Post Updated September 29, 2022
It’s time for an excursion to West Maui as we continue our series of posts on market conditions in different communities around the island. The focus of today’s post is Ka’anapali. This resort community experienced a boom in activity during 2021 with rising prices and a high volume of sales. How has the market been in 2022? Find out more below as we look at year to date numbers for 2022 with numbers from 2021 and 2019 provided for comparison. There are also a few thoughts on the outlook for the rest of the year and early 2023.
Ka’anapali Home Market Numbers
- Maui Realtors reported 20 homes sold for the year to date as of September 23. That is 59.2% less than the 49 sales reported over the same period of 2021. It is 11.11% higher than the 18 reported in 2019.
- The median price of homes sold in 2022 is $2,650,000. That is 11% higher than $2,387,000, last year’s median over the same period. It is 77.91% higher than $1,489,500, the median during the same period of 2019.
- The average price of the homes sold in Ka’anapali during 2022 is $2,855,552. That compares to an average of $3,017,891 and $1,994,037 during the same periods of 2021 and 2019 respectively. This year’s average is 5.38% lower than last year and 43.2% higher than 2019.
- 20% of this year’s buyers paid over asking price for their home and 45% paid asking price or above. In 2021, 12.24% of buyers paid over asking price and 28.57% paid asking price or above. In 2019, no buyers paid over asking price and 11.11% paid full price.
- Realtors reported 30% of sales were cash transactions.
- The highest priced transaction this year closed for $5,295,000. The property in the Lanikeha subdivision included a 3 bedroom, 3.5 bathroom home with 3,086 square feet of living space and a 1 bedroom, 1 bathroom, 508 square foot cottage on a .485 acre lot.
- The lowest priced sale for the year to date closed for $1,681,050. The bank owned property in Ka’anapali Hillside actually sold via online auction for 46.17% over asking price. The home needed serious repair and renovation.
- The Ka’anapali Hillside subdivision had the most sales activity with 6 closes. Lanikeha and the Summit were the next busiest with 5 transactions each.
Thoughts on the Home Numbers and the Outlook for the Rest of the Year and Early 2023
After a rip roaring 2021 for sales, transaction activity decreased sharply this year in Ka’anapali coming in just above the pre-pandemic levels of activity during 2019. That said, decreased volume is just one part of the story. There was enough demand that 45% of all home sales closed for asking price or above. That’s even more than last year. When compared to 2019 numbers, that 45% is particularly striking. Back before the boom of the last couple years, above asking price offers were exceptionally rare and just over 10% of the buyers paid full price.
Some of the decreased sales volume can be attributed to a scarcity of listings at lower price points and within a couple of higher priced Ka’anapali neighborhoods. There were no transactions or even inventory in the Pinnacle this year, and just two listing and no transactions in Ka’anapali Coffee Farms. At this time, there is no active inventory for less than $3,000,000, with the only 2 listings below that price under contract.
Inventory isn’t as big of an issue as you move up in price range in Ka’anapali. Fifty percent of all the active inventory is priced between $5,000,000 and $7,000,000. Thus far one home sold in that price range with one additional home listed above $5,000,000 under contract.
It is worth comparing the homes that sold for between $5,000,000 and $7,000,000 last year with the current inventory in this price range. Last year’s sales included two large homes on acreage in Ka’anapali Coffee Farms and a 6,575 square foot home in the Pinnacle. While size isn’t everything when it comes to value, this year’s $5,000,000 and up listings tend to be smaller homes on smaller lots than last year’s sales. The active inventory includes four homes in Lanikeha with the largest home coming in at 4,557 square feet and a home in Kaanapali Coffee Farms substantially smaller than both of last year’s highest priced sales in that neighborhood.
It is also worth noting that all of the active listings in this range appear to be spec builds. There are two more spec builds in Lanikeha priced between $4,000,000 and $5,000,000. This volume of spec building is almost unheard of in the Maui Luxury home market. It will be interesting to watch the sellers of these spec builds through the rest of the year, especially if we see additional shifts in the market and or the economy. I surmise that it may take some pencil sharpening for some of those properties to go under contract.
As for overall Ka’anapali luxury home market activity in late 22 early 23, inventory constraints at lower price points will impact sales volume. Any additional sales beyond the current pendings will mostly come via new inventory or price adjustments. Rising borrower costs may also curtail activity. While there is a fair amount of cash in the market, rate increases will impact affordability for some buyers. Negative economic news and declines in the equity markets could also cause some buyers to put second home purchases on hold.
Ka’anapali Condo Market Numbers
- As of September 23rd, Maui Realtors reported 123 condos sold in Ka’anapali for the year to date. That is 37% fewer than the 194 that closed over the same period of 2021. It is 14.95% more than the 107 that sold during the same period of 2019.
- The Median price of the condos sold for the year to date is $1,450,000. This is 52.63% higher than the median of $950,000 from last year over this same span. It is 63.66% higher than the median for the same period of 2019.
- The average price of the condos sold for the year to date is $1,724,465. That is a 31.67% increase over last year’s average through September 23rd. It is 54.15% above the 2019 average during the same time span.
- 23.58% of all of the condos sold thus far this year sold for over asking price, and 47.15% sold for asking price or above. That’s well above last year’s numbers of 8.76% over asking and 44.33% for asking price or above. Just to give some context as to what is was like pre-Covid, in 2019 only 2.8% of sales sold for over asking and 16.82% sold for asking price or above.
- Maui Realtors reported that 51.21% of all sales were cash transactions. That’s up a little over the 50% reported last year. Cash purchases were actually higher at 59.81% in 2019.
- The lowest priced condo to sell in Ka’anapali is a leasehold studio unit in Ka’anapali Shores that closed for $325,000.
- The highest priced condo to sell closed for $5,899,000. The 3 bedroom, 3 bath unit in the Konea Tower at Honua Kai has 2,280 square feet of living space.
- Honua Kai is the busiest condo development thus far this year with 37 closed transactions. Ka’anapali Shoes is second busiest with 20 sales for the year to date. The Masters had the third most inventory with 15 sales.
Ka’anapali Year to Date Review and Late 2022 Early 2023 Market Outlook
While the Ka’anapali Condo market for the year to date did not see a repeat a the astounding sales volume of 2021, it remained a busy market well above the levels seen in 2019. If anything, constrained inventory and continued demand made for a more competitive market than last year with more properties closing for over asking price. The market conditions meant continued upward pressure on prices.
As it stands, the vacation rental and second home condo market continues to be resilient as some other types of property on island start to feel a market shift. As of the 26th of September, there are only 17 active condo listings on the market in all of Ka’anapali. Limited inventory improves the position of sellers and continues to exert at least some upward pressure on pricing. It will be interesting to see how the limited supply balances out against demand. Again, the cash in this market makes it a little less interest rate sensitive, but there is still some impact. As of right now, a 30 year fixed on a vacation rental condo is being quoted as high as 8.5%. Needless to say, a lot of borrowers are opting for ARM products. Even those are a lot more expensive.
The chart above shows pending condo sales by month in Ka’anapali over the last five years. A few things worth noting when looking at the chart. The first things is that 2021 and 2020 are anomalies with 2019 and 2018 more normal markets. If you are wondering about the April 2018 spike in pending sales, the market got a boost from a new development, Honua Kai Luana Gardens Villas. It’s also worth noting that while 2022 pending sales started stronger than 2019 and 2018, monthly pendings for 2022 are running behind both 2019 and 2018 since May. The last thing is that while there is a little more activity in the first half of most years, the second half of the year sees steady activity. I would suspect that we will see “below normal” market activity through the rest of the year.
Based on inventory and seasonality, I would anticipate relatively limited sales volume to close out the year. With the amount of inventory available, the economy in flux and borrowing costs the highest since 2002, it looks like a quieter start to 2023 could be in order. We shall see what happens going forward.
Contact The Maui Real Estate Team
Contact The Maui Real Estate Team if you have questions about this post or if you need assistance buying or selling property in the Ka’anapali area. You can find all of the current active Ka’anapali Homes for Sale, Ka’anapali Condos for Sale and Ka’anapali Land for Sale on MauiRealEstate.com.
