Well, we made it to our twentieth Market Musings. This post took me a while to put together. I want to say it’s because it is chock full of tremendous insight. The truth is my last 9-10 days consisted primarily of battling Covid. My symptoms made writing this post a protracted slog. Give me some grace if there are typos and/or a few not so coherent thoughts interspersed throughout the text.

In our last post, I talked about the relative resilience of the Maui market under higher rates. Since that time, rates rose even more. The additional bump in rates or perhaps just a longer duration of time with higher rates is weighing on the Maui market. The single family home market in particular is feeling the burden of higher rates and decreased affordability. Musings 20 takes a look at some of the current market indicators including active and pending inventory, price reductions and how quickly new listings are going under contract.

End of October Maui Single Family Home Inventory

	8/31/22		9/31/22		10/31/22
	Active	Pending	Active	Pending	Active	Pending
<$750,000	11	11	7	14	9 (+1)	15 (+1)
$750,000-$999,999	31	44	21	46	29 (+8)	29 (-15)
$1,000,000-$1,499,999	58	28	45	33	64 (+19)	28 (-5)
$1,500,000-$1,999,999	46	13	44	17	41 (-3)	13 (-4)
$2,000,000-$2,999,999	36	12	33	12	35 (+2)	10 (-2)
$3,000,000-$4,999,999	32	11	35	11	32 (-3)	7 (-4)
$5,000,000-$9,999,999	26	5	27	6	26 (-1)	5 (-1)
$10,000,000-$19,999,999	11	0	11	0	9 (-2)	0
$20,000,000+	5	0	2	1	3 (+1)	1
Totals	256	124	225	140	248 (+23)	108 (-32)

	8/31/22		9/30/22		10/31/22
Haiku	20	7	24	7	28(+4)	9 (+2)
Hana	8	2	9	1	10 (+1)	0 (-1)
Ka’anapali	10	4	10	3	7 (-3)	2 (-1)
Kahului	11	25	7	26	16 (+9)	16 (-10)
Kapalua	4	1	4	0	6 (+2)	0
Kihei	44	16	35	16	40 (+5)	11 (-5)
Kula	24	10	22	11	20 (-2)	11
Lahaina	23	7	21	10	22 (+1)	13 (+3)
Makawao	15	11	13	11	13	9(-2)
Napili/Kahana/Hono…	14	4	9	7	11 (+2)	6 (-1)
Pukalani	8	5	6	7	8 (+2)	3 (-4)
Spreckelsville/Paia	15	3	10	4	8 (-2)	2 (-2)
Wailea/Makena	16	4	10	8	11 (+1)	4 (-4)
Wailuku	41	22	36	26	40 (+4)	21 (-5)

End of October 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 and community with the most activity.

• After a pretty healthy drop in Inventory in September, active home listings increased by 10.22% by the end of October.
• The bulk of the inventory increased occurred between $750,00 and $1,500,000 with an increase of 27 listings in that range.
• It appears that this increase in inventory stems more from slower activity than an influx of new listings. That is reflected in the pending sales data with 20 fewer pending home sales between $750,000 and $1,500,000.
• This make sense as this is an area of the market where a higher percentage of buyers are using financing. Looking at all of the sales between August 1 and October 30th, 18.93% of the buyers in this price range paid cash. In all other price ranges, 41.77% of buyers used cash. Plain and simple, the increase in mortgage rates is hitting this segment of the market harder.
• Overall, the number of pending home sales decreased 22.86% between the end of September and the end of October. That is a substantial decrease, but worth noting that pending sales typically decline in the fall.
• Looking at the market on a community level, all but three districts increased inventory. The exceptions being Kula, Spreckelsville/Paia and Ka’anapali. Ka’anapali’s decrease stemmed in part due to cancelled listings rather than increased sales.
• Kahului experienced the biggest increase in active listings and the biggest decrease in pending sales. With the vast majority of the inventory in this community priced between $750,000 and $1,300,000, this is a market where the increased rates appear to causing a bigger shift in conditions.

End of October Condo Inventory

	8/31/22		9/30/22		10/31/22
	Active	Pending	Active	Pending	Active	Pending
<$250,000	1	6	1	3	2 (+1)	4 (+1)
$250,000-$499,999	14	17	11	16	19 (+8)	12 (-4)
$500,000-$749,999	34	43	28	40	32 (+4)	35 (-5)
$750,000-$999,999	33	43	33	33	27 (-6)	27 (-6)
$1,000,000-$1,499,999	29	31	19	36	21 (+2)	30 (-6)
$1,500,000-$1,999,999	24	35	18	34	14 (-4)	33 (-1)
$2,000,000-$2,999,999	22	38	14	43	15 (+1)	40 (-3)
$3,000,000-$4,999,999	12	19	10	17	10	17
$5,000,000-$9,999,999	8	1	7	0	11 (+4)	1 (+1)
$10,000,000+	4	0	4	0	3 (-1)	1 (+1)
Total	181	233	145	222	154 (+9)	200 (-22)

	8/31/22		9/30/22		10/31/22
	Active	Pending	Active	Pending	Active	Pending
Ka’anapali	25	16	17	14	18 (+1)	9 (-5)
Kahului	3	7	3	4	5 (+2)	5 (+1)
Kapalua	11	6	10	4	12 (+2)	4
Kihei	50	63	48	61	43 (-5)	60 (-1)
Lahaina	9	10	5	7	8 (+3)	4 (-3)
Ma’alaea	3	6	4	4	3 (-1)	6 (+2)
Napili/Kahana/Hono…	45	25	29	30	33 (+4)	17 (-13)
Wailea	24	86	19	86	19	85 (-1)
Wailuku	9	14	8	12	11 (+3)	10 (-2)

End of October 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, 46.5% of the pending Condo inventory is in La’i Loa or Paradise Ridge Estates.

• After three straight months of decreased inventory, condo inventory increased by a modest 6.2%
• The largest increase in inventory occurred in the $250,000 to $499,999 price range. While this price range has a lower percentage of cash buyers than the overall condo market, the difference isn’t all that substantial.
• Active inventory increased in 6 out of 10 price ranges, decreased in three and stayed the same in one.
• Pending sales decreased 9.91% this month. As with home sales, it isn’t too uncommon to see pending sales decrease this time of year.
• The decrease in pending condo sales by price point was fairly consistent through most ranges, with the exceptions being the very lowest price range and the very highest price points in the market.
• At the community level, modest increases in inventory were common across the board. The two districts that actually saw a decrease in inventory at the community level were Ma’alaea and Kihei. Both are markets with a lot of vacation rentals. This is a market segment that is still seeing decent demand.
• Napili, Kahana and Honokowai experienced the biggest drop in pending sales. This is another big vacation rental condo market. Is the difference in activity levels a case of no clear narrative or just variability? This is something to watch with next month’s numbers.

How Quickly Are Properties Going Under Contract

One other metric we use on the blog to track market demand is how quickly properties are going under contract. Specifically, what percentage of new listings are going under contract in ten days or less. The very first time we started documenting this metric was back in February. At that point, 56% of all new listings went under contract within 10 days or less. Between September 12th and 19th, that number shrank to 34%. Between October 11th-18th, the number of properties that went under contract within 10 days or less fell further to 25.58%.

When you break it down by homes and condos, you can see that condos continue to show some measure of resilience. For condos listed between October 11th and 18th, 40% went under contract with buyers in ten days or less. That’s actually up from mid September when the number was 36.66%. For additional context, 66.67% of condos went under contract in 10 days or less between October 11th and 18th, 2021. Going back to 2019, 26% of all condos listed between October 11th and 18th went under contract in 10 days or less.

The numbers for the home market point to a more pronounced cooling. Only 13.04% of all homes listed between October 11th and 18th went under contract in 10 days or less. In mid-September, that number was 32.14%. For additional context, 54.17% of homes listed between October 11th and October 18th, 2021 went under contract in tend days or less. Going back to 2019, 9.09% of all homes listed between October 11th and October 18th, went under contract in ten days or less.

Price Reductions

One market indicator that surprised this month is the number of active listings with price reductions. Nationally, price reductions continue to rise as the real estate market slows under the weight of higher interest rates. Based on the numbers above, one might expect to see more price reductions, particularly with the home market. With fewer properties going under contract quickly and fewer properties going under contract in general, shouldn’t sellers be adjusting to the market?

As of the the 31st, 90 of 248 active home listings or 39.92% reduced their price one or more times. On September 29th, 42.41% of homes went under contract in 10 days or less. On September 2nd, 42.97% of all active listings had one or more price reduction.

On the condo front, 45 of 153 or 29.41% of active condo listings on October 31, 2022 reduced their price one or more times. That’s up from 25% on September 29th. On September 2nd, 27.84% of all active condo listings had price reductions.

Some General Thoughts on the Numbers Above and The State of The Market

It’s been an interesting last six months in the Maui Real Estate market. The first quarter of the year was largely a continuation of 2021. Strong demand combined with limited inventory to fuel strong price growth. Demand slowly started to taper in the second quarter. That said, inventory remained low. While the frenzy of the first quarter subsided, there was a balance between limited supply and just enough demand to make for a competitive market for buyers. While we were well below the frenzy of earlier in the year, homes and condos in particular sold faster and at a higher percentage of asking price than they would in a normal market.

This trend of a balanced ratio between buyers and sellers continued through the summer. Inventory actually contracted through most of the summer, but we lost FOMO (fear of missing out) buyers from the market. The lack of FOMO buyers had an impact. We started to see some downward pressure on values in limited parts of the market. With a discerning buyer pool, flawed properties that would have sold easily in the first quarter weren’t getting any love from buyers.

In my last musings, I showed stats that pointed to the relative resilience of this market despite rates well over 6%. The stats above point to a further shift downward in the market . Or at least two out of three did. The third is a reflection of Maui as a real estate market as a whole.

The increase in inventory and the decrease in pendings show a market where the balance in supply and demand is starting to shift. This is less due to an influx of new inventory as much as it is to decreased demand. When you look at the number of homes going under contract within 10 days or less, you can see where the push above 7% rates is starting to decrease the number of buyers. I am sure the more negative national real estate news is also having an impact on the buying decisions of some. Fomo has been replaced by wait and see.

The decrease in price reductions is the one anomaly in this market. As the market cools, you would expect sellers to adjust. Prior to Covid, Maui’s market dynamics were different than the typical mainland market. Sellers took time to adjust prices and days on market could really pile up before a listing was considered stale. It’s also worth remembering that this shift is pretty recent. We may need to see these conditions persist for a longer before more sellers begin to adjust prices.

The one other thing to note is that while we saw a shift in market conditions in these most recent stats, conditions remain variable. That’s pretty clear when we look at the difference between homes and condos. As of mid-October, new condo listings still went under contract much faster than they did pre-Covid. Condo inventory remains tight compared to demand and the volume of cash buyers blunts the impact of higher rates.There is variability in the home market too. The luxury market, which again includes a higher percentage of cash buyers, appears to be moving relatively well.

Looking forward, it will be interesting to see where the market goes from here. Since it’s taken me longer to write this blog post, I have the advantage of watching market conditions over the first ten days of November. While I haven’t crunched the numbers in any detail, pending sales stabilized to start the month. Yesterday’s inflation print out caused a shift in the bond market and mortgage rates to drop a half a point.Will that persist or will higher rates return? Needless to say, it’s too early tell. If anything, this points to continued weird market dynamics with a lot of variability in conditions.

A Little Maui Beauty to Brighten Your Day

It may not be Monday but…

It's Monday- we're mentally here. Via @HIOceanProject pic.twitter.com/gzQN8hpHwr

— Maui Hawaii (@Maui) November 7, 2022

Contact The Maui Real Estate Team

Variable market conditions and general market weirdness demand quality representation. Contact the Maui Real Estate Team to talk to one of our experienced agents if you are thinking of buying or selling Maui Real Estate. One of our healthy agents will be happy to learn more about your real estate needs. We look forward to being of assistance.

Post Updated September 29, 2022

It’s time for an excursion to West Maui as we continue our series of posts on market conditions in different communities around the island. The focus of today’s post is Ka’anapali. This resort community experienced a boom in activity during 2021 with rising prices and a high volume of sales. How has the market been in 2022? Find out more below as we look at year to date numbers for 2022 with numbers from 2021 and 2019 provided for comparison. There are also a few thoughts on the outlook for the rest of the year and early 2023.

Ka’anapali Home Market Numbers

• Maui Realtors reported 20 homes sold for the year to date as of September 23. That is 59.2% less than the 49 sales reported over the same period of 2021. It is 11.11% higher than the 18 reported in 2019.
• The median price of homes sold in 2022 is $2,650,000. That is 11% higher than $2,387,000, last year’s median over the same period. It is 77.91% higher than $1,489,500, the median during the same period of 2019.
• The average price of the homes sold in Ka’anapali during 2022 is $2,855,552. That compares to an average of $3,017,891 and $1,994,037 during the same periods of 2021 and 2019 respectively. This year’s average is 5.38% lower than last year and 43.2% higher than 2019.
• 20% of this year’s buyers paid over asking price for their home and 45% paid asking price or above. In 2021, 12.24% of buyers paid over asking price and 28.57% paid asking price or above. In 2019, no buyers paid over asking price and 11.11% paid full price.
• Realtors reported 30% of sales were cash transactions.
• The highest priced transaction this year closed for $5,295,000. The property in the Lanikeha subdivision included a 3 bedroom, 3.5 bathroom home with 3,086 square feet of living space and a 1 bedroom, 1 bathroom, 508 square foot cottage on a .485 acre lot.
• The lowest priced sale for the year to date closed for $1,681,050. The bank owned property in Ka’anapali Hillside actually sold via online auction for 46.17% over asking price. The home needed serious repair and renovation.
• The Ka’anapali Hillside subdivision had the most sales activity with 6 closes. Lanikeha and the Summit were the next busiest with 5 transactions each.

Thoughts on the Home Numbers and the Outlook for the Rest of the Year and Early 2023

After a rip roaring 2021 for sales, transaction activity decreased sharply this year in Ka’anapali coming in just above the pre-pandemic levels of activity during 2019. That said, decreased volume is just one part of the story. There was enough demand that 45% of all home sales closed for asking price or above. That’s even more than last year. When compared to 2019 numbers, that 45% is particularly striking. Back before the boom of the last couple years, above asking price offers were exceptionally rare and just over 10% of the buyers paid full price.

Some of the decreased sales volume can be attributed to a scarcity of listings at lower price points and within a couple of higher priced Ka’anapali neighborhoods. There were no transactions or even inventory in the Pinnacle this year, and just two listing and no transactions in Ka’anapali Coffee Farms. At this time, there is no active inventory for less than $3,000,000, with the only 2 listings below that price under contract.

Inventory isn’t as big of an issue as you move up in price range in Ka’anapali. Fifty percent of all the active inventory is priced between $5,000,000 and $7,000,000. Thus far one home sold in that price range with one additional home listed above $5,000,000 under contract.

It is worth comparing the homes that sold for between $5,000,000 and $7,000,000 last year with the current inventory in this price range. Last year’s sales included two large homes on acreage in Ka’anapali Coffee Farms and a 6,575 square foot home in the Pinnacle. While size isn’t everything when it comes to value, this year’s $5,000,000 and up listings tend to be smaller homes on smaller lots than last year’s sales. The active inventory includes four homes in Lanikeha with the largest home coming in at 4,557 square feet and a home in Kaanapali Coffee Farms substantially smaller than both of last year’s highest priced sales in that neighborhood.

It is also worth noting that all of the active listings in this range appear to be spec builds. There are two more spec builds in Lanikeha priced between $4,000,000 and $5,000,000. This volume of spec building is almost unheard of in the Maui Luxury home market. It will be interesting to watch the sellers of these spec builds through the rest of the year, especially if we see additional shifts in the market and or the economy. I surmise that it may take some pencil sharpening for some of those properties to go under contract.

As for overall Ka’anapali luxury home market activity in late 22 early 23, inventory constraints at lower price points will impact sales volume. Any additional sales beyond the current pendings will mostly come via new inventory or price adjustments. Rising borrower costs may also curtail activity. While there is a fair amount of cash in the market, rate increases will impact affordability for some buyers. Negative economic news and declines in the equity markets could also cause some buyers to put second home purchases on hold.

Ka’anapali Condo Market Numbers

• As of September 23rd, Maui Realtors reported 123 condos sold in Ka’anapali for the year to date. That is 37% fewer than the 194 that closed over the same period of 2021. It is 14.95% more than the 107 that sold during the same period of 2019.
• The Median price of the condos sold for the year to date is $1,450,000. This is 52.63% higher than the median of $950,000 from last year over this same span. It is 63.66% higher than the median for the same period of 2019.
• The average price of the condos sold for the year to date is $1,724,465. That is a 31.67% increase over last year’s average through September 23rd. It is 54.15% above the 2019 average during the same time span.
• 23.58% of all of the condos sold thus far this year sold for over asking price, and 47.15% sold for asking price or above. That’s well above last year’s numbers of 8.76% over asking and 44.33% for asking price or above. Just to give some context as to what is was like pre-Covid, in 2019 only 2.8% of sales sold for over asking and 16.82% sold for asking price or above.
• Maui Realtors reported that 51.21% of all sales were cash transactions. That’s up a little over the 50% reported last year. Cash purchases were actually higher at 59.81% in 2019.
• The lowest priced condo to sell in Ka’anapali is a leasehold studio unit in Ka’anapali Shores that closed for $325,000.
• The highest priced condo to sell closed for $5,899,000. The 3 bedroom, 3 bath unit in the Konea Tower at Honua Kai has 2,280 square feet of living space.
• Honua Kai is the busiest condo development thus far this year with 37 closed transactions. Ka’anapali Shoes is second busiest with 20 sales for the year to date. The Masters had the third most inventory with 15 sales.

Ka’anapali Year to Date Review and Late 2022 Early 2023 Market Outlook

While the Ka’anapali Condo market for the year to date did not see a repeat a the astounding sales volume of 2021, it remained a busy market well above the levels seen in 2019. If anything, constrained inventory and continued demand made for a more competitive market than last year with more properties closing for over asking price. The market conditions meant continued upward pressure on prices.

As it stands, the vacation rental and second home condo market continues to be resilient as some other types of property on island start to feel a market shift. As of the 26th of September, there are only 17 active condo listings on the market in all of Ka’anapali. Limited inventory improves the position of sellers and continues to exert at least some upward pressure on pricing. It will be interesting to see how the limited supply balances out against demand. Again, the cash in this market makes it a little less interest rate sensitive, but there is still some impact. As of right now, a 30 year fixed on a vacation rental condo is being quoted as high as 8.5%. Needless to say, a lot of borrowers are opting for ARM products. Even those are a lot more expensive.

The chart above shows pending condo sales by month in Ka’anapali over the last five years. A few things worth noting when looking at the chart. The first things is that 2021 and 2020 are anomalies with 2019 and 2018 more normal markets. If you are wondering about the April 2018 spike in pending sales, the market got a boost from a new development, Honua Kai Luana Gardens Villas. It’s also worth noting that while 2022 pending sales started stronger than 2019 and 2018, monthly pendings for 2022 are running behind both 2019 and 2018 since May. The last thing is that while there is a little more activity in the first half of most years, the second half of the year sees steady activity. I would suspect that we will see “below normal” market activity through the rest of the year.

Based on inventory and seasonality, I would anticipate relatively limited sales volume to close out the year. With the amount of inventory available, the economy in flux and borrowing costs the highest since 2002, it looks like a quieter start to 2023 could be in order. We shall see what happens going forward.

Contact The Maui Real Estate Team

Contact The Maui Real Estate Team if you have questions about this post or if you need assistance buying or selling property in the Ka’anapali area. You can find all of the current active Ka’anapali Homes for Sale, Ka’anapali Condos for Sale and Ka’anapali Land for Sale on MauiRealEstate.com.

It’s the beginning of a new month and the end of the first half of the year. Milestones like that typically call for a look back at first half of the year stats. That said, the market in the first quarter of the year is a lot different than the market now. While we intend to look at the June sales numbers in the next musings, the focus of this edition is on statistics that are more relevant to current conditions. The three main statistics reviewed in Volume XIII include inventory, price reductions and the number of properties going under contract within ten days of coming to market.

Inventory Watch for Single Family Homes

At the end of May, we started documenting end of month inventory for different communities and price points. We did it again on the last day of June. The intent is to track inventory at a more granular level than the island wide inventory statistics released by the local Realtor’s Association.

	May 31, 2022		June 30, 2022
	Active	Pending	Active	Pending
<$750,000	6	22	6	16 (-6)
$750,000-$999,999	19	54	32 (+13)	63 (+9)
$1,000,000-$1,499,999	43	37	58 (+15)	34 (-3)
$1,500,000-$1,999,999	30	27	44 (+14)	22 (-5)
$2,000,000-$2,999,999	37	14	34 (-3)	15 (+1)
$3,000,000-$4.999,999	24	11	27 (+3)	10 (-1)
$5,000,000-$9,999,999	22	8	23 (+1)	8
$10,000,000-$19,999,999	9	2	13 (+4)	0 (-2)
$20,000,000+	3	1	4 (+1)	1
Totals	193	176	241 (+48)	169 (-7)

	May 31, 2022		June 30, 2022
	Active	Pending	Active	Pending
Haiku	15	12	20 (+5)	13 (+1)
Hana	5	3	4 (-1)	2 (-1)
Ka’anapali	13	6	11 (-2)	7 (+1)
Kahului	11	24	8 (-3)	27 (+3)
Kapalua	4	2	5 (+1)	3 (+1)
Kihei	27	25	45 (+18)	22 (-3)
Kula	24	12	25 (+1)	13 (+1)
Lahaina	15	15	20 (+5)	18(+3)
Makawao	11	17	13 (+2)	12 (-5)
Napili/Kahana/Hono…	12	5	12	3 (-2)
Pukalani	5	12	12 (+7)	7 (-5)
Spreckelsville /Paia	12	4	11 (-1)	2 (-2)
Wailea/Makena	8	5	13 (+5)	4 (-1)
Wailuku	28	32	39 (+11)	33 (+1)

End of June Home Inventory Overview

Here are a couple of quick notes about the data above to provide some framework. The price ranges cover all of Maui. They do not include the islands of Lanai or Molokai. The list of districts above is limited to those with the most activity.

• The overall trends on inventory are pretty clear with just under a 25% increase in active listings and a 4% drop in pending sales over the last month. A substantial spike in interest rates provided the backdrop for this shift in active and pending sales.
• Honing in on various price points, you can see a little more variability in the market.
• Active inventory below $750,000 remained unchanged while pending sales decreased.
• When you bump up to the $750,000-$999,999 range, inventory increases are substantial, but it is also the price range with the largest increase in pending sales activity.
• The $1,000,000-$2,000,000 range saw a significant increase in active listings with a drop in pending sales activity.
• The luxury home market experienced more modest increases in inventory and the decline in pending sales is less significant.
• The variability in numbers at a district level is a little more of a head scratcher.
• Kihei inventory grew the most with a 66% increase in active homes for sale.
• Neighboring communities saw different trajectories in inventory. Kahului’s inventory fell while the number of active homes in Wailuku grew almost 40%.
• Within the luxury markets, Wailea and Makena experienced a pretty healthy bump in inventory. Kapalua has one more active home listing while active inventory in Ka’anapali is down.

Inventory Watch for Condos

	May 31, 2022		June 30, 2022
	Active	Pending	Active	Pending
<$250,000	5	9	2 (-3)	8 (-1)
$250,000-$499,999	12	23	19 (+7)	25 (+2)
$500,000-$749,999	18	55	31 (+13)	40 (-15)
$750,000-$999,999	29	54	44 (+15)	46 (-8)
$1,000,000-$1,499,999	23	49	29 (+6)	30 (-19)
$1,500,000-$1,999,999	21	34	28 (+7)	34
$2,000,000-$2,999,999	19	40	20 (+1)	36 (-4)
$3,000,000-$4,999,999	12	22	11 (+1)	25 (+3)
$5,000,000-$9,999,999	7	7	11 (+4)	3 (-1)
$10,000,000+	3	0	4 (+1)	0
Totals	149	293	199 (+50)	247 (-46)

	May 31, 2022		June 30, 2022
	Active	Pending	Active	Pending
Ka’anapali	23	23	23	15 (-8)
Kahului	5	8	4 (+1)	3 (-5)
Kapalua	7	15	12 (+5)	9 (-6)
Kihei	35	95	55 (+20)	74 (-21)
Lahaina	14	8	16 (+2)	5 (-3)
Maalaea	3	5	5 (+2)	5
Napili/Kahana/Hono…	34	39	48 (+14)	34 (-5)
Wailea	16	91	23 (+7)	85 (-6)
Wailuku	9	11	12 (+3)	12 (+1)

End of June Maui Condo Inventory Overview

As with the home market, the price points table includes all condos on Maui, but it does not include condos on Molokai or Lanai. The table with districts is limited to the districts with the most activity. As mentioned in the last Musings, 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. Those pending sales won’t start to close until sometime in 2023.

• The increase in condo inventory between May and June is more pronounced with a 33% jump in active condo listings. Pending condo sales dropped 16%.
• Honing in on the different price points, all price ranges with the exception of condos priced below $250,000 experienced an increase in active inventory.
• The biggest increase occurred in the $500,000 to $749,999 price range.
• On the pending sales front, all but three price ranges had a decrease. The $250,000 to $499,999 price range saw a modest increase. The number of pending condos sales stayed the same from $1,500,000 to $1,999,999. The $10,000,000 plus condo market remained unchanged with no pending listings.
• Looking at inventory from a district level, active inventory increased in all communities except for Ka’anapali.
• Ka’anapali condos are the outlier when it comes to resort condo inventory. Kapalua inventory increased 71% and Wailea inventory increased 44%. It is worth noting these increases are coming from near historic lows in inventory. That 71% increase in condo inventory in Kapalua is due to just 5 more listings.
• Other notable increases in inventory occurred in the markets that were the busiest earlier this year. Kihei active condo inventory increased 57%. Napili, Kahana and Honokowai active listings increased 41%.

Price Reductions

As of July 4th, 34.03% of all active home listings on Maui reduced their asking price one or more times. That compares to 33% on May 24th and 29.5% on June 7th. After seeing a small dip in price reductions in early June, those numbers appear to be rising again.

For condos, 24.63% of all active condo listings reduced their price one or more time. The increase in price reductions is steady. The percentage of active listings that reduced price was 18.2% and 20.9% on May 24th and June 7th respectively.

It’s important to note that the higher number of price reductions isn’t indicative of decreasing values at this point in time. In many cases, this is sellers who priced ambitiously adjusting to the realities of a shifting market.

Market Response to New Listings

Another metric that we’ve tracked in our market musings is the percentage of new listings going under contract within 10 days. We started to track this in mid February, a time period when competition for inventory remained incredibly strong. At that time, 56% of all new listings were under contract within 10 days. As posted in Musings XI, that number dipped to 35.54% for the period between May 18th and May 25th. For the period between June 14th and June 21st, the number dropped to 25.37%.

While the number above shows a pretty significant cooling of the market, context is key. Between June 14th and June 21st of 2019, only 17.28% of all listings went under contract within the first ten days of coming to market. There are still buyers out there acting quickly when well priced properties come to market.

Takeaways for Buyers and Sellers

When interest rates spiked over 6% in early June, the hyperbolic takes on the real estate market came fast and furious. The crowing of the bubble watchers became deafening. In places like Boise and Phoenix, it looks like there may be some drastic shifts in the market. That said, what’s true for Boise may not be true for Maui. Our goal is to strip out the hype so buyers and sellers can make informed decisions.

To be clear, the Maui Market continues to cool down from the frenzied market of earlier this year. While inventory is growing, the growth in inventory started later than most markets on the mainland. We are still seeing inventory levels well below normal. While pending sales are decreasing, the percentage of properties going under contract in ten days or less is higher than during the same period of 2019. As the numbers above show, market conditions are showing variability based on location and price points. Where you are buying or selling in the market will impact your experience.

Buyers shopping in most price points will appreciate the increased inventory compared to the scarcity of earlier this year. While competition is down, well priced properties may still see bidding wars. This is particularly true at the lower priced points of the market where inventory remains truly scarce.

Prospective sellers will want to look closely at conditions specific to their price point and community when pricing their property. In those areas where inventory is growing the most and demand is shrinking, you will want to be particularly mindful of not overpricing your property. Sales will likely take longer. With buyers largely moving out of the FOMO mentality, a little give and take may be necessary to get deals done.

Some Maui Beauty to Brighten This Post

Where our head is at after a three day weekend.🏖️ pic.twitter.com/YAHBectRfH

— HAWAI'I Magazine (@HAWAIIMagazine) July 5, 2022

Contact The Maui Real Estate Team

Questions about the market or this post? Thinking of buying or selling? Contact The Maui Real Estate Team. We look forward to being of assistance.