Keep Austin Weird. Keep Portland Weird. Keep Paia weird. Yes, it’s time to check in on market conditions in Maui’s quirky North Shore beachtown. The Paia real estate market is doing it’s best to keep things strange with market behavior different this year compared to most other Maui communities.
This update focuses only on Paia and Kuau. Our local MLS lumps these areas together with the Spreckelsville neighborhood. We think that these markets are different enough that they merit their own discussions. If interested, we did a Spreckelsville update earlier this summer.
Notable Numbers from the 2022 Paia Real Estate Market
- As of September 19th, Maui Realtors reported 12 home sales and 1 condo sale during 2022. By comparison, there were 22 home sales and 3 condo sales during the same period of 2021. That is a 45% decrease in home sale activity. There were 12 home sales and 3 condo sales during the same period of 2019.
- Of the 12 homes sold this year, 3 homes sold for over asking price and one sold for full price. That is 33% of the inventory selling for asking or above. Last year, 6 homes sold for above asking price and 6 sold for full price. That is 54.5% selling for asking price or above. In 2019, no homes sold for over asking price while just under 42% sold for full price.
- Of the 12 homes that sold, 6 sold for cash. The listing realtor for the one Kuau condo sale also reported it to be cash transaction.
- The median price of homes sold in Paia is $969,999. That is 7.8% higher than last year’s median of $900,000 and 45.5% lower than the 2019 median of $1,411,562. Note, this is a classic case of how changes in median prices don’t necessarily reflect changes in values, particularly in a small market. Needless to say, prices rose substantially since 2019.
- The average sales price of the homes sold in 2022 is $969,166. That is 56.73% lower than the 2021 average of $2,239,886. It is 28.31% lower than 2019 average of $1,310,010.
- The lowest priced home sale for the year to date closed for $650,000. The 3 bedroom, 1 bathroom home with 1,440 square feet of living space on a 6,604 square foot lot is located in the Paia Halelani subdivision. It’s worth noting that the home needed significant repairs and updates when purchased.
- The highest priced sale in Paia for the year to date closed for $1,445,000. The 3 bedroom, 2.5 bathroom home with 1,512 square feet of living space is located on a 6,094 square foot lot in Kuau Bayview. It sold before hitting the MLS.
- Skill Village showed the most year to date sales activity of any neighborhood in Paia with 5 sales. Paia Halealani and Kuau came next with 2 sales each.
- The one condo sale in Kuau Plaza this year closed for $700,000. The one bedroom, one bath unit set a new all time record high in the complex. That’s particularly noteworthy since the previous high sale from last year is a 2 bedroom.
Making Sense of The Numbers
Maybe I am leaning into the weird theme a little too much. Paia’s sales activity compared to last year shows some similarity to a lot of other communities on island. Lower sales volume is common throughout the island due to both inventory constraints and slackening demand. There are really two numbers in Paia and Kuau that stand out as being unusual. The average sales price and the high home sales price both caught the eye. Both are well below not just 2021 numbers, but also 2019 sales numbers.
You can attribute both the average sales price and the low high sales priced to a lack of activity in the high end market. During the same period last year, there were 8 transactions that closed for more than this year’s high sale. That includes 3 sales for $8,000,000 or more. So what’s driving the lack of luxury market activity? Is it inventory? Is it demand? A combination of the two or something else?
Let’s look at the inventory side of things first. At first glance, inventory does not appear to be an issue. The list price of 5 out of 7 current active listings is over $2,000,000. All of those listings have over 100 days on market. Four additional listings over $2,000,000 were on the market in Paia this year but subsequently withdrawn. That could speak to lack of demand, but little to no high end demand goes against the grain compared to other high end market around the island.
Assessing demand isn’t straight forward. There may be buyers shopping for properties in this price range, but if the inventory in question or the price of the inventory in question does not appeal to the market, you aren’t going to see that demand reflected in the stats.
Let’s look at Paia and Kuau oceanfront activity. Last year, there were three sales on the water as of September 19th including 2 sales for $8,000,000 or above. Those transactions were two of the three highest priced sales in Paia and Kuau to date. High end buyers in the market for Paia or Kuau oceanfront had two oceanfront options this year. Both properties listed well above the all time high sales price.
Now, it certainly isn’t outside the realm of possibility to set new high prices in the current market. That said, it’s not too hard to make a case that the list price for both properties is well above market. The one listing, currently off the market, sold in 2021 for $5,200,000. Without significant improvements, the seller relisted for 90% higher than what they paid a year earlier. The other listing is now on the market for the 13th time since 2005. With now almost 3,000 days on market, you can safely say the market is providing some feedback on the list price.
Based on the above, it seems like some of the owners of Paia and Kuau’s higher priced listings may need to sharpen their pencils if they want to find the market. It’s worth noting that there is one listing for over $2,000,000 under contract. 2012 was the last year where there were no sales over $2,000,000 in Paia or Kuau.
Outlook for the Rest of the Year and Early 2023
Including the one pending transaction noted above, there are three total pending sales in Paia and Kuau at this time. So there should be at least some sales activity to close out the year. The question is what other market activity can we expect in Paia and Kuau. I look at recent demand for new listings, inventory and seasonality to try to get some sense of what we might expect the rest of the year.
When gauging current demand in a community, I like to look at the percentage of properties that go under contract within 10 days of coming to market. I will be honest, I am somewhat wary of how effective this metric is for a community like Paia and Kuau just due to the low sample size. Only two listings came to the market since August 1. One went under contract within 10 days, the other went under contract within a month. That would appear to suggest that there is still some demand out there, but again small sample size.
The available inventory is likely to be a limiting factor for activity. With just seven total listings, no listings under $1,000,000 and all active listings on the market for more than 100 days, it would seem activity will likely need to come via a combination price adjustments, negotiations or new inventory.
Last thing I wanted to look at is seasonality in the Paia and Kuau area. The chart above shows pending sales in the area by month over the last five years. While the first half of the year tends to be busier than the last quarter, December is typically a good month for sales activity in Paia. We shall see if that’s the case this year.
One last thing to note, recent interest rate hikes add head winds to the current market. While the Paia market is a little less exposed due to the percentage of cash transactions, the rate increases will impact affordability for financed buyers.
Contact The Maui Real Estate Team
Our office is located in Paia just off Baldwin Avenue. Needless to say, we keep close tabs on the Paia market. Contact The Maui Real Estate Team for assistance buying or selling property in the Paia area. We leverage our local knowledge, experience and connections to provide quality representation. Check out our Paia Real Estate Page to look at current inventory and to search by neighborhood.
