Maui Real Estate Blog
Maui Market Musings Volume XIX
It’s been a few weeks since our last Maui Market Musings. With that in mind, this post delves into the numbers that help cast a light on current Maui market conditions. Since our last post, interests rates surged higher again putting additional pressure on affordability for some buyers. This post looks at what impacts if any higher rates are having on the Maui market. We also look at current inventory levels by price point and community. Other subjects for discussion include cancellations, price reductions and the recent market response to new listings. This is a longer read so you may want to grab your favorite caffeinated beverage before proceeding further. It is not advisable to operate heavy equipment after reading.
It’s hard not to lead with interest rates when discussing the state of the market. Rates continued their climb since our last update. While they fluctuate daily, they’ve been somewhere between 6.5% and just over 7% over the last few weeks. Needless, to say, we are a long way from the sub 3% interest rates we saw during periods of 2021. For those hoping that this increase is going to be short lived, the recent comments of Fed Chair Jerome Powell suggest that is unlikely to be the case. Powell said higher rates are needed to bring about a “correction” and balance to the housing market. While the Fed doesn’t directly control mortgage rates, they can exert a strong influence with changes to the Federal Funds rate.
Higher rates (even rates lower than current rates) were already impacting real estate markets around the country. Values are starting to retreat in many markets, particularly in some of the frothiest markets of the last couple of years.
So what kind of impact are we seeing on Maui from higher rates? There are a couple of numbers that we look at in this musings that might reflect the impact of higher rates. Pending sales is one with decreased affordability likely to impact the number of buyers. Price decreases is another metric that would or should reflect sellers adjusting to decreased buyer demand. Keep reading to see what those numbers look like recently on Maui.
Maui Home Inventory
|<$750,000||11||14||11||11||7 (-4)||14 (+3)|
|$750,000-$999,999||25||62||31||44||21 (-10)||46 (+2)|
|$1,000,000-$1,499,999||65||34||58||28||45 (-13)||33 (+5)|
|$1,500,000-$1,999,999||41||19||46||13||44 (-2)||17 (+4)|
|$5,000,000-$9,999,999||24||7||26||5||27 (+1)||6 (+1)|
|$20,000,000+||5||1||5||0||2 (-3)||1 (+1)|
|Totals||239||156||256||124||225 (-31)||140 (+16)|
|Hana||4||1||8||2||9 (+1)||1 (-1)|
|Kahului||13||21||11||25||7 (-4)||26 (+1)|
|Kula||19||16||24||10||22 (-2)||11 (+1)|
|Lahaina||18||14||23||7||21 (-2)||10 (+3)|
|Napili/Kahana/Hono…||10||6||14||4||9 (-5)||7 (+3)|
|Pukalani||7||6||8||5||6 (-2)||7 (+2)|
|Spreckelsville/Paia||10||2||15||3||10 (-5)||4 (+1)|
|Wailea/Makena||15||5||16||4||10 (-6)||8 (+4)|
|Wailuku||39||35||41||22||36 (-5)||26 (+4)|
End of September Home Inventory Review
The information above is provided with the usual framework. The home inventory data by price point includes all of the island of Maui, but excludes the islands of Molokai and Lanai. The district information is limited to the districts with the most activity.
- The inventory of active homes fell 12.2% between the last day of August and the last day of September.
- Active inventory decreased in all price ranges below $3,000,000. There was a modest increase in inventory between $3,000,000 and $10,000,000, no change between $10,000,000 and $19,999,999, and a decrease in inventory above $20,000,000.
- Pending sales activity increased 12.9% over last month! This is a surprising reverse of recent trends. It is an especially big surprise with the recent mortgage rate increases.
- The biggest increase in pending sales occurred below $2,000,000. Above that price range the number of pending sales was either steady or increased by one. No price ranges experienced a decrease in pending sales activity. It is worth noting that the $10,000,000 to $19,999,999 range had no pending sales as of the end of August and still has no pending sales.
- Looking at the different communities around the island, only two communities saw an increase in inventory. Haiku and Hana both saw modest increases in active listings. Anecdotally, it seems like some sellers in these windward communities try to get homes on to the market before the start of the rainy season later in the fall. I haven’t taken the plunge to determine if there is any quantitative evidence to support that claim.
- After seeing big growth in inventory in late Spring and early Summer, Kihei saw the biggest decrease in active inventory for the second month in a row. Notably, the total number of pending sales in Kihei did not change. With that in mind, I decided to look a little closer at the Kihei market activity. While Kihei added 8 new pending sales this month, 7 sales closed, 8 listings cancelled and 2 expired. Only 4 new listings came to market. Based on those numbers, the reason for the decrease in inventory is multi-faceted. The cancellations could be a sign of seller capitulation (more on that below) or just sellers taking a break. We shall see.
- Wailea and Wailuku are the two communities that saw the biggest increase in pending sales with 4 net new pendings. Wailea’s increase is a little more notable due to the percentage increase in pending sales. It’s worth mentioning that 4 of the 5 overall new pending sales in Wailea and Makena reduced prices before going under contract. There’s something to be said for listening to market feedback and adjusting price.
Maui Condo Inventory
|$250,000-$499,999||11||23||14||17||11 (-3)||16 (-1)|
|$500,000-$749,999||43||39||34||43||28 (-6)||40 (-3)|
|$1,000,000-$1,499,999||30||31||29||31||19 (-10)||36 (+5)|
|$1,500,000-$1,999,999||30||33||24||35||18 (-6)||34 (-1)|
|$2,000,000-$2,999,999||20||36||22||38||14 (-8)||43 (+5)|
|$3,000,000-$4,999,999||12||18||12||19||10 (-2)||17 (-2)|
|$5,000,000-$9,999,999||10||3||8||1||7 (-1)||0 (-1)|
|Totals||205||234||181||233||145 (-36)||222 (-11)|
|Ka’anapali||24||13||25||16||17 (-8)||14 (-3)|
|Kapalua||10||10||11||6||10 (-1)||4 (-2)|
|Kihei||67||60||50||63||48 (-2)||61 (-2)|
|Lahaina||16||8||9||10||5 (-4)||7 (-3)|
|Ma’alaea||5||6||3||6||4 (+1)||4 (-2)|
|Napili/Kahana/Hono||40||34||45||25||29 (-16)||30 (+5)|
|Wailuku||14||13||9||14||8 (-1)||12 (-2)|
End of September Condo Inventory Review
Again, the tables above come with the usual framework for our end of month inventory. The table by price point includes all condos on Maui, but it does not include condos on the islands of Molokai or Lanai. The table with districts is limited to the communities with the most activity. Pending sales at La’i Loa at Wailea Hills skew the data in Wailea and the $1,500,000-$5,000,000 price ranges. There are 75 pending sales in that development based on contracts penned in 2020 and the first quarter of 2021. Pending sales in La’i Loa won’t start to close until sometime in 2023. Paradise Ridge Estates in Kihei also skews the data albeit to a lesser extent. There are 18 pending sales with that development based on contracts penned between 2018 and the first quarter of 2022. Overall, 41.89% of current pending sales are long term new developer contracts.
- The number of active condo listings at the end of September is 19.89% lower than at the end of August.
- Active inventory decreased in seven out of ten price ranges in the table above. Net inventory was unchanged in the remaining 3 ranges.
- Pending condo sales dropped 5.2% compared to the end of August. Is this a reflection of reduced inventory, reduced demand or both? It’s hard to say. That said, I did get a surprising number of e-mails last month from fellow Realtors seeking out condo inventory for buyers struggling to find what they want.
- Pending sales dropped in seven of ten price ranges. Pending sales increased between $1,000,000-$1,499,999 and $2,000,000 and $2,999,999.
- Ma’alaea is the only community where inventory increased last month albeit with just one more active listing than at the end of August. Kahului’s inventory is unchanged.
- Napili, Kahana and Honokowai experienced the biggest decrease in inventory with 16 fewer listings at the end of this month. It was also the only community where pending sales increased. The eighteen new pending sales shows pretty healthy activity. It seems that the increase in pending sales is the biggest driver for the decrease in active listings in this market, but cancelled listings were also a factor. Seven sellers pulled their listings off the market.
September is a transitional month on Maui. The summer tourism season is over and we are still a few months from our peak winter season. Anecdotally, I always thought of this as a month where some sellers will opt to take a pause from selling their home only to relist when it gets closer to winter tourism season. With the sharp decrease in active listings this month, I wanted to look closer at cancelled and expired listings. Is September actually a bigger month for cancellations historically? If so, how does this year compare to previous years? Is there anything that can be gleaned from this September’s high cancellations?
|September||40 (1)||28 (2)||39 (t6)||50 (1)||41 (11)|
|September||29 (1)||13 (11)||43 (t2)||44 (3)||41 (11)|
Before discussing the numbers above, it is worth noting that there is some noise when it comes to cancelled listings. An agent changing brokerages or one brokerage buying another can inflate cancelled listings. The change in brokerages results in cancelled listings immediately replaced by new listings as old listing contracts are cancelled and new contracts created. I noticed some noise in this month’s cancelled home listings. Hoku’ula, a new development Upcountry, cancelled their MLS listings last month and put them back on the market as new listings at a higher price.
With that framework, let’s address the first question that I posed above. Is September a bigger month historically for cancellations? It appears to be one of the biggest months for canceled home listings albeit with some notable exceptions in the chart above. For condos, it is a little more extreme. Some years it is near the top and others near the bottom with no clear cut reason for the variability.
So what does that say about this year? Even without those five Hoku’ula cancellations, September would still be the highest month for home cancellation for the year to date. September is also leading for cancelled condo listings despite rather limited inventory. It’s hard to say definitively if this is strictly seasonal or if any of those cancellations are due to seller capitulation. That said, it would make sense if we start to see some sellers retreat from the market for non-seasonal reasons. Sellers who were fishing for ultra high prices, don’t need to sell or need to borrow at higher rates to buy a new place could all have reason to pull their listing under current conditions.
Recent increases in interest rates are generating more price reductions nationally. Sellers are reacting to the decreased affordability posed by higher rates. What about the Maui market? Are we seeing similar trends? I looked at price reductions for active inventory on September 29th.
As of the 29th, 95 out of 224 active listings or 42.41% of all properties reduced their price one or more times. As of September 2nd, that numbers was 42.97%. On August 15th, it was 39.67%. While price reductions are up since the early summer, the more recent decrease in price reductions is somewhat surprising in light of the recent increases in rates.
On the condo front, 36 out of 144 active listings reduced their price one or more times. That calculates to 25% of active inventory. That is down from 27.84% on September 2nd and 29.62% of all listings on August 15th.
With inventory shrinking, perhaps sellers are feeling emboldened to stick to their guns on pricing. The higher level of cash and or low inventory levels seem to be making this market less responsive to interest rate changes thus far.
How Quickly Are New Listings Going Under Contract?
Another metric we continue to watch in the musings is how quickly things are going under contract. Specifically, what percentage of listings are going under contract within 10 days or less. We started tracking this in mid-February when the number was right around 56%. That was pretty much the peak of our winter frenzy. For properties that were listed between September 12th and 19th, 34% of all listings went under contract within 10 days. That is actually up from 29.79% between August 10th and 17th.
For home listings, 32.14% of new listings between September 12th and September 19th went under contract within 10 days or less. By comparison, 38.1% of all homes listed between 9/12/21 and 9/19/21 went under contract in 10 days or less. For a pre-covid comparison, 41.18% of all homes listed between 9/12/19 and 9/19/19 went under contract within 10 days or less. It is worth mentioning that 41% is a much higher percentage than other weeks we’ve looked at in 2019. For example, only 19.04% of homes listed between 9/27/2019 and 10/3/2019 went under contract in 10 days or less.
For condo listings, 36.36% of all new listings went under contract within 10 days between September 12th and 19th. Last year, an eye popping 67.74% of condos listed between 9/12 and 9/19 were under contract in ten days or less. In 2019, 27.27% of all condos listed between 9/12 and 9/19 went under contract within 10 days or less.
Overall, the market is way less frenzied than last year. However, properties are going under contract faster than in a “normal” Maui market. There are definitely fewer buyers, but there are enough buyers out there for the limited supply that over one third of the inventory is going under contract quickly.
A Few Closing Thoughts on the State of the Maui Market
The numbers compiled above paint a picture of a more resilient Maui market than one might expect. We actually saw fewer price reductions for homes and condos while pending home sales increased! Not exactly the market response one would predict when interest rates increase to their highest point in 15 or more years. It appears at this point that limited inventory is still having a significant impact on the market despite the rising borrowing costs.
Will that sustain itself through the rest of the year and into early 2023? I was suprised by this month so who knows what the future will hold. It’s likely that the market has yet to feel the full weight of higher interest rates. Add in signs of a slowing economy and our market is facing additional headwinds. Ultimately, the Maui market moving forward will be a balancing act between the impact of higher rates and supply constraints. Conditions well vary around Maui by both price point, location and property type.
With interest rates likely to remain elevated into the immediate future, more real estate economists are anticipating price corrections. Reading beyond the headlines, economists expect variability in market corrections across the country. Rates will be a market driver, as will the state of the economy and local inventory. It’s important not to base market decisions on national headlines, but instead on relevant local data. We plan to continue with our Musings and community market updates so Maui buyers and sellers have the data to make informed decisions.
A Little Maui Beauty to Brighten Your Day
Contact The Maui Real Estate Team
Questions about the post above? Wondering about conditions in a specific part of the Maui Market? Need assistance buying or selling a property on Maui? Contact The Maui Real Estate Team for assistance. One of our experienced and savvy agents would welcome the chance to sit down with you to discuss your real estate needs.
Maui Real Estate Blog
908 Ho’omalolo Haiku
We just brought another great Haiku property to market. The two bedroom, two bathroom home is less than five years old and extremely well built. Situated on an acre of land, the home offers privacy in a lush, tropical setting.
Highlights of the home include the following:
- Teak flooring in the kitchen, living room and bedrooms.
- Nine foot ceilings throughout the house.
- An oversized walk in closet for the master bedroom.
- A well appointed kitchen with granite counters, custom cabinets and stainless steel appliances.
- A large covered lanai for outdoor living.
- Sliding glass doors out to the lanai from both bedrooms and the living room.
The floor plan for the home is extremely thoughtful. There is no wasted space in the 997 square feet of living space. The large lanai space helps the home to live larger than its interior square footage. The master suite is separated from the second bedroom and the kitchen via the living room.
The land is fully fenced and gated. The property is well landscaped with hibiscus, bamboo, Ti plants, hibiscus, ginger, areca palms and more. Edibles include banana, Hawaiian Chili Peppers, papaya and citrus. The various plantings on the property provide good privacy from neighbors. A gulch on one side of the lot creates additional privacy. This property is the one acre portion of a CPR property. It is the cottage portion of the agricultural property. The other half of the property, owned separately and not for sale, is 2.21 acres with a primary residence. Confused by the last few sentences? Contact us to discuss the ins and outs of condominium homes.
Maui Real Estate Blog
Haiku Waterfall Home
Haiku Waterfall Home
We are excited to bring a special property back to market. This Haiku property includes a well built and expansive home, a one bedroom cottage and 3.38 special acres with a stream and waterfall.
When talking about this property, it is hard not to start with the land itself. There is an impressive array of botanicals on the property. They include Arabica coffee plants too numerous to count, loads of banana, passion fruit and over 30 coconut trees. Bountiful hibiscus, torch ginger and Ti make the terraced land to feel like your own tropical garden. A series of small waterfalls cascade down the side of the hill below the home. The sound of the waterfall is sure to soothe.
The first word that comes to mind when describing the home is expansive. The vaulted open beam ceilings provide a tremendous sense of space and roominess. Plentiful and large windows allow you to take in the views of the ocean, pastureland and Haleakala. All of the rooms in the house are good sized. The great room is well suited to entertainment. The fireplace in the center of the room is a nice option to burn off the chill of a cool upper Haiku night. The master bedroom suite is massive. The second bedroom is quite large as well. There is an enclosed lanai with its own separate entrance. There is ample covered parking with adjacent substantial enclosed storage areas.
In addition to the main house there is a spacious 1 bed, 1 bath cottage complete with covered lanais. The cottage also boasts beautiful ocean and pasture views.
The property is located in the small Hibiscus Acres subdivision at the bottom of Awalau Road. The area is close to Makawao, Haiku Town and right around 20 minutes from Paia Town.
Find Out More About the Haiku Waterfall House
Maui Real Estate Blog
Haiku 2013 Midyear Real Estate Market Update
While we have taken a look at the overall Maui Midyear Maui Real Estate Statistics, I wanted to hone in on some of the individual communities across the island. We are going to start with the North Shore community of Haiku. Haiku encompasses a broad geographic area along the Northern slope of Haleakala Volcano. It ranges in elevation from a few dozen feet above sea level all the way to almost 1,400 feet above the Pacific. While known to receive more rainfall than most parts of the island, there are a pretty wide variety of micro climates. Some areas receive approximately 40 inches of rain a year and while other areas of true rainforest receive over 100 inches of rain a year. The area’s agricultural roots still have an impact on local real estate. Many of the properties are agriculturally zoned meaning they are on lots of two acres or greater. The community is popular with residents due to a variety of factors including the sense of community, natural beauty, tropical climate, bohemian vibe and access to wind and water sports. Those same reasons also attract some second home owners.
The first half of 2013 proved to be strong for Haiku Property Sales. There were both increases in the number of homes sold and land sold when compared to the first half of 2012. That being said, there are some interesting dynamics when you drill down into various price points of the Haiku Real Estate Market. In this update, I will provide specific numbers on median and sales volumes, point at a few additional numbers that I thought were noteworthy, give my take on the numbers and the state of the Haiku Real Estate market and give some additional thoughts on what we may expect to see in the second half of 2013.
During the first six months of 2013, there were 44 homes sold in Haiku with a median sales price of $588,975. During the first half of 2012, there were 33 homes sold with a median price of $620,000. That calculates to a 33% increase in sales activity this year with median prices dipping approximately 5%.
There were 14 land sales reported during the first half of 2013 in Haiku with a median sales price of $454,500. During the first six months of 2012, there were 12 land sales in Haiku with a median price of $393,750. That is approximately a 17% bump in activity and approximately a 15% bump in median price.
Here were a few other numbers that were noteworthy from the first six months of Haiku Real Estate Sales:
- The high sale for a home was $1,600,000 for a 4,259 square foot home on approximately two acres of land. This house is situated on the ocean side of Hana Highway.
- That was one of 7 sales over $1,000,000 in Haiku during the first six months of the year. That is a modest increase in sales activity over last year when there were 5 sales over $1,000,000.
- The lowest sales price for a home was $150,000 for a serious fixer upper out in the Huelo area of Haiku.
- The highest priced land sale for the first six months of the year was $1,000,000 for 2 acres on the ocean in Western Haiku.
- There were 6 bank owned or REO sales that closed in the first six months of 2013. There were 3 REO that closed in the first six months of 2012. This makes Haiku something of an anomaly as most areas of the island showed a sharp drop in foreclosure transactions. I would not take this as a harbinger of things to come in the second half of 2013.
- There were four short sales that closed in the first six months of 2013.
The Haiku market saw some clear signs of improvement during the first six months of 2013. The 33% increase in home sales was strong. While median price decreased, that is a reflection of the distribution of sales rather than a decrease in values. Homes priced below $1,000,000 generally saw pretty clear appreciation. The increase in land sales volume was not quite as robust, but I think some of that may stem from a lack of inventory that fit buyer demand. I will delve into my thoughts on that a little later in the blog post. While there was improvement in the market, it would be a stretch to say all elements of the Haiku market improved. The chart below shows the distribution of sales by price point.
The biggest bump in sales activity occurred at or near the median price points of the market. The lower price ranges saw a little bit of improvement. If there were more inventory at the low end of the Haiku market, I think it is safe to say it would have sold. The high end of the Haiku market is another story altogether. There was a modest increase in sales over $1,000,000 with seven sales reported vs. the five last year. That being said, there is lots of inventory that has yet to be absorbed on the high end.
This chart gives a sense of the abundance of high end inventory on the market in Haiku. Once you get above $1,000,000, there is lots of red representing active listings. There are a handful of blue bars representing sales in the first half of the year and there is just one green bar representing the lone pending sale. This should limit the potential for any appreciation in the near future at the high end of the market. The middle of the market has fairly limited inventory between $500,000-$1,000,000. Most price points are under six months of inventory. This has led to modest appreciation in values in these price ranges. When you get below $500,000, the pickings are particularly slim. There are properties under contract, but nothing active. When properties do come on the market, they tend to go very quickly if they are priced well. This is the segment of the market that has seen the most appreciation. I will provides some thoughts on the outlook for the rest of the year a little later in our video portion of the blog.
Shifting to the Haiku land market, the chart below shows a comparison of the distribution of sales by price point between the first half of 2012 and 2013.
This chart didn’t provide me with any great revelations. The pool of land for sale in Haiku is pretty heterogeneous. Value is driven by acreage, views, location, the presence or absence of infrastructure and utilities, micro-climates and exposure to the elements. Due to those factors, the shift in distribution of sales can be just as much a factor of the variability of properties sold as it is a shift in market dynamics. That being said, I can say I have seen anecdotal signs of a market shift. Land sales in Haiku started to pick up in the second half of 2012. Buyers were drawn to the land market as home inventory started to shrink. Two acre lots with infrastructure and ocean views have been in particular demand. As supplies shrink, we have seen some price increases. At this time last year, a two acre lot with water and ocean views started around the low to mid $300,000s. Most of these properties are now starting in the $400,000s.
While the chart with the comparison of 2012 and 2013 sales didn’t show much, the chart below offers a little more insight into the current market. This chart compares the active inventory, the properties that are pending and the properties that sold in the first six months of 2013.
There are two things that stand out in this chart. The first is the big number of pending sales in the $300,000-$400,000 range. Almost all of these are from the Peahi Hui subdivision. This is a new agricultural subdivision boasting views and all utilities. It never officially went on the MLS and sold out within a couple of weeks of being announced in the real estate community. The lots were priced at or below recent comparable sales and buyer demand was strong. The second thing that stands out in the chart is the abundance of active inventory above $1,000,000 with only one recent sale in that range and no pending properties. It is setting up as a tale of two markets with upward price pressure near the top of the market and downward price pressure on many of these higher end Haiku land listings.
Now that you have a little better sense of what happened in the first half of the year and how things look currently, I wanted to give a few thoughts on what we may see the rest of the year in the Haiku Real Estate market via this video commentary.
Just a quick note on the video above, there was one home listing below $500,000 that came back on the market after I completed filming. If you have any questions about Haiku property, don’t hesitate to contact the Maui Real Estate Team. We would welcome the opportunity to discuss the market and your real estate needs. You can also search the current inventory of Haiku Real Estate listings on MauiRealEstate.com.
Maui Real Estate Blog
Haiku Real Estate 2012 Year End Market Report
This is the second installment of our look at how the real estate market performed in individual communities around Maui during 2012. Today, we are taking a glance at the Haiku Real Estate Market. Haiku is a rural community on the North Shore of Maui. The area draws residents and visitors for its tropical beauty, access to great wind and water sports and country charm. Real estate in the area ranges from residences on small lots to sprawling country estates. Many of the homes in the community are on larger agricultural lots of two or more acres. During 2012, the Haiku market continued to improve over the doldrums of the down market. Sales volumes increased by a healthy margin for home and land transactions. Here are the statistics I pulled together on the market followed by a few thoughts on their meaning and the outlook for the market in 2013.
There were 72 homes sold in Haiku in 2012 with a median sales price of $635,000. In 2011, the sales figures were 58 sales at a median price of $637,000. That calculates to a 24% increases in activity and less than half of a percent drop in median price.
There were 29 land sales in Haiku during 2012 with a median sales price of $387,500. This is a significant boost over the 2011 numbers of 10 sales at a median price of $450,000. This calculates to 290% increase in sales activity and a 14% drop in median price.
Here are a few other numbers that I dug up while researching Haiku Sales volumes and medians.
- There were seven bank owned sales in Haiku in 2012. There were 11 bank owned sales in 2011. That is a 36% reduction in bank owned sales.
- There were seven successful short sales in Haiku for 2012. In 2011, there were three short sales. That is 233% increase in short sale activity. That percentage increase is more a reflection of the small sample than a dramatic shift in the market.
- The high sale in Haiku last year was $1,900,000 for a luxury home with cottage and pool on 2.12 acres.
- The luxury market as a whole was a little quieter in Haiku than last year. There were seven homes sold over $1,000,000 in 2012 verses 9 sold over $1,000,000 in 2011. Three of those 2011 sales were priced over $2,000,000. There were of course no $2,000,000 sales this year.
Overall, this was a year where the Haiku market began to get its legs back after feeling the influence of the real estate downturn for the previous four years. The land market made strides in particular. Land sales have been languishing since 2007 on island and this was part of a broader upswing in the Maui land market.
Residential homes also saw an upswing in activity over what we experienced the year before. The one thing that is interesting to note is that the upswing was not universal. The graph below compares the distribution of home sales by price in Haiku during 2011 and 2012
As shown above, some segments saw big gains while other parts of the market performed below 2011 levels. Some of that may just be a case of variability. We are dealing with small enough samples that there is some danger of over-interpreting some of these annual differences. That being said, the decrease in activity at the high end of the market follows trends that we saw across the island. While we saw many parts of the market increase in activity, luxury home sales were down island wide during 2012. The decrease in activity at the low end may well be a function of decreasing inventory. There are fewer bank owned properties coming on the market at these lower price ranges and there is not a big pool of conventional priced properties below $300,000 in Haiku. This is again a mirror of market trends around the island. With limited inventory and substantial demand for lower priced properties, we are also seeing some price increases in the low to middle end of the market.
When you look at the changes in medians for homes and land, it would appear that prices may have decreased. That being said, changes in medians aren’t always based on changes in property values. Part of the change stems from a shift in the distribution of sales in the market. As you can see in the chart below, the drop in median price for Haiku may well stem from an increase in sales of lower priced lots. It is not necessarily due to any decrease in value.
Changes in the value of homes can be tough to quantify in communities like Haiku. The homes and lots in the area are tremendously diverse in size, location, quality of construction, orientation to the elements and view. I would suggest that we are starting to see some price increases on properties at or below the median price for homes and land. However, it is hard to provide solid data as evidence or to apply a percentage increase in values due to the unique nature of many of the properties that have been sold.
What will 2013 bring for the Haiku Real Estate market? That is tough to say. Inventory levels will play a major role in future market performance. There is still strong interest from buyers looking for properties, but inventory levels are very low, particularly below the median price. The chart below highlights the issue at hand. It compares the the price range of the current listings on the market that are active and compares them to sales in the last year. Pending sales are not included in the chart.
The chart points out the tremendous scarcity of inventory in the lower price ranges. As evidenced by the sales, this is an area with higher buyer demand. Conversely, the higher priced luxury market has a fairly deep pool of inventory. Looking at the sales numbers for 2012, this is an area that has seen limited sales activity. For buyers shopping in parts of the market where inventory is scarce and demand is high, they should expect a lot of competition on well priced properties. Multiple offers and sales prices over asking won’t be uncommon. The conditions are in place for price increases in this segment of the market. Haiku luxury buyers may find that the depth of inventory could provide some opportunity for comparative values. Sellers should carefully evaluate where there home fits in this complex market. Well priced, well cared for homes near or below the median sales price will be well received in the market. While inventory is needed, overpriced properties will still languish in this market. Sellers may also find that appraisal is challenging with financed buyers if the contract price is too far above recently closed comparable transactions. Luxury sellers who want to sell quickly may will need to position themselves well against the rest of the inventory to stand out.
We hope this report helps you better understand the conditions in the Haiku Real Estate market. If you would like a free analysis of the value of your home or land, tell us a little more about your property and we’ll happily provide this service. We would welcome the opportunity to discuss how we may service your real estate needs. If you are looking to buy property in Haiku or anywhere else on Maui and require thoughtful, professional representation and service contact the Maui Real Estate Team today.You can see all of the current Haiku Real Estate listings on MauiRealEstate.com.