing supply and stronger borrowers is what have some housing experts optimistic.
That said, that optimism hinges on the economy returning to some measure of normalcy sooner rather than later. One economist in the article stated their concern that extended stay at home orders could lead to a much bigger impact on the market. My reticence about prognostication stems from these unknowns about the economy. While some states are already taking steps to ease stay at home rules, many health experts are arguing this is premature. It is also uncertain how many members of the public are ready to return to normal. The public will need to feel safe to get back to some semblance of normalcy.
While things may be slower, the numbers show that there is still activity in the market. Contact The Maui Real Estate Team if you are considering buying or selling property on Maui . Now more than ever, you need quality representation as you navigate the market.