The twenty-sixth edition of the market musings is slower out of the gate than usual. So let’s cut to the chase and look at the April Market Activity and a couple of other metrics that speak to current and future market conditions.

April Market Activity

The tables below show new Inventory, new pending sales and closed transactions for the month of April. The previous five years are shown for additional context. The numbers point to a markedly quieter April compared to previous years with of course one obvious exception. April of 2020 was of course a month with no off island visitors and stay at home orders for all but essential employees.

	April 2023	April 2022	April 2021	April 2020	April 2019	April 2018
Homes	68	94	122	72	117	123
Condos	91	154	182	124	161	153

New inventory continues to be limited on Maui. New home listings came in 28% below April of 2022. The number of new listings is 42% and 45% below April of 2019 and April of 2018. New condo inventory in April came in 41% lower than April of 2022. It came in 44% and 41% lower than 2019 and 2018 respectively.

	April 2023	April 2022	April 2021	April 2020	April 2019	April 2018
Homes	65	89	124	45	108	91
Condos	92	140	216	33	135	166

The number of homes that went pending in April of 2023 is 27% lower than April of 2022. It is 40% lower than April of 2019 and 29% below April of 2018. The number of new pending condo sales in April is 34% below April of 2022. It is 32% lower than April of 2019 and 45% less than April of 2018.

	April 2023	April 2022	April 2021	April 2020	April 2019	April 2018
Homes	55	105	129	82	74	88
Condos	85	168	262	85	136	176

The number of homes that sold in April came in 48% lower than April of 2022. It came in 26% lower than April of 2019 and 37% lower than April of 2018. The number of Condo sales in April of 2023 is 49% lower than April of 2022. It is 37% lower than April of 2019 and 52% below April of 2018.

End of April Home Inventory

The charts below show active and pending home in inventory in April by price point and community. They also include the numbers from the previous two months to show the general direction of the inventory.

	2/28/23		3/31/23		4/30/23
	Active	Pending	Active	Pending	Active	Pending
<$750,000	10	7	8	6	7 (-1)	2 (-4)
$750,000-$999,999	30	28	19	35	24 (+5)	25 (-10)
$1,000,000-$1,499,999	59	40	47	31	50 (+3)	32 (+1)
$1,500,000-$1,999,999	32	7	29	11	30 (+1)	17 (+6)
$2,000,000-$2,999,999	37	13	38	9	30 (-8)	12 (+3)
$3,000,000-$4,999,999	35	9	36	12	38 (+2)	15 (+3)
$5,000,000-$9,999,999	26	9	35	8	33 (-2)	7 (-1)
$10,000,000-$19,999,999	13	1	12	3	13 (+1)	2 (-1)
$20,000,000+	5	1	6	0	5 (-1)	0
Totals	247	115	230	115	230	112 (-3)

	2/28/23		3/31/23		4/30/23
	Active	Pending	Active	Pending	Active	Pending
Haiku	27	5	26	4	18 (-8)	10 (+6)
Hana	11	1	12	1	10 (-2)	3 (+2)
Ka’anapali	10	5	9	5	11 (+2)	4 (-1)
Kahului	18	8	8	12	9 (+1)	11 (-1)
Kapalua	6	2	10	1	10	2 (+1)
Kihei	29	24	24	16	23 (-1)	13 (-3)
Kula	14	14	16	13	19 (+3)	15 (+2)
Lahaina	16	8	16	3	14 (+2)	4 (+1)
Makawao	27	8	23	10	20 (-3)	14 (+4)
Napili/Kahana/Hono…	12	2	14	3	17 (+3)	2 (-1)
Pukalani	7	6	6	4	7 (+1)	2 (-2)
Sprecks/Paia	10	0	9	2	9	2
Wailea	14	7	15	8	19 (+4)	4 (-4)
Wailuku	35	21	29	26	30 (+1)	23 (-3)

Three Observations from the End of April Home Inventory

• No big change. The biggest takeaway may be that the home inventory at the end of April is almost identical to the end of March. The active listings are the exact same and there are just three fewer pending listings.
• Honing in on the market by price point, active inventory increased in more price points than it decreased. Pending sales increased in just as many price points as it decreased. The biggest increase in active home listings occurred between $750,000 and $999,999. The biggest increase in pending sales occurred between $1,500,000 and $1,999,999 with $2,000,000-$5,000,000 also seeing an increase in buyer activity.
• Looking at shifts in inventory by community produced a mix bag. The inventory of active homes increased modestly in most communities. With pending sales decreasing in most communities. That said, there were some exceptions. Haiku active inventory dropped and pending sales rose sharply. Wailea’s active inventory increased the most and pending sales decreased the most.

End of April Maui Condo Inventory

The charts below provide end of the month active and pending condo inventory by price point and district. Keep in mind that the Wailea pending sales continue to receive a boost from 75 new developer units under contract in La’i Loa at Wailea Hills. These properties went pending 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 pending sales upwards in this price range.

	2/28/2023		3/31/2023		4/30/2023
	Active	Pending	Active	Pending	Active	Pending
<$250,000	2	2	0	2	1 (+1)	1 (-1)
$250,000-$499,999	16	14	14	10	14	13 (+3)
$500,000-$749,999	41	42	48	27	46 (-2)	32 (+5)
$750,000-$999,999	29	45	32	31	26 (-6)	38 (+7)
$1,000,000-$1,499,999	33	30	27	31	22 (-5)	26 (-5)
$1,500,000-$1,999,999	33	35	24	42	25 (+1)	40 (-2)
$2,000,000-$2,999,999	18	41	17	38	16 (-1)	39 (+1)
$3,000,000-$4,999,999	12	17	15	17	12 (-3)	17
$5,000,000-$9,999,999	13	0	13	2	12 (-1)	2
$10,000,000+	5	0	6	0	4	0
Total	202	226	196	200	178	208

	2/28/23		3/31/23		4/30/23
	Active	Pending	Active	Pending	Active	Pending
Ka’anapali	27	6	23	11	22 (-1)	12 (+1)
Kahului	3	4	4	0	4	4 (+4)
Kapalua	14	5	13	7	10 (-3)	5 (-2)
Kihei	52	79	59	49	54 (-5)	48 (-1)
Lahaina	14	9	17	6	13 (-4)	7 (+1)
Ma’alaea	5	7	5	4	6 (+1)	6 (+2)
Napili/Kahana/Hono…	52	21	43	25	41 (-2)	25
Wailea	28	85	27	89	24 (-3)	91 (+2)
Wailuku	7	8	5	9	4 (-1)	9

Three Noteworthy Things about the End of April Maui Condo Inventory

• The condo market experienced a 9% drop in active listing and a 4% increase in pending listings from the end of March to the End of April.
• The active condo inventory dropped in six price ranges, stayed the same in two and increased by just one in two price ranges. The biggest drop in active inventory occurred in the $750,000-$1,499,999 and $3,000,000 to $5,000,000 price ranges. Pending sales increased in four price ranges, decreased in three and stayed the same in three price ranges. The biggest increases in pending sales occurred between $250,000-$999,999.
• Inventory levels decreased in the majority of the communities around the island. Kahului was unchanged and only Ma’alaea saw an increase with just one new active listing. Lahaina experienced the biggest drop in active listings as a percentage of overall inventory. Pending sales increased in the majority of communities with Kahului seeing the largest overall increase. The Napili/Kahana and Honokowai communities both saw no change in pending sales. Kihei and Kapalua both saw a decrease in pending sales.

What Kind of Competition Are We Seeing for Properties?

In 2021 and the first quarter of 2022, bidding wars were common in the market. We started to see that type of competition wane in the second half of 2022. During the first quarter of the year, I started to see a few more over asking price sales on the MLS. That was particularly true with parts of the vacation rental condo market. Buyers jockeyed for the limited inventory. I thought it was worth looking at competition this April compared to our last couple of “normal” months of April.

While our MLS database does not show whether listings received multiple offers, we can of course see when properties sell for over asking price. I will make the assumption that properties selling for asking price received multiple offers. I will admit, that isn’t a fool proof metric. There are circumstances where a motivated buyer will bid above asking to fend off potential or perceived competition that may or may not appear. I have also seen circumstances with multiple offers that do not exceed asking price.

Looking at April’s sales, 25.45% of all homes sold for over asking price and a total of 46.43% sold for asking price or above. With condos, 20% of the sales closed for over asking price and 47.06% sold for asking price or above. In April of 2019, 13.51% of homes sold for more than asking price and 33.78% sold for asking price or above. For condos in April of 2019, 14.6% sold for over asking price and 42.34% sold for asking price or above. It is pretty striking that the market is that much more competitive than pre-Covid numbers even with substantially lower sales volume.

How Quickly Are New Listings going Under Contract?

I haven’t looked at this metric in a musings since the fall. Back then, a spike in interest rates over 7% caused properties to sit longer. Recently, it seems like more properties went under contract quickly again. Our office’s two newest listings both went under contract within the first few days of coming to market. I thought it was worth seeing if the quantitative numbers matched the anecdotal.

I looked at new listings between May 1st and May 8th. During that period, 25 homes came to market. Forty percent went under contract within 10 days of coming to market. For that same period, 26 condos came to market. Just under thirty-five percent went under contract in ten days or less.

For context, I looked at the same range of dates from 2019. Of the 33 homes that came to market during that time, 18.18% went under contract in ten days or less. Of the 39 condos that came to market, 23.07% went under contract in ten days or less.

Market demand, at least for that particular week of May exceeds what we were seeing during the same period of 2019, our last semi-normal market. I say semi-normal just because that was a year of more limited inventory.

Interest Rate Watch

One advantage of being late to publish, I can tell you that May is on track to be a little busier than I expected. Pending home, condo and land sales on island are at a high for the year. That said, some potential headwinds are growing. As of May 26th, the average interest rate on a 30 year fixed mortgage rose to 7.14%. That’s the highest they’ve been since last November.

When interest rates were this high in the fall, activity slowed in the market. This was particularly true for homes under $1,000,000 and non-vacation rental condos geared towards Maui Residents. If rates stay this high, I wouldn’t be surprised to see a similar impact on the market.

One of the reasons for the recent increase in rates is due to the debt-ceiling standoff. At the time that I am writing this post, it looks there may be a possible solution to the debt ceiling crisis with President Biden and Speaker McCarthy coming to an agreement in principle. Now, that still needs to go to vote on the house floor. In today’s politics, I don’t anything for granted. If the deal is passed, rates may ease back down some. If it doesn’t pass… Yikes.

A Little Maui Beauty to Brighten This Post

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If there is any one community within Maui that epitomizes the Covid era real estate boom, it is Kapalua. This resort community on Maui’s Northwest coastline was always an appealing locale for a segment of Maui’s luxury property buyers. That said, inventory tended to be higher and days on market tended to be longer than other resort areas like Wailea and to a lesser extent Ka’anapali. With that context, the recent surge in activity in Kapalua is that much more astounding. In this post, we take a look at some of the numbers from the last 18 plus months of sales. We also give a few thoughts towards the end of the post on the market outlook for 2022.

Kapalua Homes

Kapalua was one of the first luxury home markets on the island to show signs of life in the second half of 2020. The strong performance continued into 2021. The numbers below represent highlights from the 2021 market activity.

Kapalua 2021 Home Sale Notable Numbers

• Maui Realtors reported 29 homes sold within the Kapalua Resort during 2021. That is a 70% increase over 2020.
• The 29 sales is the highest ever number for a single year in Kapalua. It is worth noting that 2020 was the second strongest year ever for home sales in Kapalua.
• The median price of homes sold during 2021 is $4,135,000. The average price is $4,972,327.
• The highest priced transaction closed for $15,000,000. That was for 9 Kapalua Place. This beachfront home includes over 7,000 square feet of living space on a .7 acre parcel of land.
• That was one of three closes over $10,000,000. The other two sales included another beachfront home in the Kapalua Place subdivision and a home in Kapalua Plantation Estates.
• Pineapple Hill was the busiest subdivision for transactions with 15 closes. Plantation Estates saw the next most activity with 6 sales. They were followed by Honolua Ridge with 4 sales, the aforementioned Kapalua Place’s 2 closes and a single home sale in Mahana Estates.

Behind the Numbers

As mentioned above, Kapalua’s market surge started in the second half of 2020. Specifically, it was the last quarter of 2020 when transaction volume picked up. Nine of seventeen sales for the year closed in November and December. The upturn in market activity happened earlier than the Wailea Market, a larger resort community with typically much higher sales volumes. What was it that drove earlier buyer interest in Kapalua? Well it wasn’t any new resort amenities. The biggest driver was the proximity to one of the island’s better private schools.

Early in the pandemic, Kapalua became a Zoom town. A large number of Silicon Valley employees moved to Maui to work remotely. Initially, they came as renters. Those with families had their kids learning remotely for the last couple of months of the 19/20 school year. At the start of the 2020/21 school year, the enrollment of Maui Prep ballooned by 100 students. All of the new students came from Silicon Valley families. The school, located minutes from Kapalua, offered a draw to remote workers that a place like Wailea did not. Many of the families that started as renters began to purchase property in the fall of 2020 and that momentum continued into 2021.

It’s worth looking at the 2021 sales more closely as market conditions were not uniform throughout the year. Twenty of the twenty-nine sales in Kapalua occurred in the first six months of the year. During the first part of the year, there was still a decent supply of homes for sale. The decreased sales volume during the second half of the year can be attributed to a combination of reduced inventory, seasonality and perhaps slightly lesser demand. Though, I would put inventory at the top of that list by a good margin. Scarcity remains a driving factor going into 2022. I will comment more on that in the market outlook below.

Kapalua Condos

The Kapalua Resort set a new record for condo sales in 2022. The dynamics driving the market were a little different than the home market. It was less of a case of remote workers and more a case of the Covid second home boom. The numbers below show some of the 2021 market activity followed by a few more thoughts on what drove the numbers.

Kapalua 2021 Condo Market Numbers

• Maui Realtors reported 145 sales in the Kapalua Resort during 2021. That is a 363% increase in activity over 2020.
• For additional context, the next closest year for condo sales in Kapalua is 2004. There were 87 closed transactions that year.
• The median price of the condos sold in 2021 is $1,220,000. The average price is $2,060,805.
• The highest priced transaction closed for $13,295,000. That type of cash buys you a 4,050 square foot, four bedroom, four and a half bathroom unit at the Montage Residences Kapalua Bay with stunning views. This is the highest ever sales price for a condo in Kapalua.
• The lowest priced condo sold in 2021 closed for $600,000. That sale was a 1 bedroom, 1.5 bath unit at Kapalua Golf Villas.
• Golf Villas experienced the most sales activity in the resort with 44 closes in 2021. Kapalua Bay Villas came next with 30 closed transactions followed by Kapalua Ridge with 28 closed sales and Montage with 27. On the quieter end of the spectrum, 6 sales closed in Coconut Grove, 5 closed in the Ironwoods and 5 closed at the Ritz Carlton Residences.
• 2021 was the busiest year for transaction volume on MLS records for the Ridge, Bay Villas, Golf Villas and Montage. It was the busiest year since 2003 at Coconut Grove and the busiest since 2004 at the Ironwoods.

Digging into the Condo Numbers

The Kapalua Condo market didn’t fully kick into gear until early 2021. Market activity more closely resembled the activity in other condo markets around the island. A modest uptick in activity in late 2020 followed by frenzied activity after the new year. While activity slowed a little in the second half of the year, sales volumes for Kapalua condos did not dip to the same extent as the home market. Forty-six percent of all condo sales occurred in the second half of 2021 compared to only 31% of home sales. While supply shrank as the year went on, there was still enough supply available to meet the considerable demand.

Kapalua Land

I usually don’t spend too much time discussing land sales when I provide these community level market updates. That said, the 2021 Kapalua land market can’t be ignored. The increase in transaction volume compared to 2020 was bigger than any other segment of the Kapalua market.

Notable Land Sale Numbers

• There were 60 lots sold in Kapalua during 2021. That calculates to a 750% increase in transaction volume compared to 2020!
• The 60 sales is almost 1/4 of the 247 all time sales in Kapalua reported on the MLS.
• Mahana Estates led the way with 42 closed transactions. These were new developer sales.
• Honolua Ridge saw the second most sales activity with 11 sales. Realtors reported 5 sales in Plantation Estates and 2 sales in Pineapple Hill Estates.
• The median price of lots sold is $995,000. The average price is $1,156,000.
• The highest priced sale closed for $2,600,000. The 2.7 acre lot in Plantation Estates offers beautiful views towards Honolua Bay.
• The lowest priced lot closed for $700,000 in Mahana Estates.

Looking Behind the Land Numbers

This was the year of the great Mahana Estates land rush. At the start of the pandemic, I don’t think anyone would have predicted this development would sell out by the end of 2021. Market response for was tepid the first few years the development was on the market. One lot sold in 2019 and two in 2020. There were a couple of different days in February where 3 lots closed in a day. It will be interesting to watch this development evolve and build out. There were a fair share of bulk purchases among this year’s Mahana Estates Sales. Were those land speculators, spec builders or long term holds?

The 18 non-Mahana Ridge sales are nothing to sneeze at. Those 18 sales alone are more than any one year since 2005. The lack of inventory in the home market during parts of 2021 definitely pushed some buyers to build.

2022 Market Outlook

Inventory, or lack thereof, appears to be the biggest market driver to start 2022. At the time of this post, there are only 6 active Kapalua Homes for Sale. Three additional homes are under contract. As of right now, there are only 12 active Kapalua Condo listings. It is worth noting that only 2 of the active condo listings are priced for less than $2,000,000. An additional 12 condos are currently under contract. Land is even more scarce. There is only one lot for sale in Kapalua. An additional 9 lots are under contract.

It’s safe to say that 2022 shouldn’t threaten the record sales volumes of 2021. The question is whether we will see any inventory relief during the year. Will some of the people remote working list their homes if they go back to the mainland? Will the high prices entice any sellers to come to market?

What about demand? As of right now, demand appears to be pretty strong for the limited inventory available. That is putting upward pressure on pricing. Looking forward, are there any other threats to demand looming on the horizon? There is a lot of discussion about rising interest rates and their impact on the national real estate market. There are arguments on both sides, but a lot of economists seem to be downplaying the potential impact on buyer demand due to the acute supply issues. That said, you would think the impact might be even less in Kapalua where 62% of last year’s sales were cash.

I would argue that state of the overall economy and the trajectory of the stock market are likely to have a bigger impact. Over the years, we’ve noted something of a correlation between sales volume in the resort communities and the stock market. Good years for the Dow means more financial power for discretionary purchases like second homes.

The last question is whether we might see any buyer resistance on pricing. In particular, I wonder about the impact in the vacation rental condo market. Maui has always been a place where more people bought for love than rental returns. That said, the recent price increases resulted in even smaller cap rates. Will the combination of limited returns on higher purchase prices shrink the buyer pool at all? Thus far, that doesn’t seem to be the case.

Contact The Maui Real Estate Team

Contact The Maui Real Estate team if you are considering buying or selling property in Kapalua. We would welcome the chance to discuss market conditions specific to your interests.

The Kapalua Real Estate market has had a tumultuous last five years. The real estate downturn battered the Kapalua Resort’s parent company Maui Land and Pineapple. The financial difficulties and eventual foreclosure of the Ritz Carlton Residences was perhaps the biggest symbol of the recent struggles of the resort. All of that said, the Kapalua Real Estate market showed signs of life in 2013 and the Ritz Carlton Residences are under new ownership and management. The relaunch of the Residences under the Montage brand has brought a buzz back to Kapalua. While Montage brings the buzz, Kapalua wasn’t exactly going to seed. This remains one of the more beautiful resort communities on the planet with renowned golf courses and some of the prettiest beaches in the country. This post takes a look at the state of the Kapalua market for 2014. We compare how the market performed compared to 2013.We take an even deeper dive into recent market history with some of the condo complexes. We also give our thoughts on what some of the numbers mean and the current state of the Kapalua Real Estate Market.

Kapalua Condos

When comparing the first eight months of 2014 to the first eight of 2013, the Kapalua Condo market has seen a modest decrease in sales activity. There have been 22 condo sales to date this year vs 24 in the same period last year. There are seven different condominium communities within the Kapalua Resort. The difference in sales between those communities year to year has been more substantial.

With the differences in sales volume, I thought it might be worth delving into the market dynamics at a number of the seven different condo communities.

The Montage Residences at Kapalua Bay
Montage has grabbed the most headlines of the Kapalua Condo communities this year. The project was previously known as the Ritz Carlton Residences on Kapalua Bay. It came to market in 2009. Developer sales at the upscale condo complex were shut down in 2011 as the development faced headwinds in a more difficult real estate market. While the property has always been impressive, so were constructions costs. Coming to market in the doldrums of the real estate downturn was too tall of a task. The property was foreclosed on in early 2013. Lantern Capital, the new owners, subsequently appointed Montage Hotel and Resorts to manage the property. Montage is a well established luxury brand with a loyal following thanks to communities in Deer Park, Beverly Hills and Laguna Beach. Prior to coming back to market, significant improvements were made to what was already arguably the nicest physical plant of any condo community on island. Among the improvements was the opening of a new restaurant and bar Cane and Canoe. It has been receiving rave reviews since it opened.

The combination of the Montage brand, the beautiful property and the five star service create a package that has been very well received since the property came back to market in June. There have been five developer sales and one resale over the last few months. This is particularly impressive considering the price points that are involved. The lowest priced sale was $4,300,000 while the highest sale was $8,250,000. The high sale was the highest priced condo sale in Kapalua history. The second and third highest priced sales in Kapalua history also occurred at Montage over the last couple of months. There was one other thing that I found to be notable among the sales that have occurred. Four of the Montage buyers were represented by Wailea based agents. While Wailea and Kapalua are both world class resort communities, they each have their own distinctive feel. You seldom have buyers torn between the two communities. The buyers tend to gravitate toward one community over another. While the agents in our office are location agnostic, you tend to see more agents who focus on one of those communities instead of both. It says something about the compelling nature of the The Montage Residences at Kapalua that you are seeing Wailea based agents, and presumably Wailea type buyers making the trek up the coast to Kapalua.

At this time, there are two additional Montage Kapalua condos that are currently under contract with five others units listed. They will slowly release the remaining developer condos out on to the MLS as other units are sold. We anticipate that this luxury development will remain a popular offering for Maui Luxury condo buyers for some time to come.

Coconut Grove and The Ironwoods
I thought it was worth touching on these properties as they formerly had the distinction of being Kapalua’s most upscale condominium developments. One might think that the introduction of Montage into the market might have an adverse effect on both of these condos. I am not so sure that will be the case. It could be argued that Montage will be a complimentary rather than a competitive offering. All three condominiums have their own diverse personalities, locations and physical plants. Coconut Grove offers a lower density complex with an incredible location right on Kapalua Beach. The Ironwoods are also lower density and have their own beautiful setting nestled between Oneloa Beach and the fifth hole of the Kapalua Bay Course. The Ironwoods are also available at a lower price point than either Montage or Coconut Grove. Both the Ironwoods and Coconut Grove are different from Montage in that they prohibit vacation rentals. Neither condo complex tends to see a high volume of real estate transactions in any one year. It will likely take a few years before we get a better sense of how those properties continue to be received by the market with Montage available as another options for Ultra Luxury Condo buyers.

Kapalua Golf Villas
The condo complex that saw the sharpest decrease in sales activity when comparing this year to last year is Kapalua Golf Villas. I would argue that the decreased activity may be a reflection of the a strengthening situation at Golf Villas rather than a weaker market. To understand my reasoning, it is worth taking some time to look at the history of the complex. Aside from the former Ritz residences, it is safe to say that Golf Villas has seen more upheaval over the last few years than any other condo complex in Kapalua. The challenges stemmed from a large assessment that was imposed on the condos. When crews began work re-roofing the condos in the fall of 2011, they started to uncover some much larger maintenance issues that needed to be addressed immediately. Each of the condo owners were required to pay a special assessment over a 24 month period. The assessment ranged from an extra $700 to well over $1,200 a month depending on the size of the floor plan. Within a couple of months of the assessment being announced, there was a flood of inventory that hit the market. The numbers below provide some interesting context for the market dynamics over the last four years.

• In 2011, there were 11 sales at Kapalua Golf Villas and the median sales price was $510,000. The low sales price for the year was $425,000. It was November of 2011 when the need for a special assessment was announced.
• In 2012, there were 25 sales with a median price of $480,000. The low sale was $330,000. That was one of five sales during 2012 below $400,000 at Kapalua Golf Villas.
• In 2013, the sales volume at Kapalua Golf Villas dipped to 11 sales, but the median rose dramatically to $650,000. The low sale price was $489,000.
• In 2014, there have 5 condos sold year to date with a median price of $710,000. The low sale was $645,000.

The flood of inventory that hit the market in late 2011 and 2012 forced some sellers at Kapalua Golf Villas to slash prices. It was clear there were owners that didn’t want to pay or couldn’t afford to pay the new assesment. As a result, you saw those five exceptionally low sales prices. The scope of work covered by the assessment was comprehensive and suggests that the heavy lifting for the maintenance should be covered for some time. The high volume of sales suggests that there were quite a few buyers who saw the upside in the improvements and the long term potential. By the beginning of 2013, the pool of discounted condos at Golf Villas was largely gone and prices began began to recover quickly. You can see that reflected in the significant increase in median prices. By 2014, sales volumes have slowed even further. Sellers have been trying to push the envelope at Golf Villas on pricing. As it stands, the low sale for this year is just $5,000 below last year’s median. This should make for lower sales volume and lower potential for appreciation the rest of the year.

The Ridge at Kapalua
The Ridge at Kapalua hasn’t seen the same tumult that was experienced at Golf Villas, but there have been some similarities in recent market dynamics. In 2011, sales at the Ridge were slow with only 3 transactions recorded. In 2012, we saw some more motivated sellers as well as a few bank owned properties hitting the market. That contributed to a stronger year for sales with a total of 14 transactions recorded. Buyers were able to take advantage of some lower priced opportunities, and we even saw some Bank owned sales in the $400s. In 2013, the lower priced inventory was gone and we started to see stronger appreciation. That said, it was interesting to note that the progression wasn’t linear. The first half of the year saw only one transaction, the second half of the year had 12 sales. Buyers appeared reticent to support the higher prices at the first half of 2013, but the barrier was broken as the comparative value of the Ridge was recognized. Well maintained grounds, beautiful views and a good location compared to comparable priced properties helped drive buyers into the market. For 2014, sales volumes have slowed and the rate of appreciation has begun to slow as well. Buyers seem to be putting a premium on quality over the lower priced units. The 2 one bedroom units that have closed have been very high quality condos in the $800s, while 2 of the 3 two bedroom units have been priced in the $1,400,000 range. I suspect we will continue to see a focus on quality for the remainder of the year.

Kapalua Bay Villas
When looking at the year to year sales, Kapalua Bay Villas has seen the same number of sales to date this year as it did over the same period last year. That isn’t necessarily a good thing in light of current inventory. There are currently 24 active listings at Bay Villas with one condo under contract. Bay Villas has had pretty extensive inventory for the last few years. I would anticipate that the depth of inventory will significantly limit the potential for appreciation. Sellers will need to listen to market feedback and adjust pricing if we are going to see any significant increase in sales volumes.

Overall, the Kapalua Condo market seems to be transitioning from a period where a good portion of the transactions were value driven. After seeing significant appreciation at condos like Golf Villas and the Ridge over the last couple of years, the opportunity for bargain hunting is limited. It is safe to say that the surge of activity at Montage is not bargain hunting. More buyers are seeking quality above all else. There is plenty of quality to choose from among the active listings. You can check out the current inventory of Kapalua Condos for Sale at MauiRealEstate.com.

Kapalua Homes

The Kapalua Home market has not been as robust as the condo market for the year to date. There have been five sales thus far with a median sales price of $3,250,000. By comparison, last year there had been nine sales by this point in time at a median price of $3,500,000. There are a few things that I thought were noteworthy about this year’s closes.

• The five sales included one close in Honolua Ridge, two closes in Pineapple Hill and two more sales at Pineapple Hill Estates.
• The Honolua Ridge close was a bank owned property. This neighborhood was just coming to market towards the tail end of the last real estate boom. As a result, there have been quite a few distressed sales.
• The bank owned property was the lowest priced sale at $1,700,000. This was the only home sale under $3,000,000 in Kapalua this year.
• The high sale was $4,700,000 for Carlos Santana’s home in Pineapple Hill. That home has 7,687 square feet of living space.

Island wide, home sales over $2,000,000 are up 32% compared to last year. It is interesting that Kapalua sales activity has dropped in light of the island wide increase in high end sales. That said, the relatively small sample size of Kapalua sales makes me reticent to read too much into the drop in activity. One thing that I can say is that there have been fewer opportunities for owners looking for bargains. Over the previous two years, a number of the homes that have changed hands have been value purchases priced at the very low end of the various Kapalua neighborhoods. This year there was just the one sale under $2,000,000. There has also just been one other listing priced below $2,500,000. The smaller pool of purchases this year appear to be skewed more towards buyers seeking quality homes that fit their needs.

Moving forward for the rest of the year, Kapalua still has a significant inventory of homes available with 24 active listings. Based on the current pace of sales, that would suggest that there are at least a couple of years worth of inventory still available. While conventional wisdom indicates that more than six months of inventory can lead to price decreases, that isn’t as applicable to a market like Kapalua. Kapalua and other high dollar markets typically have much longer days on market. It is not uncommon for some of the highest priced properties to sit for years. The sellers of these homes are typically high net worth individuals with the staying power to hold on to the property long enough to wait for offers that fit their needs. There may be one or two sellers among the active listings who are motivated; the challenge lies in identifying those sellers. While values are unlikely to fall at this point, the depth of inventory should blunt any movement to push prices upward. You can see the full inventory of Kapalua Homes for Sale at MauiRealEstate.com.

Kapalua Land

The land market on Maui hasn’t seen a ton of transactions as of late. When you look at a smaller community like Kapalua, the number of transactions shrinks even further. There have been three land transactions in Kapalua this year. One sale was located in the Plantation Estates subdivision. The other two were in the Honolua Ridge area of Plantation Estates. That total is lower than the five sales that we saw last year as of this time. There are a total of nine active listings currently. They are spread amongst all of the residential communities including Plantation Estates, Pineapple Hill, Pineapple Hill Estates and Honolua Ridge. Plantation Estates and Honolua Ridge offer acreage for potential buyers with some lots in Honolua Ridge in excess of 20 acres.

Kapalua Long Range Outlook

There is much to like about Kapalua property over the long term. The resort seems to have weathered the storm of the last real estate downturn and is positioned to grow as a destination. Montage will help to draw new visitors to the resort community. Some of those visitors may find themselves compelled to own their own slice of paradise in Kapalua. Some of those will snatch up some of the remaining new developer inventory at Montage, while others may opt to look at one of the nearby condos, one of the residential neighborhoods or identify a lot to build a dream home. The natural environment, beaches, golf and other amenities make Kapalua as a whole offer a world class destination resort and make for a compelling place to own a home. Contact The Maui Real Estate Team if Kapalua appeals to you. We would welcome the chance to speak with you about the various properties available for sale around the resort. There may be one that fits you!

Kapalua is a beautiful resort community on the Northwest coastline of Maui. The resort boasts stunning natural beauty, renowned beaches, tropical foliage and two great golf courses. One of the courses is the site of the first PGA event of the year. The community is home to beautiful estate properties and luxury condominiums. We wanted to look at how the Kapalua market performed in 2012, how it has done in the first two months of 2013, and the outlook for the rest of the year.

There were six homes sold in Kapalua during 2012 with a median sales price of $2,880,000. The 2011 numbers were eleven sales with a median sales price of $2,850,000. That is a 45% drop in sales volume and a 1% increase in median values.

The condo market in Kapalua was more active in 2012 with fifty closes at a median sales price of $570,500. There were twenty-seven sales in 2011 with a median price of $830,000. That is a robust 85% increase in activity for 2012, while the median price dropped by 32%.

There were six land transactions in 2012 with a median sales price of $838,200. There were five land transactions in 2011 at a median sales price of $950,000. With sample sizes this small I am reticent to comment on changes in volume and median as they tend to be misconstrued.

Here are some other numbers that I found interesting about the 2012 Kapalua Real Estate Market.

• The high sale for a home in Kapalua during 2012 was $5,998,000 for a 7,645 square foot home in Plantation Estates
• All of the home sales in Kapalua were $2,000,000 or higher. Kapalua has the highest entry point of any community on Maui with the exception of Makena.
• There were four homes sold in Plantation Estates. That was the busiest year of sales ever in Plantation Estates.
• 197 Plantation Club Drive sold for $2,600,000. That was the lowest recorded sales price for a home in Plantation Estates.
• The high condo sales price in 2012 was $3,425,000 for a three bedroom, four bath beachfront condo at Kapalua Ironwoods.
• There were a total four condo sales over $1,500,000 in Kapalua in 2012.
• Kapalua Golf Villas was the complex with the most activity. There were 25 closes at Golf Villas in 2012.
• There were seven bank owned sales and five short sales that closed in Kapalua during 2012.

This was an interesting year for the Kapalua Real Estate market. The decrease in home sales follows a market trend we saw with luxury properties around the island. Sales of homes over $2,000,000 were down island wide including other resort markets like Wailea and Makena. For the sales that did close, value appeared to be a driving force among many of the sales. The six sales included the lowest priced sale in Plantation Estates and the second and third lowest sales prices for Plantation Estates. In addition to those three value closes, we also saw the second lowest sales price for a home on two acres or more in Kapalua up in Honolua Ridge.

The Kapalua condo market saw a sharp increase in activity. The focal point for the boost in activity was Kapalua Golf Villas. Last year was a year of transition for Golf Villas. It was discovered late in 2011 that the complex needed to undergo a big maintenance project. That resulted in a significant assessment for all of the owners. The assessment flushed a lot of motivated sellers on to the market. The market absorbed most of these listings in 2012 as buyers took advantage of good values in a complex that should have strong upside with all major maintenance issues in the process of being addressed. Kapalua Ridge was another complex that saw pretty good activity as buyers took advantage of a number of listings offered at good comparative values.

The Kapalua land market saw a very slight uptick in activity during 2012. That is in line with what we saw in general island wide. We did start to see a bigger uptick in land sales on other areas of the island late in 2012, but much of that activity came at lower price points where buyers were looking for alternatives due to a diminished inventory of homes. Kapalua still had a pretty healthy home inventory through much of 2012 as it does during the start of 2013.

What does 2013 have in store for the Kapalua Real Estate market? We have two months of sales / results for some perspective. On the home front, early market feedback shows that buyers are continuing to show a trend towards value purchases among the Kapalua Luxury home inventory. There has been one sale and there are two properties pending. The one sale was $1,795,000 for a home in Pineapple Hill. That is at the low end of pricing for Pineapple Hill historically. One of the pending sales is a short sale up in Honolua Ridge. Construction was abandoned on the home and the price reflects the work remaining to be completed.

In addition to the two properties currently under contract, there are an additional 32 homes actively listed in Kapalua ranging in price from $2,295,000 to $28,000,000. The depth of inventory makes for good selection for buyers. Typically, this type of inventory may create some motivated sellers. That being said, luxury home owners tend to have more staying power when it comes to waiting out the market.

It will be interesting to monitor the condo market in Kapalua during 2013. The initial market data appears to be positive with 10 sales and 4 pending sales to date. Of note, two of the sales and one of the pending were priced over $1,500,000. We are on pace to exceed the ultra luxury sales totals for 2012.

There are currently 60 condos active in Kapalua. The chart below shows the current number of active listings by complex and compares it to last year’s sales by complex.

Looking at the chart above, you can see there are some complexes with a year or less of inventory and some condos that have an abundance of inventory based on last year’s absorption rates. Last year’s busy complex was Kapalua Golf Villas due to an abundance of motivated sellers. The motivated sellers have for the most part sold their properties, and we aren’t seeing the rock bottom prices that we saw just a year ago. I would surmise that Kapalua Golf Villas will see a little less activity as prices return to normal. At the other end of the market, Kapalua Bay Villas has the biggest inventory compared to recent sales. Typically, that type of inventory could result in a few motivated sellers coming to market. That being said, many of the Bay Villas sellers might have the means and inclination to wait until market conditions improve in their favor. Bay Villas will be a place to watch the rest of the year.

A condominium complex that might have the biggest impact on the Kapalua Market isn’t event listed in the chart above. I am speaking of the Residences at Kapalua Bay, formerly known as the Ritz Carlton Residences at Kapalua Bay. The Residences opened their doors in 2009. The developers spared no expense when they built the Residences. Finishing and materials are all top notch. Unfortunately, they had a tough time recouping their investment in a slumping real estate market. The property was foreclosed upon in June of 2012. A foreclosure auction was held in December with a winning bid of $55,000,000. On January 1, Timbers Resort took over management of the property for Ritz Cartlon. On February 1, 2013, a confirmation hearing was held for the foreclosure auction. Two other parties ended up bidding on the sale driving the price up to $100,000,000. The resulting sale should take up to two months to be completed. That means it is likely that at some point later this year, condos at the Residences at Kapalua Bay will be coming back on to the market.

The Residences at Kapalua Bay will have a significant impact on the ultra luxury market place in Kapalua. They will offer significant competition to sellers at places like Coconut Grove, The Ironwoods and other luxury condominium developments around the island. The full ownership condominiums at the Resort include both three and four bedroom floor plans with roughly 3,000-4,000 square feet of living space. The amenities and the physical plant of the Residences are second to none on island. It will be interesting to see how they are received by the market now that their financial future is well defined and market conditions have improved. Contact The Maui Real Estate Team if you are interested in being kept up to date on the latest developments regarding The Residences at Kapalua Bay.

What does this all mean for Kapalua Buyers and Sellers for the rest of 2013? Buyers should find that the Kapalua market has plenty of inventory to choose from throughout this year. The only place with a scarcity of inventory is at the entry level of the Kapalua Condo market. Kapalua condo buyers will find a lot fewer rock bottom price opportunities with fewer bank owned properties coming to market, and the situation at Kapalua Golf Villas stabilized. Sellers will find that there is a fair amount of competition in the marketplace. If they want to sell quickly, they will need to price well compared to the rest of the market. Contact The Maui Real Estate Team today with questions or for assistance buying Kapalua Properties. You can search the current active inventory of Kapalua Homes for Sale and Kapalua Condos for Sale on MauiRealEstate.com.

Billy and I had the opportunity to attend a broker’s open house up in the beautiful Plantation Estates neighborhood in Kapalua last night. The event was hosted by Maui Estates International at an estate property situated on the 16th hole of the renowned Plantation Course. As you can see from the picture below, the views are pretty extraordinary. This home is currently offered at $10,900,000.

While we were only able to view this listing, there were 13 other properties that were featured as part of a Realtor Caravan Event. Kapalua remains a buyer’s market with a healthy inventory of homes, condos and luxury homesites available. You can browse the full active inventory of Kapalua Homes for Sale and Kapalua Condos for Sale on MauiRealEstate.com. Contact The Maui Real Estate Team for additional information on the Kapalua Real Estate market.