Maui Real Estate Blog
June 2021 Maui Real Estate Market Update
When the pandemic started, we provided weekly updates on market conditions on Maui. There were a lot of unknowns at that point and plenty free time to put together statistics. As market conditions improved from the doldrums of the spring and summer of 2020, carving out time became harder. By the middle of fall, weekly updates slipped to once every few weeks. I last posted a market update in mid-January. The frequency of the posts inversely correlates with market conditions. A quieter market meant more frequent posts, while the dearth of posts over the last 6 months is a testament to the busiest period of real estate transactions seen on Maui to date.
I had a little bit of time to catch my breath this week so I wanted to catch you up on market conditions through the first five months of 2021. While I am loathe to enter the world of prognostication after the surprising turn in market conditions last year, I will also provide a few thoughts on the outlook for the next few months.
The Covid-19 Pandemic created a real estate boom in a number of markets throughout the mainland United States as early as late Spring of 2020. Due to the travel restrictions to Hawaii, the Maui market remained comparatively quiet. We saw a modest uptick in activity in June after stay at home orders were lifted. As the year progressed, momentum increased. The resumption of tourism in October caused another uptick in demand. The Maui market hit a whole new gear in 2021.
Maui Realtors reported 598 homes sold during the first five months of the 2021. That calculates to roughly a 57% increase over the 389 homes sold during the same period of 2020. The difference in sales between 2021 and 2020 increased in part due to growing demand, but also due to the fact that Covid-19 impacted April and May 2020 sales volumes . The monthly difference in sales volume started at 18.8%in January and peaked at 290% in May. To be clear, the sales volumes for 2021 don’t look strong just due to weaker 2020 numbers. By comparison, home sales for the first five months of 2021 were 33.4% stronger than the same period of 2019.
Maui Realtors reported an impressive 1,019 condos sold over the first five months of 2021. That represents an 81% increase in sales volume over the 564 condos sold during the same period of 2020. As with the single family home market, the difference in sales between the two years is due in part to depressed sales in April and May of 2020, and a big surge in activity in 2021. This is evident in the monthly numbers. The January 2021 sales volume actually fell below January 2020 by 10%. Sales volume picked up dramatically in February of 2021 as evidenced by the 24.6% increase over February 2020. By May, the difference in monthly sales volume between 2021 and 2020 rocketed up to 448%. It is notable that the months of March through May were the first ever months where condo sales volumes exceeded 200 closed transactions on Maui.
While the number of properties going under contract soared, the number of new listings coming to market remained limited. The result was rapidly shrinking inventory for the first five months of the year.
According to the Realtors Association of Maui (RAM), there were only 203 active home listings at the very end of May. That is 37% below the 318 active home listings at the end of December. It is 54% lower than at the end of February 2020 right before covid impacted the market. The home inventory declined steadily throughout the pandemic.
As of the end of May, RAM reported 224 active condo listings. This is 68% below the number of active condo listings at the end of December. It is 58% below the number of condos for sale listed right before the start of Covid at the end of February of 2020. The decline in condo inventory hasn’t been quite as linear as the decrease in home inventory. Active condo inventory grew every month between March of 2020 and December of 2020. That makes the decrease in inventory in 2021 all that much more dramatic. It is also worth noting that the home and condo inventory weren’t exactly robust going into the start of Covid. Pre-Covid, there was less than 6 months of homes and condo inventory.
I would surmise that some of the recent decreases in sales volume may be due in part to the lack of inventory. Buyers are looking, but there just isn’t much out there to buy. Well priced properties are still seeing a frenzy of activity.
Strong demand and shrinking inventory resulted in a lot of upward price pressure over the first five months of 2021. This is evident as Maui’s median sales priced crossed the $1,000,000 barrier for the month of May.
If you are long time readers of this blog, you may know that I am somewhat wary of using median sales price as a means of tracking changes in property values. The change in median price is based in part on change in value and also in part due to the composition of sales. A higher number of high end sales in anyone month can help push median sales price upwards. There is no doubt that this is a factor in the current market. We are seeing a much higher number of high end properties closing in this market. That said, it is also clear that prices are increasing.
Determining an exact number for the change in values is difficult. The Maui market is pretty heterogeneous in terms of structure size, lot size, location, view and finishing. There is also some variability in how much values are increasing in different geographies and price points. Contact us to discuss changes in value specific to areas of the market of interest to you.
What to Expect Going Forward?
I gave up prognosticating on this market earlier in the pandemic. If you told me market conditions would be what they are now back in April of 2020, let’s just say I would be skeptical. With that in mind, there are some things that I will be watching for over the months ahead.
Inventory The number of active listings tumbled throughout the spring on Maui. The limited inventory means a continued seller’s market. That said, we are starting to see increasing inventory on mainland markets. According to Axios Research, the inventory of single family homes nationally is up 7% since April 30th. Will our market start to see the increase in inventory? We seemed to lag behind the mainland market in terms of market trends throughout Covid-19 due to our inaccessibility. Will that continue?
Overly Ambitious Sellers As mentioned above, we are currently seeing strong appreciation in the market. Over the last month, I have started to see some pretty ambitious list prices with prices well above recent comparable sales. Will buyers be willing to absorb these higher prices due to lack of inventory? If not, will sellers be willing to adjust their pricing downward. Thus far, I am seeing a little bit of both. Some sellers are adjusting quickly to negative market feedback. Others have the means to wait and see if the market will come to them.
Interest Rates Global supply change disruptions due to Covid are causing inflationary pressure. There is a lot of argument amongst people a lot smarter than me as to how long this will continue. Inflation can bring rising interest rates. Thus far, the Federal Reserve is not inclined to raise rates. They view the inflation as temporary. If inflation were to be more prolonged, pressure to react may increase.
Other Impacts on Buyer Demand Rising interest rates are just one factor that could impact buyer demand. It’s pretty clear that a significant portion of buyers over the last year came from off island. Maui became a Zoom Town so to speak. With rising levels of the population fully vaccinated, some businesses are calling their employees back to the office. What does that mean for demand going forward? Could that also impact supply if some of those called back to the office decide to sell their homes?
Covid also brought a surge of second home buying. There are some signs that this may be cooling in other markets around the country. Redfin released a report this week that showed mortgage applications for second homes are decreasing. They attributed this in part due to tightened rules for second home lending. They also attribute decreased demand due to rising home prices. Some second home buyers are feeling priced out after recent price increases.
These affordability issues already knocked a lot of local home buyers out of the market. Some are priced out. Others are struggling to compete with the cash or higher down payments from affluent buyers relocating from the Continental United States.
Contact The Maui Real Estate Team
While I am again tentative to offer any sort of forecast, I would surmise that we won’t see any seismic shifts in market conditions anytime soon. Any relief in supply is likely to be gradual while the recovering economy should sustain some demand. Buyers looking in this market are likely to find that well priced properties generate a lot of interest. Bidding wars are common at all price points. The competitions can be particularly fierce at and below the $1,000,000 mark. Sellers will find favorable market conditions. With such limited inventory, it is hard to be overlooked by the market. This means that sellers will get market feedback on their pricing pretty quickly. Contact The Maui Real Estate Team if you are considering buying or selling property on Maui. We would welcome the opportunity to provide a free consultation.
Maui Real Estate Blog
Maui Real Estate Market Update June 13th, 2020
The Maui Real Estate market saw its second consecutive week of strengthening buyer activity. Closings remain impacted by limited buyer activity from earlier in the pandemic. Buyers will find that there is more inventory starting to come to market. Find out more below as I delve into this week’s market activity in Maui County.
Maui Realtors reported 48 new escrows this week. That is a 4% percent increase over last week. It is just 2% below the number of properties that went under contract during the same seven day period of 2019.
I was somewhat surprised by the increase in activity last week in spite of the social upheaval happening around the country. I am even more surprised to see that demand actually increased for this seven day period. This doesn’t seem to be a unique phenomenon to Maui. Redfin’s Glenn Kelman reports the data for his national brokerage below.
1 of 10: Redfin just published our weekly report on housing demand, and once again it’s loaded with numbers & juicy insights from our agents. Demand is 25% above pre-pandemic levels. Buyers haven’t “batted an eyelash” over the possibility of a resurgent pandemic or now protests.— Glenn Kelman (@glennkelman) June 12, 2020
To be clear, the Maui market is not seeing demand exceeding pre-pandemic levels. That said, just like on the mainland, Maui buyers have not been deterred by the increase in Covid on the mainland or the nationwide protests.
Notable Numbers From This Week’s Pending Sales
- The 48 new pending sales include 23 homes, 23 condos and 2 lots.
- This is only the second time since the stay at home order went into effect that condo sales have been equal to home sales. For the pandemic, pending home sales are higher.
- Of the 23 pending condo sales, 9 are vacation rentals. Another two pending sales are higher priced resort area condos that prohibit vacation rentals.
- Pending land sales continue to bounce between 0-4 per week with this week coming in at 2.
This Week’s Sales
Maui Realtors reported 16 sales between June 3rd and June 9th. This is a dip of 55% from last week and down 68% from the same seven day period from the year prior. Keep in mind that sales are a lagging indicator of buyer demand. I thought our sales numbers were past the influence of the slower demand from just after the stay at home orders went into place. Apparently, that isn’t the case. When you look at the pending sales chart, we should see better sales numbers ahead. Most transactions are taking 30-60 days to close after they go under contract.
New Listings for The Week
Realtors listed 77 properties between June 3rd and 9th. That is the same number as last week and 6% below the same seven day period of 2019. Inventory is slowly growing as new listings outpace new pending sales. The overall inventory numbers remain pretty low with scarcity a big factor in some towns and neighborhoods around the island.
Contact the Maui Real Estate Team
Contact The Maui Real Estate Team if you have questions on the market or if you are interested in buying or selling property on island. Our experience and market knowledge is an asset to buyers and sellers in these dynamic market conditions.
Maui Real Estate Blog
Maui Market Update May 29, 2020
Somehow in this strange time space continuum that is the Covid-19 pandemic, another week passed. Once again, that means its time to take a look at the weekly real estate activity in Maui County. This week’s numbers are almost identical to the numbers from last week. Keep reading for more of the details.
Maui Realtors reported 32 pending sales in the seven day period between May 20th and May 26th. That is the same number of pending sales as last week. It is 49% of the 63 pendings from the same seven day period last year.
Having followed Maui real estate statistics pretty closely over the last seventeen years, I am reticent to read too much into a couple of weeks of data. That said, the chart above isn’t looking like a V shaped recovery. It is looking a little ragged if it is a check mark shaped recovery. It will be interesting to see the the numbers of the next couple of weeks to see if anything resembling a trend emerges.
Some Notable Numbers from This Week’s Pending Sales
- The 32 pending sales broke down into fifteen pending home sales, 14 pending condo sales and 4 pending lots.
- Pending home sales have outpaced pending condo sales for all but one week since the stay at home orders.
- This is three straight weeks where pending home sales are down from the week prior. I am reticent to read into this too much as of yet. That said, this will be something to monitor going forward.
- The vacation rental/second home condo market continues to outpace the non-vacation rental condo market. Eight of the thirteen pending sales are in complexes that allow vacation rentals.
- The land market continues to fluctuate. The four pending sales for the week is tied for the most since the start of stay at home orders. This comes after zero pending lot transactions the week prior.
This Week’s Closed Transactions
Only 16 transactions closed in the seven day period between May 20th and May 26th. That is one fewer transaction than last week. It is 20% of the 80 transactions that closed during the same seven day period of 2019. These two weeks reflect the really slow pending sales of late March and April. I would be surprised if we don’t start to see an increase in closings either next week or the week following.
A Quick Look at Inventory
Last week’s post looked at the number of new listings since the pandemic. I would like to put together charts showing weekly new inventory since the start of the pandemic, but I am limited by time constraints. I may try to address that on a future post. That said, new listings continue to lag behind last year’s numbers. There are 204 new land, condo and home listings for the month to date. Last year, there were 254 new listings over the same period. That is a 20% drop in new listings.
While the drop in listings is less than the drop in pending sales, it is worth noting that inventory levels were pretty constrained prior to the start of the pandemic. There is another point worth consideration. Quite a few sellers pulled their property from the market since the start of Covid-19. Since March 1, 2020, 364 sellers pulled their listings off the market. Over the same period of time last year, 249 sellers pulled listings off the market. That is a 46% increase. While inventory is growing, there is far from a glut of properties for sale.
The Big Picture
There were a couple of significant announcements related to the local economy over the last week. As of June 1, medium risk businesses will be opening on Maui. That includes restaurants with reduced capacity, fitness centers, and most county parks. As of yesterday, the governor indicated that the mandatory 14 day quarantine for inbound visitors will be extended through at least July 1.
The announcements over the last week points to a local economy that will be opening some, but the main economic engine of tourism will remain throttled for at least another month. I don’t think I am going out on too big of a limb by saying that a lack of tourism will continue to constrain the island’s second home market. While some second home buyers are comfortable with the current norm of sight unseen purchases, not all buyers share that sentiment.
The Maui Real Estate market continues to see activity albeit at reduced numbers. With still no tourism and a struggling local economy, it speaks to the desirability of a home on Maui. We live in a special place. There are local residents who still desire a home to call their own. There are off island residents who still want a place for when it is safe to fly back to Maui. Contact The Maui Real Estate Team if you are thinking of entering the Maui Real Estate market. We look forward to be of assistance.
Maui Real Estate Blog
Weekly Maui Real Estate Activity April 30th, 2020
Time for my weekly look at the week’s real estate activity on Maui. These are unprecedented times. Our goal is to provide buyers and sellers with the latest data to give them a sense of how Covid-19 is impacting our real estate market.
Maui Realtors reported a total of 33 new pending sales for the seven day period between April 22nd and April 28th. That number includes 21 new contracts on homes and 12 new contracts for condos. No land listings went under contract. The 33 pending is a 22% increase over last week. That said, it is 51% lower than the same seven day span last year.
Notes on This Week’s Pending Sales
- After sinking to truly anemic levels of activity earlier in the month, pending sales increased by a healthy amount over the last two weeks.
- Pending home sales continues to be stronger than pending condo sales. New pending home sales outpaced condo sales for four out of the five weeks since Maui went under stay at home orders.
- The composition of this week’s condo sales is different than last week. The week prior, 75% of the condos that went under contract were vacation rentals. This week it was 50% vacation rentals.
- The lower priced non-vacation condo market showed almost no activity this month prior to this week. This week, four condos fitting that description went under contract. I will be keeping an eye on that market segment going forward. These condos typically have a lot of buyers, sellers and renters who work in Maui’s tourism and service industries. These industries continue to be hard hit economically due to Covid-19.
- I am not reading too much into the goose egg for pending land sales this week. Land activity is typically slower on Maui and it tends to fluctuate more irregularly.
This Week’s Sales
Realtors reported 42 sales last week. The sales included 15 homes, 23 condos and 4 parcels of land. That is up 20% from last week, but down 22% from the same seven day span last year. It is worth noting that only two of the 42 sales are from contracts written after Maui’s stay at home order went into effect. The 42 sales also include six sales in Luana Gardens at Honua Kai. All of those contracts were written in 2018.
Based on the above, I would suspect we might see a further dip in weekly sales activity in the coming weeks. The sales numbers are down from what we were seeing the year prior. Pendings started to dip in that first and second week of March and that is reflected in the sales. That said, I suspect we will really see a couple of slow sales weeks when we are 45-60 days out from late March and early April when new pending sales were at their lowest.
Last week, the governor extended stay at home orders through the end of May. That said, restrictions are easing a little with some golf courses opening, selected parks opening and a few more businesses such as Car Dealerships opening. The time frame to reopen for tourism remains something of an unknown. It will be interesting to watch if the slight easing of restrictions does anything to bolster the real estate market. We will continue to provide weekly data on Maui Real Estate activity.
While clearly slower, people are still buying and selling real estate. Contact the Maui Real Estate Team if you are in the market for property on Maui. We welcome the chance to discuss your needs and market conditions in this unparalleled time.