I wanted to take a quick look at the Wailea condo market now that we are a month into our “peak buyer season”. I spent some time looking at the current inventory and I was left with four observations and one question about the current market dynamics.

Wailea and Makena Condo Inventory

At the time of this post, there are 27 active condo listings in Wailea. While that’s a far cry from the half dozen active listings we saw briefly in early 2022, it’s still well below normal. There are four condo complexes in Wailea with no active listings. There are six condo developments with just 1 active listing at this time. None of the Makena condo developments have any active or pending listings.

The Highest Price Points have the Most Condos for Sale

The two condo developments with the most listings are Wailea Point and Wailea Beach Villas with 6 and 4 listings respectively. In addition to the condos at those two respective developments, there is also a top row Ho’olei and a rare Andaz listing. If you are shopping at higher price points, you have a lot more options to choose from.

Prices Remain High

The second half of 2022 saw prices decrease in a number of markets on the mainland. The situation on Maui is more nuanced. Small segments of the single family home market saw values decrease. Other segments held value or even increased in value. Wailea is one of those areas where values held or increased in the second half of 2022.

This is reflected by the current Wailea inventory. Seventeen of the twenty-seven active listings are seeking new record high sales prices for their development or at least their particular floor plan. That isn’t too much of a surprise considering the fact the values are at all time highs. That said, not all of the condos seeking record high prices have the location, view or the finishing to merit those lofty numbers.

Buyer Activity Is Low

Thus far, busy season is off to a slow start in Wailea. There are 5 condo resales under contract currently. Only 3 of the 5 went under contract since Christmas. This level of activity is well below the same period of time during the past two boom years. It is quite a bit less than recent pre-Covid years. In fact, this is the lowest number of Wailea condos to go under contract to start busy season since the winter of 2013/14.

Wailea is not the only spot on the island seeing a quieter busy season. While pending sales are increasing, they are still well below normal for this time of year. Looking at Kapalua, there are three pending sales with only one new pending since the start of busy season. Ka’anapali is the busiest of the resorts with only five pending.

While Wailea’s slow start is part of a broader trend, it may also be a reflection of some of the ambitious asking prices. Which brings us to my last question…

Who Blinks First?

With low transaction volumes, it seems like something is going to have to give for us to see an increase in sales activity in Wailea. Will sellers reduce their prices? Will buyers bite the bullet? Or do we see a little bit of both?

On the sell side, the dynamics are interesting. We are seeing some price reductions, but in many instances the new asking prices are still above record highs. That tells us that the sellers truly missed the mark on their initial pricing. The sellers are also getting some mixed signals. The low transaction volume is a suggests prices should be reduced. On the other hand, inventory remains low, and there are still the occasional sales with eye popping prices. The question is whether sellers are trying to find the market or that elusive solitary buyer willing to pay a premium.

For buyers, the record high prices may be increasingly hard to swallow. That is especially the case for second home buyers coming from markets where decreases in value are common place. On the other hand, if you are seeking out a condo in one of the developments with little or no inventory you may be inclined to jump when something comes to market that checks all of the boxes. Further decreases in mortgage rates may also bring some buyers off the fence, but the impact of lower rates is not going to be as significant in the Wailea market. Keep in mind, 62% of all transactions were cash in Wailea and Makena last year.

Contact The Maui Real Estate Team

We will continue to monitor the Wailea Condo market as we progress further into buyer season. Stay tuned for more updates. You can see the active inventory of Wailea Condos for sale on MauiRealEstate.com. Contact The Maui Real Estate Team with questions or for assistance buying or selling Wailea Condos. We look forward to being of service.

Once again it’s time for another edition of Maui Market Musings. Your almost weekly source for the latest and greatest Maui Real Estate Statistics and market observations. The musings are also rumored to cure insomnia for those that have no interest in real estate. Although, we need to go through clinical trials before we can make that claim officially. This edition of the musings looks at notable numbers from the May stats and a few statistics that point towards current market conditions.

Notable Numbers from the May Maui Statistics

I looked through the latest statistics from the Realtor’s Association of Maui (RAM) and did a little number crunching of my own. The numbers below represent some of the more interesting items from the May Sales activity on Maui. They are just for the island of Maui. RAM’s stats include sales on Lanai and Molokai.

May Home Sales

• Maui Realtors reported 93 home sales on Maui. That is down 20% from last year’s 116 sales.
• While increased mortgage rates in March and April likely impacted sales, low inventory remains a factor too. The end of the month inventory of active home listings between February and April averaged about 15% below the same period of 2021.
• While we may be seeing lower sales numbers, competition for the available inventory remained robust. Of the homes that sold, 35.48% sold for over asking price and 61.29% sold for asking price or above.
• That is quite a bit stronger than last May when 25.86% sold for above asking price and 50.86% sold for asking price or higher. It is also higher than April when 32.35% sold for over asking price and 55.88% sold for asking price or above.
• The median price of homes sold in May is $1,225,000. That is 20% higher than the May 2021 median home sale price.
• The increase in median is a reflection of both price appreciation and a lack of inventory at lower price points. There were only 8 homes sold on island for less than $800,000 last month. The May prior, 37 homes sold for less than $800,000.
• The average price of homes sold in May 2022 came out to $2,309,049. That is a 34% increase over last May’s median of $1,724,917.
• Strong activity in the luxury home market drove the high average price. Two homes sold for over $20,000,000. Six total homes sold for more than $5,000,000. Twenty-seven homes sold for over $2,000,000.
• The high sale for the month closed for $26,490,700. For that sum, the new owners acquired a home with 10,500 sf of living space, 8 beds, 8 baths, 3 kitchens, along with a separate pool house with room for guests, a six car garage and a caretaker’s quarters. The property is situated on an acre across the street from the ocean in Makena. This was the highest priced home to sell for the year to date.

May Condo Sales

• Maui Realtors reported 144 condo sales in May. That is 39% lower than the 237 sold in May of 2021.
• As with homes, increased mortgage rates may be tempering demand, but inventory is also impacting sales volume. The average number of active condo listings at the end of the month from February through April averaged about 56% less than the same period of 2021.
• While demand may be lower, the limited supply continues to make for a competitive market. Of the condos sold, 31.94% sold for over asking price in May. An impressive 66.67% sold for asking or above.
• That is a lot higher than the numbers from May 2021 when 15.28% sold for over asking price and 42.68% sold for asking price or above. The number of properties selling for above asking price in May 22 is down a little from April 22. That said, the percentage selling for asking price or above is higher.
• The median price of condos sold in April is $747,000. That is 21.46% higher than last April’s median.
• The average sales price for the condos sold in April came out to $1,136,318. This is 13.68% higher than the average price in April 2021.
• Luxury condo transactions remain strong with one sale over $10,000,000, 3 over $5,000,000 and 22 sold for $1,500,000 or higher.
• The highest price condo sale for the month closed for $11,900,000. That buyer now owns a 3 bedroom, 4 bathroom condo with 2,814 square feet of living space at the Andaz Residences Wailea.

Current Market Indicators

If you are long term reader of our stats post, you will know the familiar refrain that sales are a lagging indicator. We wanted to look at just a few stats that might give a better sense of current market conditions.

As noted repeatedly in the May sales stats, inventory, or lack thereof, remains a big driver in our market. On the last day of May, there were 213 active home listings in Maui County. That is a 7.5% increase from 198 listings at the end of April. On the last day of May, there were 175 active condo listings. That is just 1.7% above the 172 on the last day of April.

Nationally, the inventory of homes for sale rose 25% from April to May. Maui is clearly lagging behind the mainland when it comes to changes in inventory. That said, as noted in Market Musings X, any increase in inventory on Maui at this time of the year goes against pre-Covid trends. Inventory dropped on Maui between the last day of April and the last day of May in 2017, 2018 and 2019.

We also continue to track the number of properties going under contract within the first ten days of coming to market. Of the 55 homes and condos listed between May 18th-25th, 17 or 34.54% of the new listings went under contract within the first ten days of going on the market. That is a slight decline from the 35.55% between May 7th and 14th. It is down substantially from the 56% we reported in mid-February. For comparison to Pre-Covid days, 23.8% of listings that went to market between May 18th-May 25th, 2019 went under contract in the first ten days.

The one last metric we are trying to track is price reductions. The number of active home listings with price reductions is sitting at 29.5%. This is down from May 24th when 33% of active home listings reduced their price at least once. Of the active condo listings, 20.9% reduced their price one or more times. That is up from the 18.2% of active condo listings that reduced their price on May 24th.

A Couple of Thoughts on The Numbers

One number that stood out is the decrease in the number of price reductions among the active home listings . Prior to calculating the numbers, I expected to see an increase in price reductions for active home listings. Anecdotally, it seems like there are more price decreases. So why the lower number? Without doing a deep dig into the recent pending sales, I suspect that price reductions are proving to be effective. People overshooting the market initially are able to find the market via price adjustments.

Overall, the numbers above point to a market that while cooler than this winter, still remains resilient. The shifts in the market are gradual and not drastic. Inventory numbers well below normal combine with existing levels of demand to create conditions that are still more competitive than a “normal” Maui market.

While the numbers show some of the variability in the market between homes and condos, they don’t show the variability by geography and price point. On May 31st, I went through the end of the month inventory for homes and condos and broke it down by geography and price point. The purpose of the exercise wasn’t so much for this post but to create a baseline for future analysis trying to track potential shifts in inventory and demand at a district and price point level. That said, there is pretty clearly some variability evident. This post is getting a little long already so I will save my findings for the next edition of the Musings. The one immediate takeaway is that sellers will likely want to talk to their Realtor about conditions specific to their segment of the market when determining pricing and negotiation strategies.

The Obligatory Maui Photo Tweet to Brighten This Blog Post

A few of my favorite photos from Maui, Hawaii. Hope you have a wonderful day! pic.twitter.com/nYgiBBJMue

— Scott Smorra (@ScottSmorra) June 1, 2022

Contact The Maui Real Estate Team

Contact the Maui Real Estate Team if you have any questions about this post or if you need assistance buying or selling Maui Real Estate. We look forward to hearing from you and discussing your real estate needs.