We continue our series of weekly updates on the Maui Real Estate market during these difficult and dynamic times. After seeing a sharp drop in activity around and immediately after stay at home orders, recent weeks show a steady but slow increase in activity. We provide this week’s numbers as well as a look back at the overall April numbers in this week’s post.
Maui Realtors reported a slight increase in pending sales compared to the week prior. The 36 new pending sales reported are a 9% increase over last week’s 33 new contracts. The 36 pending sales is 43% lower than the number of properties that went under contract over the same seven day period last year. This weeks pending sales included 19 homes, 15 condos and 2 lots.
Notes on This Week’s Pending Sales
- This is now three straight weeks with pending sales increasing over the week prior. This is the slowest week to week growth though.
- Pending home sales outpaced condos for the fifth time in the last six weeks. Condo sales outpaced home sales 11 out of the last 12 months. The shift to more pending home sales appears to be a shift in the market.
- Of the 15 pending condo sales, 8 may be rented legally as vacation rentals. One of the other pending condos is located in a resort area. It appears as if the second home market is still seeing the lion share of the condo activity.
This Week’s Sales Activity
Maui Realtors reported 36 sales between April 29th and May 5th. That is 14% lower than the week prior and the second lowest weekly sales number since the beginning of the pandemic. The 36 closed transactions is 42% lower than the same seven day stretch of 2019. This last week’s closed transactions included 12 homes sold, 16 condos sold and 8 lots sold. Lot sales received a boost from four sales in a new subdivision. The lots went under contract last year.
Looking at the Overall April Numbers
I thought it would be worth looking at monthly numbers now that April is over. With weekly numbers, the trend is positive with more pending sales each week. That’s due in part to how little activity there was towards the beginning of the month. This is really apparent when you look at how low pending sales were for this April compared to last April. While last week’s numbers are down 43%, last month’s numbers are down 66%.
The 45 pending home sales last month were just 41% of the total from last April. Realtors reported only 38 new pending condo sales in April. That is just 28% of last April’s Condo pending sales. The 6 pending land sales reported are just 35% of last April’s land pending sales. While the monthly numbers are a stark sign of the initial impact of Covid-19 on market activity, the weekly numbers are a silver lining with activity slowly, but steadily increasing.
The sales numbers for April 2020 show more than anything else that sales are a lagging indicator when it comes to demand. The bulk of the closes are from contracts that were penned in February and March. Both home and land sales actually outpaced the numbers from March of 2019. This also suggests that not too many deals fell apart due to the impact of Covid-19. To be clear, some transactions cancelled, but many more continued to closing.
It appears as if the trajectory of the Maui Real Estate market is following some real estate economists’ predictions for a check mark shaped recovery. What is meant by a check mark is a steep drop in activity with a quick trip to the bottom with a slower pace of recovery. It will be interesting to follow things over the next couple of weeks to see if the rate of recovery continues, slows or stalls.
Earlier this week, the University of Hawaii Economic Research Organization (UHERO) posted a few different scenarios for the rate and time frame of economic recovery. Even UHERO’s optimistic projections point to significant economic headwinds for the Hawaiian Islands with a substantive return of tourism still months away.
Lack of housing inventory remains a significant factor in our housing market. The pace and time frame of the overall economic recovery will be a big driver for the demand side of the equation. Limited supply provides upward pressure on values. Limited demand provides downward pressure on values.
There is still a market for real estate on Maui. Local residents need homes and potential second home owners from all over the world dream of owning a place on island. Contact The Maui Real Estate Team if you are a buyer or seller venturing into the market. We bring experience, negotiating skill and a commitment to provide the latest market data so our buyers and sellers may make truly informed decisions. We look forward to being of service.