Maui Real Estate Blog

Market Musings XXIII

This is the 23rd edition of our Maui Market musings. We started this series of posts just over a year ago. Our goal was to try to look at market statistics that provide a better indication of current market conditions. Sales figures can lag behind current market dynamics. We wanted to focus on supply and current demand in what was a more dynamic market. The market slowed quite a bit over the last year, but market conditions are far from straight forward. Keep reading below to learn more about January market activity, active and pending listings and information on sales price vs. list price.

January Market Activity

What type of market did we see in the past month? How many homes and condos came to market, how many went under contract and how many sold? Data from the previous 5 years provides some context.

New Inventory

January 23January 22January 21January 20January 19January 18
New Inventory during the month of January over the last six years

Looking at the chart above, new inventory is well below normal. Not just compared to the last couple of years but particularly compared to January in the three years prior to the start of the pandemic. New home inventory is almost 44% below last January and over 50% lower than any January between 2018 and 2020. Condo inventory wasn’t off quite as much. It is 42% lower than last year and anywhere between 30% and 47% lower than January of 2018, 2019 and 2020.

Constrained inventory may be a challenge for a while. The low interest rates of the last couple of years have have potential Sellers that might be looking to step up to a larger home or downsize staying put. Other potential sellers are reticent to list with limited replacement inventory available.

Pending Sales

January 23January 22January 21January 20January 19January 18
Monthly New Pending Sales in January Over the Last Six Years

January typically marks the first full month of our winter buying season. This period that runs from Christmas to mid-April coincides with peak visitor season. After a quiet fall, there was some question as to whether we might see a resumption of normal or at least something closer to normal buyer activity as we enter busy season. Thus far, that does not appear to be the case. Pending home sales are off 40% from last year and anywhere between 39% and 49% below January during 2018-2020. Pending condo sales are down 49% from last year and anywhere between 32% and 44% below 2018-2020.

Closed Transactions

January 23January 22January 21January 20January 19January 18
Monthly January Sales Over the Last Six Years

The sales numbers are a lagging indicator. For the most part, they tend to reflect contracts agreed upon in November and December. The data above reinforces what we noted in previous editions of our market musings. It was a slow fall, particularly for condo sales.

Home sales are 35% below last year and anywhere between 3% and 29% below January 2018-2020. On the condo front, this January’s sales are a whopping 65% below last year and between 57% and 58% below January 2018, 2019 and 2020.

End of Maui January Home Inventory

The charts below provide end of the month active and pending home inventory by price point and district around Maui.

<$750,00051461010 (+4)11 (+1)
$750,000-$999,9993125252821 (-4)25 (-3)
$1,000,000-$1,499,9996128782071 (-7)30 (+10)
$1,500,000-$1,999,9992817361133 (-3)9 (-2)
$2,000,000-$2,999,9993411371242 (+5)7 (-5)
$3,000,000-$4,999,99932731932 (+1)10 (+1)
$5,000,000-$9,999,99923927827 6 (-2)
$10,000,000-$19,999,99914014016 (+2)0
$20,000,000+51425 (+1)1 (-1)
Total233112258100257 (-1)99 (-1)
Maui active and pending home listings by price point on the last day of the month from November, December and January
Haiku291029726 (-3)7
Hana1001019 (-1)1
Ka’anapali929310 (+1)5 (+2)
Kahului1613161313 (-3)11 (-2)
Kapalua53537 (+2)1 (-2)
Kihei311539732 (-7)17 (+10)
Kula2212211021 11 (+1)
Lahaina1513181119 (+1)9 (-2)
Makawao11735431 (-4)6 (+2)
Napili/Kahana/Hono93133131 (-2)
Pukalani1037311 (+4)4 (+1)
Sprecks/Paia73918 (-1)1
Wailea16413616 (+3)3 (-3)
Wailuku3219252530 (+5)17 (-8)
A comparison of active and pending home listings by district for the last days of the month from November, December and January. It does not include all communities on Maui.

Three Things to Note About the End of January Home Inventory

  • Overall, there was remarkably little change in active and pending sales since the end of December. Island wide there was only one fewer pending listing and one fewer active listing. Have I mentioned that January is usually the start of busy season? This is not the type of month to month shift you would expect with more seasonal activity.
  • Drilling down by price point, a little more change is evident. The price ranges between $750,000-$1,500,000 tend to have the highest percentage of financed transactions. That range experienced higher inventory and decreased pendings through much of the fall due to higher rates. With rates lower through much of January, inventory is starting to decrease again. The $1,000,000-$1,500,000 price saw the biggest increase in pending sales of any price point.
  • Home buyer activity in the resorts remained quiet. Kapalua and Wailea both saw a decrease in pending sales and a small increase in active inventory. Ka’anapali inventory increased with a couple of additional pending sales reported.

End of January Maui Condo Inventory

The charts below provide end of the month active and pending condo inventory by price point and district. It is worth noting that the Wailea pending sales receive a boost from 75 new developer units reserved in La’i Loa at Wailea Hills. These properties went under contract between 2020 and the the first quarter of 2021. Priced from just under $1,500,000 all the way up to over $4,000,000, these long term contracts are also skewing the also pending sales upwards in this price range. Paradise Ridge Estates is another new development in Kihei with 18 pending sales based on contracts signed between 2018 and the first quarter of 2022.

<$250,00014221 (-1)2
$250,000-$499,9991914121614 (+2)11 (-5)
$500,000-$749,9994333382549 (+11)31 (+6)
$750,000-$999,9992829422739 (-3)42 (+15)
$1,000,000-$1,499,9993124322129 (-3)32 (+11)
$1,500,000-$1,999,9992128262930 (+4)35 (+6)
$2,000,000-$2,999,9991839183617 (-1)40 (+4)
$3,000,000-$4,999,9991117101811 (+1) 17 (-1)
$5,000,000-$9,999,99912214012 (-2)2 (+2)
Totals187190198174206 (+8)212 (+38)
A comparison of end of the month active and pending condo sales by price point from November 22, December 22 and January 23.
Ka’aanapali25422924 (+2)12 (+3)
Kahului55433 (-1)4 (+1)
Kapalua14212313 (+1)6 (+3)
Kihei5361614565 (+4)72 (+27)
Lahaina148111212 (+1)9 (-3)
Ma’alaea485557 (+2)
Napili/Kahana/Hono3919501650 14 (-2)
Wailea/Makena2385277926 (-1)81 (+2)
Wailuku88447 (+3)6 (+2)
Active and Pending Condo inventory by district in Maui at the end of November and December 22 and January 2023. This chart does not include all districts on island.

Three Things to Note About The End of January Condo Activity

  • The end of January condo numbers do show more of a seasonal shift with a 21.83% increase in pending sales over the end of December. It also appears as if more sellers are coming to market with active listings increasing despite the increased pending sales.
  • Drilling down by price point, the increase in pending sales is pretty broad based with only two price ranges showing fewer pending sales and two price points unchanged.
  • Looking at the districts, Kihei is by far and away the focal point of increased condo sales. Kihei pending sales increased 60% since the end December. Pending sales throughout the rest of the districts were mixed. Notably, Wailea and the other resorts were really quiet as was the Napili, Kahana and Honokowai district.

Interest Rates

One of the bigger takeaways from the home inventory was the increase in buyer activity and decrease in listings in the price ranges with more financed buyers. The decrease in interest rates at the end of last year and to start this year improved affordability bringing buyers back to the market. There were some who thought further decreases in rates could heat up the market again. Well, if you haven’t been tracking rates closely, they are back on the rise again.

Forecasting rates is a fool’s errand at this point. That said, the trajectory of rates will continue to impact the market. Needless to say, higher rates may cool some segments of the market while any substantive decrease in rates could boost demand.

Are Sellers Negotiating?

During the frenzied market of 2021 and the first half of 2022, negotiation became something of a forgotten term on Maui. Sellers were in the driver seat and a significant number of the sales closed for asking price or above. With less buyer activity than last year, how much are sellers willing to negotiate in the current market?

While we don’t have transparency on contract prices with recent pending sales, I looked at closed sales between January 1 and February 15th to get a sense of how much negotiation occurred.

A pie chart of Sales Price vs List Price for Maui Homes from January 1 through February 15th.
The Chart above breaks down sales price compared to asking price for Maui Homes between January 1st and February 15th, 2023.

Looking at the home chart, you can see that there still is some competition for homes with 31% of all sales coming in at full asking price and an additional 13% over asking price. That points to the continued impact of low inventory. While there are fewer buyers, the below normal inventory levels mean that there can be competition for quality listings. That said, 18% of buyers are paying anywhere between 5% and 10% below asking price. An additional 15% are paying more 10% below asking price with a handful of those more than 20% below.

A pie chart of sales price vs list price for Maui Condos from January 1 through February 15th.
This chart compares sales price vs. asking price for Maui Condos sold between January 1 and February 15th, 2023.

Looking at the condo chart, recent sales point to a more competitive market with 18% of recent sales closing for over asking price and 37% for full price. Only 16% of all listings sold for less than 95% of asking price with only 1% less than 90% of asking price. While buyer activity is down, inventory remains limited and some segments of the market are particularly scarce.

Overall, buyers have more latitude to make offers under current market conditions. That said, it really depends on price range and the districts where they are searching. It is also worth noting that a number of the sellers who are negotiating are those that priced above market. At this point, values feel pretty stable and sellers aren’t chasing the market.

A Few Last Thoughts

This musings is being published a little later than usual in the month. That afforded me the opportunity to incorporate sales data from the first 15 days of the month in the section above. While I didn’t delve into this February’s pending data yet, at a surface level the overall number of pending sales continues to increase. They should be rising as this is our peak buying season. The questions is how much are pending sales increasing compared to what is normal during this time of year? Anecdotally, it seems like the resorts are seeing a little more activity than they were in January. It will be interesting to see how the numbers stack up to previous years at the end of the month.

While things are understandably busier than the fall, market conditions remain weird. Decreased demand for this time of year is offset in part by lower inventory. That creates some pockets of the market that remain competitive. That said, there are also a fair number of sellers stuck in the market frenzy mindset. For the most part, those properties are quiet and accumulating days on market.

There are still quite a few sellers hitting surprisingly high prices. That’s part of the weird vibe that permeates the market.

A Little Maui Beauty to Brighten This Post

Contact The Maui Real Estate Team

Questions on this month’s numbers? Thinking about buying or selling property on Maui? Contact the Maui Real Estate Team. We welcome the chance to talk, listen and learn more about your real estate needs. Out experienced group of agents are here to help you guide through the current market’s peculiar conditions.

Are you looking for a new Maui home?
We want to help!

Pete Jalbert

Maui Real Estate Blog

Maui Market Musings Volume XVII

This is our seventeenth Maui Market Musings. This edition continues to focus on the metrics that give us the best indication of current market conditions. Those three metrics are inventory, price reductions and how quickly properties are going under contract. Discretion was the better part of valor and I am going to hold off on my Kapalua market update for either the next musings or a stand alone post. I imagine people have more to do over the holiday weekend than reading a 3,500 word manuscript on the Maui Real Estate Market. Without further ado…

End of Month Inventory of Maui Single Family Homes

<$750,00061611141111 (-3)
$750,000-$999,9993263256231 (+6)44 (-18)
$1,000,000-$1,499,9994337653458 (-7)28 (-6)
$1,500,000-$1,999,9994422411946 (+5)13 (-6)
$2,000,000-$2,999,9993415311936 (+5)12 (-7)
$3,000,000-$4.999,999271025932 (+7)11 (+2)
$5,000,000-$9,999,99923824726 (+2)5 (-2)
$10,000,000-$19,999,99913012011 (-1)0
Totals241169239156256 (+17)124 (-32)
Maui active and pending home listings by price point on the last day of the month from June, July and August 2022
Haiku2013221120 (-2)7 (-4)
Hana42418 (+4)2 (+1)
Ka’anapali117107104 (-3)
Kahului827132111 (-2)25 (+4)
Kapalua53514 (-1)1
Kihei4522481444 (-4)16 (+2)
Kula2513191624 (+4)10 (-6)
Lahaina2018181423 (+5)7 (-7)
Makawao131214915 (+1) 11 (+2)
Napili/Kahana/Hono…12310614 (+4)4 (-2)
Pukalani127768 (+1)5 (-1)
Spreckelsville/Paia11210215 (+5)3 (+1)
Wailea/Makena13415516 (+1)4 (-1)
Wailuku3933393541 (+2)22 (-13)
A comparison of active and pending home listings by community for the last days of the month from June-August 2022. It does not include all communities on Maui.

End of August 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 home listings on Maui actually increased approximately 7% since the last day of July. This comes on the heels of a decrease in active listings in July.
  • Active inventory decreased in only two price ranges.
  • Pending sales dipped again. Pending listings are 21% lower than the end of July and 27% below the end of June.
  • Pending sales increased in only the $3,000,000 to $4,999,999 price range.
  • Looking at the different price ranges, the $750,000-$999,999 price point stands out. Through the market boom of the last couple of years, you could make an argument that this was among the most competitive price points. Needless to say, this is a very different market now. The increase in interest rates reduced affordability for local buyers, and many investors seem to be sitting on the sidelines. As of today, 56% of the active listings in the range reduced their asking price at least once. Sellers are needing to adjust their price to the new realities of the market.
  • Looking at the different communities around the island, the month to month shifts in the trajectory of inventory are notable. A number of places where inventory increased between June and July, decreased between July and August and vice versa. I would suspect we might continue to see this pattern moving forward.
  • Kihei home inventory is notable for it’s month to month decrease after steady and significant growth in active listings over the previous months.
  • Resort market inventory saw limited changes in active inventory. Ka’anapali and Kapalua both have one fewer active listings while Wailea has one more.

End of August Maui Condo Inventory

<$250,000281816 (-2)
$250,000-$499,9991925112314 (+3)17 (-6)
$500,000-$749,9993140433934 (-9)43 (+4)
$750,000-$999,9994446444333 (-11)43
$1,000,000-$1,499,9992930303129 (-1)31
$1,500,000-$1,999,9992834303324 (-6)35 (+2)
$2,000,000-$2,999,9992036203622 (+2)38 (+2)
$3,000,000-$4,999,999112512181219 (+1)
$5,000,000-$9,999,9991131038 (-2)1 (-2)
Totals199247205234181 (-24)233 (-1)
A comparison of end of the month active and pending condo sales by price point from June through August of 2022.
Ka’anapali2315241325 (+1)16 (+3)
Kahului43283 (+1)7 (-1)
Kapalua129101011 (+1)6 (-4)
Kihei5574676050 (-17)63 (+3)
Lahaina1651689 (-7)10 (+2)
Ma’alaea55563 (-2)6
Napili/Kahana/Hono4834403445 (+5)25 (-9)
Wailea 2385258224 (-1)86 (+4)
Wailuku121214139 (-5)14 (+1)
Active and Pending Condo inventory by district in Maui during June-August of 2022. This does not include all districts.

End of August 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. Those should start closing in the not too distant future.

  • After steadily increasing over the last few months, active condo listings at the end of August dropped 12% from the end of July.
  • Pending condo sales were virtually unchanged with only one fewer pending sale at the end of August compared to the end of July.
  • Looking at the data by price range, active inventory only increased between $250,000-$499,000 and between $2,000,000 and $2,999,999. The biggest drops in active inventory occurred between $500,000 and $999,999 followed by $1,500,000 to $1,999,999.
  • Kihei continues to be one of the more dynamic communities when it comes to inventory. Much like Kihei Home inventory, Kihei Condo inventory dropped significantly since the end of July. That comes on the heels of seeing the largest increase over the months prior. Pendings increased as well. Without doing a really thorough comparison of the month to month inventory, it’s hard to say if this is variability or sellers adjusting their pricing and buyers responding.
  • The Napili, Kahana and Honokowai condo inventory took the opposite trajectory from Kihei with pending sales dipping substantially and active listings increasing on the month.
  • The change between the end of the month active inventory in the resort markets was nominal. Wailea’s active inventory increased by 1 and both Kapalua and Ka’anapali decreased by 1. Pendings increased in both Ka’anapali and Wailea while the Kapalua pending sales dipped.

One final thing worth noting about home and condo inventory, September 1 marks something of a seasonal shift on Maui. Labor day is the end of our summer tourist season. Traditionally, real estate activity on island slows a little in the early fall. This is a time when some sellers take a break from the market. Eleven home and condo listings either cancelled or expired on September 1 after the numbers for the charts above were compiled. We also tend to see a little less in the way of new inventory. One would think that would be the case this year, but there are fewer certainties in this day and age.

Checking in On Price Reductions

Nationally, there is some discussions of price reductions starting to level off after steady growth over the last few months? What about Maui? Looking at the inventory as of September 2nd, 42.97% of all active home listings reduced their price one or more times. On August 15th, 39.67% of active homes reduced their price. On July 4th, that number stood at 34.03%.

In the condo market, 27.84% of all active listings reduced their price. That is actually a decrease from 29.62% on August 15th. For further context, 24.63% of the active condo listings had a reduced asking price on July 4th.

It’s worth noting, that some parts of the market have more price reductions than other. There is a fair amount of variability in the market by district and price point. One example being homes in the $750,000-$999,999 price range which I mentioned earlier.

How Quickly Are Things Going Under Contract?

Another metric that gives a pretty good sense of current demand and market conditions is the rate at which properties go under contract. Specifically, we look at what percentage of properties go under contract in ten days or less. We started tracking this in February when market conditions were particularly frenzied. At the time, 56% of all properties went under contract within 10 days. Of the listings that came to market between August 10th and August 17th, 29.79% went under contract within 10 days. That’s actually up a little from the last period we tracked between July 25th and August 1st when 22.45% went under contract within 10 days or less of coming to market.

Looking specifically at homes, 30.43% of the new listings between August 10th and 17th went under contract in 10 days or less. For comparison’s sake, between August 10-17, 2021, 50% of new inventory went under contract in 10 days or less. For a pre-covid reference point, it was 15.15% of new home listings between August 10th – August 17th, 2019 . I do want to mention that this seems to be an anomalously low week. Other recent 2019 comparisons came in around 25%.

For condos, 29.17% of the new listings between August 10th and August 17th went under contract in ten days or less. During the same time span of 2021 and 2019 respectively, the numbers came in at 58.33% and 30.43%.

Overall, we are well below last year’s frenzy. While we may have fewer buyers and sellers, the overall absorption of new properties is similar to what we experienced before Covid.

Interest Rates

One other variable relevant to market conditions is interest rates. Recent movement in the bond market pushed interest rates on the 30 year fixed mortgage back up over 6%. This is the first time mortgages hit that rate since June. From recent discussions with mortgage brokers, many borrowers are opting for 10 year ARMs to lower monthly payments. That said, regardless of the mortgage product borrowing costs are significantly higher now than they were 12 or even 6 months ago. That is going to have a big impact on affordability.

Some Musings Eye Candy From Maui’s Sandy Shores

Contact The Maui Real Estate Team

Questions, comments or feedback? Contact The Maui Real Estate Team to discuss the latest market musings or if you need assistance buying or selling Maui Real Estate. Our experienced team of agents is well suited to assist buyers and sellers in the current dynamic market conditions. We look forward to hearing from you and discussing your real estate needs.

Pete Jalbert