Maui Real Estate Blog
Taking the Pulse of the West Maui Vacation Rental Condo Market
We recently posted on a surge in activity in the South Maui Vacation Rental Market. Wailea and Kihei both saw a big increase in condo sales for the year to date. West Maui is home to the other big concentration of vacation rental condos on island. The West side has not been the best side for sales this year. Condo activity is off compared to 2016. This post takes a look at sales activity in the different areas of West Maui, looks at a few condos that have seen stronger activity and takes a look at a couple of factors that could be driving the slower sales on this side of the island.
As of June 7th, there have been 145 vacation rental condos sold in West Maui this year. As of the same time last year, there were 176 vacation rental condos that sold in West Maui. That is an 18% reduction in sales volume. I broke down the sales by price ranges to try to see if the decrease in activity occurred across the board. Condo sales $500,000 and under were down 22%. There were 57 sales this year as compared to 73 last year in this price range. The middle part of the market between $500,001 and $1,000,000 performed the strongest of any market segment with a modest increase of 4.6% over last year. There were 67 sales compared to 64 over the same period of 2016. The high end of the West Maui vacation rental market saw the steepest decline in activity of any market segment. Sales were down 51% for vacation rental condos priced from $1,000,001 on up. There were 23 sales compared to 45 sales over the same period of 2016.
The Lahaina condo market was the one area of West Maui that saw an increase in activity compared to last year. Lahaina has a small number of vacation rental condo complexes with four total properties. Those four complexes saw activity increase by 35% for the year as of June 7, 2017. It was a good five plus months of sales in Lahaina, but one condo stood out above the others.
Aina Nalu is located one block off of Front Street in historic Lahaina Town. There are 190 units at the complex spread over 11 buildings on 18 acres. There are studio, one bedroom and two bedroom floor plans. Prices range from the $300,000s for one bedrooms to the low $400,000s for two bedrooms. Owners value the grounds, the two nice pools, the tropical design elements and the location. If you were so inclined, this is a place where you could stay without driving your car with Front Street so close by. The property had 5 sales through just over five months of 2016. As of June 7th, there were 12 sales in Aina Nalu. That is an impressive 240% increase in sales activity.
As you head North from Lahaina, the Ka’anapali condo market has seen a dip in condo sales activity for the first five months of the year compared to the same period of 2016. Sales slipped from 63 sales to start 2016 to 42 sales as of June 7, 2017. That is a 33% decrease in activity. The decrease in sales was almost across the board with only Ka’anapali Royal registering more sales this year than last year with 4 sales compared to 2. While I typically focus on the condos that stand out among the crowd for higher sales activity, I wanted to take a look at the condo complex that saw the biggest dip in activity.
Honua Kai is the last fee simple whole ownership condo to be built in the Ka’anapali Area. It has 711 units spread over two seven story towers on 40 acres. The Hoku Lani tower was completed in 2009 and the Konea tower was completed in 2010. Honua Kai has extensive amenities including three separate pools and an onsite restaurant, grocery store and spa. It has studio, one bedroom, two bedroom and three bedroom condominiums. Prices range from the high 600s for a select few mountain view one bedrooms up to over $5,000,000 for the best located three bedroom units. People who own at Honua Kai appreciate the significant amenities, the beachfront location, the newness of the location and the rental demand.
Honua Kai has had a big impact on the West Maui Condo market since 2005 when they started taking the first round of pre-construction reservations. Those reservations generated a significant number of sales during the doldrums of the post crash real estate market. This goosed the condo sales numbers when overall demand was low. I dubbed this distortion of the statistics The Honua Kai Effect.
June of 2016 was the last new developer sale at Honua Kai. There were 15 new developer sales between January 1, 2016 and June 7, 2016. That gives some context before I provide this year’s sales numbers. There were 14 Honua Kai Sales for the year as of June 7th. Last year, there were 32 over that same period of time. That is a 54% drop in sales volume. The new developer sales account for most, but not all of the difference between this year and last year’s sales volume.
Honua Kai remains a popular choice for West Maui condo buyers. While we saw a big dip in activity, it still saw more sales than any other West Maui condo.
Napili, Kahana, Honokowai
The three communities located between Ka’anapali and Kapalua offer the greatest concentration of oceanfront condos in West Maui. It was another area that has seen a decrease in activity in 2017. There were 57 sales in this area five months and a week in to 2017. That is down 22% from the 73 sales through the same period of 2016. The bulk of the condo complexes in this area saw a decrease in activity with a few exceptions.
Papakea is an oceanfront complex in the Honokowai area. It has 364 condos spread over 11 buildings on just over 12 acres. There are studio, one bedroom and two bedroom floor plans. This complex is predominantly fee simple, but there are some leasehold units. Papakea has a pretty broad range of prices. Leasehold one bedrooms start right around $200,000. The most expensive units are direct oceanfront two bedroom units. They sell for as much as $1,000,000. Owners like the oceanfront location, amenities and relaxed feel. Papakea had a pretty good start to 2016 with 10 sales in just over five months. This year was 40% better with 14 sales in the same period of time.
While most of West Maui was either markedly stronger or weaker this year compared to last year, Kapalua has been pretty steady with the same number of sales this year as last year. There were 14 vacation rental condos sold this year as of June 7th, compared to 14 over the same period last year. While the overall numbers were the same, there were some shifts in activity among the five complexes that allow vacation rentals. I wanted to highlight the one condo that saw the biggest increase in activity and the highest number of sales overall.
Kapalua Golf Villas
Kapalua Golf Villas is situated along the beautiful Kapalua Bay Course. There are 186 units spread over 16 buildings on 15.8 acres. Amenities include three pools. The property went through extensive renovations in 2014. Prices range from the high $500,000s for one bedrooms lower on the golf course to just under a million for fully upgraded two bedrooms with good ocean views. Views, finishing and floor plans are the primary drivers on price. Kapalua Golf Villas offer the lowest priced entry point into the Kapalua Real Estate market. Owners appreciate the location on the Bay course, the views and the proximity to Kapalua Beaches and to other resort amenities.
Kapalua Golf Villas has been the busiest of the Kapalua condos in 2017. There have been 7 units sold as June 7th. There were 4 sold over the same period last year. That is a 75% increase in sales activity.
What’s Driving the West Maui Market
South Maui vacation rental condos have been booming this year while West Maui has been slower. They are two seemingly similar markets. What is driving the difference in market behavior? I was able to give some pretty good reasons as to why I think the South Maui market has surged to start the year. Determining what might be holding things back in West Maui is a little more challenging. The one clear cut cause was already discussed. Honua Kai is seeing less activity now that it is just resales and there are no more new developer listings.
Are there any other factors keeping down West Maui sales numbers? The state of Kahana Bay may be impacting sales. This section of West Maui coastline has significant erosion issues. Hololani has been struggling with erosion issues for a number of years. Those issues expanded down the coast last year. Royal Kahana and Valley Isle Resort had to put up emergency sandbags during the winter of 2016 to halt a rapid loss of shoreline. There are now nine condo associations that are a part of efforts to develop a shoreline replenishment plan. With the cost of beach replenishment expected to approach ten million dollars, the individual owners in those nine complexes are facing a big assessment to pay for the project. While the numbers of condos sold in the nine complexes this year is pretty similar to what we saw last year, the uncertainty over this coastline and the potential future costs may be limiting the potential for growth in this market.
The one other factor that could be at play is plain old variability. We see that in the market from time to time. Some years West Maui has stronger years for sales activity and some years it is South Maui that has a big year. The underlying reasons aren’t so clear cut. This may be just one of those years for West Maui. When you add in the other factors previously mentioned, those three things in and of itself could account for the 18% drop we have seen. If you are a close follower of the West Maui market and you have any other theories, we would welcome your input in the comments below.
The good news for potential buyers is that there is still a lot of inventory in this market. This is particularly the case with condos priced from $500,000 and up. You can search through the current inventory of Kapalua Condos for Sale and Ka’anapali Condos for sale on MauiRealEstate.com. You can also search the MLS for condos listed in Lahaina, Napili, Kahana and Honokowai. Contact The Maui Real Estate Team if you want to talk to a real estate agent about West Maui Vacation Rental Condos. We would welcome the chance to learn more about what you are looking for and to assist you in your search for a condo that will fit your needs.
Maui Real Estate Blog
Ka’anapali 2011 Mid Year Real Estate Statistics
This is part of my ongoing look at how a handful of Maui community real estate markets performed at the halfway point for 2011. This post looks specifically at Ka’anapali Resort. Included are statistics on sales volumes, medians, bank owned sales and short sales. I also have included information on sales volume at individual Ka’anapali condo complexes. Without further ado, here are the stats followed by a few thoughts on the significance of these numbers.
There were 20 home sales reported in Ka’anapali during the first half of 2011. The median sales price for those transactions is $1,018,500. By comparison, there were 11 sales during the first six months of 2010 at a median sales price of $1,300,000. This translates to an 82% increase in sales volume and a 22% decrease in median prices.
- The highest sales price during the first half of 2011 was $3,305,000. During the same period of 2010, the high was $4,500,000.
- The low sales price for the first six months of 2011 was $700,000.
- Of the twenty sales reported, MLS records indicate that thirteen were all cash transactions.
- There were four REO sales and three short sales during the first half of 2011. There were only two short sales in 2010.
There were 32 condo sales reported within Ka’anapali Resort during the first 6 months of 2011. The median price for those sales was $562,000. The tally for the first half of 2010 was 31 sales at a median of $490,000. That translates to a rather modest increase in sales volume of 3% and an increase in median of 15%.
- The high sales price for a condo was $3,700,000 for a unit at Ka’anapali Ali’i. The high for the same period last year was $3,400,000. This was also for an Ali’i unit.
- The lowest sales price was $150,000 for a Bank Owned Leasehold unit at Kaanapali Royal.
- That Ka’anapali Royal Sale was one of four REOs that closed in Ka’anapali during the first half of 2011. There were also two short sales. By comparison, there were three REOs and one short during the same period in 2010.
- Leasehold sales increased in 2011 with six sales compared to two during the first half of 2010.
Ka’anapali’s land market was the most active of the resort land markets during the first half of 2011 with 13 sales at a median price of $525,000. That compares to 4 sales at a median of $487,500 for the first half of 2010. That is a 325% increase in volume and approximately an 8% increase in median.
- The high sale for the first half of the year was $800,000 for a lot in the Pinnacle.
- The low sale for the first half of the year was $275,000.
- Seven of the sales were REOs. All were in the Lanikeha subdivision in Ka’anapali.
There were a number of things that stood out with the Ka’anapali statistics. Overall, it was a solid first half of 2011 for the Ka’anapali Real Estate Market with all segments seeing increased activity. Home sales saw a healthy increase after a sluggish 2010. Part of the stems from a rise in buyer confidence and interest in the luxury market. Some of that increase also comes from some good opportunities. The first half of 2011 saw an uptick in bank owned listings and short sales at Ka’anapali Resort. As with other areas of the island, buyers have been seeking out values among shorts and REOs.
Looking at the land market, the big increase in sales volume and the big surge in foreclosures are both noteworthy. The focal point for land activity has been in the Lanikeha Development. This new development first came to market close to the peak. There were quite a few lots bought speculatively either for long term appreciation or for spec homes. Whether it was strategic default or financial challenges, a number of those speculative purchases ended up as foreclosures. The majority of the limited pool of buyers in the land market have placed value and opportunity at the top of their list of priorities when purchasing their properties. With prices half of peak market land prices, buyers have been attracted to the opportunities presented by the REO listings at Lanikeha.
On the condo side, it is worth noting that the stats provided above include only properties that are within the traditional confines of Kaanapali Resort. I decided to exclude a couple of properties like Honua Kai, Mahana and Ka’anapali Shores that are frequently lumped in with the Ka’anapali stats through the Realtors Association of Maui. I did this for two reasons. Honua Kai sales were going to really distort the stats due to what I have dubbed the Honua Kai Effect. There has been a significant volume of sales at this complex over the last couple of years. The vast majority of those sales were based on pre-construction contracts that were originally executed sometime between 2005-2007. If you include Honua Kai closes, there were far more sales in Ka’anapli during the first half of 2010 than there were in the first half of 2011. These long term contract Honua Kai closes do not provide a good indication of active buyers shopping during each particular year. Instead, these long term new developer contracts are closing when construction was completed and the buyers are able to take occupancy. I decided not to include Ka’anapali Shores and Mahana because they are categorized inconsistently. They are also listed as Honokowai properties by Realtors.
When you focus on just the core Ka’anapali condo sales figures, the first half of 2011 was almost a mirror of 2010. There were a few changes in the composition of sales. While there were no bank owned transactions in 2010, there were three bank owned sales in 2011. Leasehold sales were up two in the first half of 2010 to 6 in the first half of 2011. There were also some shifts in which complexes were most active. The greater impact of bank owned properties is significant, but I am reticent to put too much weight into other shifts in market activity. This is a pretty small sample size and we may just be seeing fluctuations in activity based on the quality of inventory or more random variables.
Contact The Maui Real Estate Team if you have questions about these statistics or if you need assistance buying or selling Ka’anapali Properties. You can also search the current inventory of Ka’anapali Homes for Sale and Ka’anapali Condos for Sale on MauiRealEstate.com.