Tag: Kapalua Condos

This is our 24th installment of the Maui Market Musings. This latest edition looks at market activity and inventory levels as of the end of February. These posts tend to be long so I will keep the intro on the short side. Without further ado, here are the numbers.

February Market Activity

The tables below show new inventory, new pending listings and closed transactions during February with data from the previous five years provided for additional context.

New Inventory

	2/23	2/22	2/21	2/20	2/19	2/18
Homes	68	122	117	119	141	115
Condos	82	178	202	159	161	191

Like most places, inventory remains constrained on Maui. February did not provide much in the way of inventory relief. New home inventory came in 44% lower than February of 2022. It is between 41% and 52% lower than the three Februaries prior to the start of Covid. New condo inventory is 54% lower than February of 2022. It is anywhere between 48% and 57% lower than any of the three months of February between 2018 and 2020.

Pending Sales

	2/23	2/22	2/21	2/20	2/19	2/18
Homes	57	94	133	85	90	83
Condos	79	170	238	127	127	161

While inventory remains low, transaction volume does too. Pending home sales came in 39% lower than last year. The activity in the home market for this February is anywhere between 31% and 37% below the three Februaries between 2018-2020. For the condo market, the drop from last year is more dramatic with 54% fewer pending sales. February 2023 pending condo sales are anywhere between 38% and 51% below the three Februaries prior to Covid.

From time to time, I will hear someone rationalize that low buyer activity is just due to lower inventory. You might be able to make that argument with some segments of the vacation rental condo market. That said, affordability is clearly a significant factor in driving the lower volumes. Prices just haven’t seen significant adjustments since the spike in rates. That’s not to say that there aren’t buyers in this market, it is just a smaller pool.

Closed Transactions

	2/23	2/22	2/21	2/20	2/19	2/18
Homes	38	83	96	80	75	95
Condos	65	157	162	130	119	123

This February’s closed transactions reflect the low pending sales between November and January. For homes, the 38 homes sold is 54% lower than last February. That is between 49% and 60% lower than the three last pre-Covid Februaries. On the condo side, the 65 closed sales is 59% below last year and anywhere between 44% and 50% below any February between 2018 and 2020.

End of February Maui Home Inventory

The charts below show active and pending home sales by price point and community on the last day of the month over the last three months.

	12/31/22		1/31/23		2/28/23
	Active	Pending	Active	Pending	Active	Pending
<$750,000	6	10	10	11	10	7 (-4)
$750,000-$999,999	25	28	21	25	30 (+9)	28 (+3)
$1,000,000-$1,499,999	78	20	71	30	59 (-12)	40 (+10)
$1,500,000-$1,999,999	36	11	33	9	32 (-1)	7 (-2)
$2,000,000-$2,999,999	37	12	42	7	37 (-5)	13 (+3)
$3,000,000-$4,999,999	31	9	32	10	35 (+3)	9 (-1)
$5,000,000-$9,999,999	27	8	27	6	26 (-1)	9 (+3)
$10,000,000-$19,999,999	14	0	16	0	13 (-3)	1 (+1)
$20,000,000+	4	2	5	1	5	1
Total	258	100	257	99	247 (-10)	115 (+16)

	12/31/22		1/31/23		2/28/23
	Active	Pending	Active	Pending	Active	Pending
Haiku	29	7	26	7	27 (+1)	5 (-2)
Hana	10	1	9	1	11 (+2)	1
Ka’anapali	9	3	10	5	10	5
Kahului	16	13	13	11	18 (+5)	8 (-3)
Kapalua	5	3	7	1	6 (-1)	2 (+1)
Kihei	39	7	32	17	29 (-3)	24 (+7)
Kula	21	10	21	11	14 (-7)	14 (+3)
Lahaina	18	11	19	9	16 (-3)	8 (-1)
Makawao	35	4	31	6	27 (-4)	8 (+2)
Napili/Kahana/Hono	13	3	13	1	12 (-1)	2 (+1)
Pukalani	7	3	11	4	7 (-4)	6 (+2)
Sprecks/Paia	9	1	8	1	10 (+2)	0 (-1)
Wailea	13	6	16	3	14 (-2)	7 (+4)
Wailuku	25	25	30	17	35 (+5)	21 (+4)

Three Notable Things About the End of February Maui Home Inventory

• Active home inventory dropped 4% between January 31st and February 28th. Pending sales increased 16%. The new listings in February and the new pending sales in February further up the page provide some context. The decrease in inventory is largely due to new listings coming in way below normal. An increase in pending sales is pretty normal for this time of year, but the rate of increase is well below normal.
• Market activity was something of a mixed bag by price point. The $1,000,000-$1,499,999 saw the biggest increase in pending sales. That is a little bit of a surprise with interest rates increasing again.
• Looking at the inventory at a community level, all of Upcountry saw an increase in pending listings and a decrease in active listings. Kula inventory is particularly low. Kihei also saw a notable increase in pending sales. The resorts were relatively quiet. While Wailea pending sales increased by a few, buyer activity is still below normal for this time of year.

End of February 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 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. 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. Eight units in Paradise Ridge Estates closed on March 1st so the impact will be diminished in next month’s numbers.

	12/31/22		1/31/23		2/28/23
	Active	Pending	Active	Pending	Active	Pending
<$250,000	2	2	1	2	2 (+1)	2
$250,000-$499,999	12	16	14	11	16 (+2)	14 (+3)
$500,000-$749,999	38	25	49	31	41 (-8)	42 (+11)
$750,000-$999,999	42	27	39	42	29 (-10)	45 (+3)
$1,000,000-$1,499,999	32	21	29	32	33 (+4)	30 (-2)
$1,500,000-$1,999,999	26	29	30	35	33 (+3)	35
$2,000,000-$2,999,999	18	36	17	40	18 (+1)	41 (+1)
$3,000,000-$4,999,999	10	18	11	17	12 (+1)	17
$5,000,000-$9,999,999	14	0	12	2	13 (+1)	0
$10,000,000+	4	0	4	0	5 (+1)	0
Totals	198	174	206	212	202	226

	12/31/22		1/31/23		2/28/23
	Active	Pending	Active	Pending	Active	Pending
Ka’anapali	22	9	24	12	27 (+3)	6 (-6)
Kahului	4	3	3	4	3	4
Kapalua	12	3	13	6	14 (+1)	5 (-1)
Kihei	61	45	65	72	52 (-13)	79 (+7)
Lahaina	11	12	12	9	14 (+2)	9
Ma’alaea	5	5	5	7	5	7
Napili/Kahana/Honokowai	50	16	50	14	52 (+2)	21 (+7)
Wailea	27	79	26	81	28 (+2)	85 (+4)
Wailuku	4	4	7	6	7	8 (+2)

Three Notable Things from the End of February Condo Inventory

• Active condo listings dipped 2% and pending condo listings increased almost 7% between January 31st and February 28th. Again, the story may be better explained by the numbers for new inventory and new pending sales in February further up this post. It’s expected to see pending sales increase in February. The extent to which they are increasing is well below normal.
• Looking at active and pending sales by price point, the biggest decrease in active listings and the biggest increase in pending listings occurred under $1,000,000. The higher price points were quiet with an increase in listings and only one additional pending over $1,500,000..
• At a district level, Kihei and Napili/Kahana and Honokowai saw the biggest increase in pending sales. This is not too big of a surprise considering the season. This is peak buying season for vacation rental condos. The resorts are surprisingly quiet with Ka’anapali and Kapalua seeing a drop in pending sales. Wailea’s pendings increased modestly after a quiet January.

Some Quick Thoughts

Weird conditions persist. There is still something of a balance in this market that is sustaining prices. As established above, demand is lower, but inventory remains low too. That’s what differentiates Maui from markets on the mainland seeing more significant price decreases. That said, Maui is not monolithic. There are parts of the market where properties are going under contract quickly and others where the days on market are steadily ticking upward.

Buyers searching for vacation rental condos in beach towns like Kihei can expect properties to go under contract relatively quickly. It may not be 2021 or early 2022, but when a 2 bedroom vacation rental in a good complex hits the market, it is safe to say it won’t last more than a few days. It is hard to assess the depth of that buyer pool, but inventory is so incredibly scarce that prices continue to go up in this area due largely to scarcity.

On the other end of the spectrum, the luxury condo market is quiet. Between January 1 and the end of February, only 5 condos went under contract for more than $2,500,000. This is well below 29 during the same period of 2022. It’s worth noting, activity is below pre-Covid levels but the drop off isn’t quite as steep. Slower activity in the luxury market is a national trend. The reasons extend beyond rates.

The home market is also pretty variable. The one real difference with the condo market is that there are no segments of the market that truly feel frothy. Some new listings are going under contract relatively quickly, but it a far cry from the madness of last February.

A Little Maui Beauty to Brighten This Post

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 23	January 22	January 21	January 20	January 19	January 18
Homes	66	117	104	133	135	134
Condos	113	195	197	164	197	215

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 23	January 22	January 21	January 20	January 19	January 18
Homes	54	90	120	89	98	106
Condos	90	177	243	133	153	162

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 23	January 22	January 21	January 20	January 19	January 18
Homes	59	91	94	81	61	83
Condos	52	151	114	124	125	120

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.

	11/30/22		12/31/22		1/30/23
	Active	Pending	Active	Pending	Active	Pending
<$750,000	5	14	6	10	10 (+4)	11 (+1)
$750,000-$999,999	31	25	25	28	21 (-4)	25 (-3)
$1,000,000-$1,499,999	61	28	78	20	71 (-7)	30 (+10)
$1,500,000-$1,999,999	28	17	36	11	33 (-3)	9 (-2)
$2,000,000-$2,999,999	34	11	37	12	42 (+5)	7 (-5)
$3,000,000-$4,999,999	32	7	31	9	32 (+1)	10 (+1)
$5,000,000-$9,999,999	23	9	27	8	27	6 (-2)
$10,000,000-$19,999,999	14	0	14	0	16 (+2)	0
$20,000,000+	5	1	4	2	5 (+1)	1 (-1)
Total	233	112	258	100	257 (-1)	99 (-1)

	11/30/22		12/31/22		1/31/23
	Active	Pending	Active	Pending	Active	Pending
Haiku	29	10	29	7	26 (-3)	7
Hana	10	0	10	1	9 (-1)	1
Ka’anapali	9	2	9	3	10 (+1)	5 (+2)
Kahului	16	13	16	13	13 (-3)	11 (-2)
Kapalua	5	3	5	3	7 (+2)	1 (-2)
Kihei	31	15	39	7	32 (-7)	17 (+10)
Kula	22	12	21	10	21	11 (+1)
Lahaina	15	13	18	11	19 (+1)	9 (-2)
Makawao	11	7	35	4	31 (-4)	6 (+2)
Napili/Kahana/Hono	9	3	13	3	13	1 (-2)
Pukalani	10	3	7	3	11 (+4)	4 (+1)
Sprecks/Paia	7	3	9	1	8 (-1)	1
Wailea	16	4	13	6	16 (+3)	3 (-3)
Wailuku	32	19	25	25	30 (+5)	17 (-8)

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.

	11/30/22		12/31/22		1/30/23
	Active	Pending	Active	Pending	Active	Pending
<$250,000	1	4	2	2	1 (-1)	2
$250,000-$499,999	19	14	12	16	14 (+2)	11 (-5)
$500,000-$749,999	43	33	38	25	49 (+11)	31 (+6)
$750,000-$999,999	28	29	42	27	39 (-3)	42 (+15)
$1,000,000-$1,499,999	31	24	32	21	29 (-3)	32 (+11)
$1,500,000-$1,999,999	21	28	26	29	30 (+4)	35 (+6)
$2,000,000-$2,999,999	18	39	18	36	17 (-1)	40 (+4)
$3,000,000-$4,999,999	11	17	10	18	11 (+1)	17 (-1)
$5,000,000-$9,999,999	12	2	14	0	12 (-2)	2 (+2)
$10,000,000+	3	0	4	0	4	0
Totals	187	190	198	174	206 (+8)	212 (+38)

	11/30/22		12/31/22		1/31/23
	Active	Pending	Active	Pending	Active	Pending
Ka’aanapali	25	4	22	9	24 (+2)	12 (+3)
Kahului	5	5	4	3	3 (-1)	4 (+1)
Kapalua	14	2	12	3	13 (+1)	6 (+3)
Kihei	53	61	61	45	65 (+4)	72 (+27)
Lahaina	14	8	11	12	12 (+1)	9 (-3)
Ma’alaea	4	8	5	5	5	7 (+2)
Napili/Kahana/Hono	39	19	50	16	50	14 (-2)
Wailea/Makena	23	85	27	79	26 (-1)	81 (+2)
Wailuku	8	8	4	4	7 (+3)	6 (+2)

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.

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.

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.

By some margin, 2021 was the busiest year ever for transaction volume at the Kapalua Resort. Now that we are two-thirds of the way through 2022, we thought it might be a good time to check on market activity in this resort community located on Maui’s northwest coastline. This update looks at sales volume, pricing and more. It also looks at the outlook for the rest of the year and a slightly more long range outlook as the market slowly transitions back to “normal”.

Kapalua Home Market Numbers

The numbers below represent notable numbers for year to date home sales activity in Kapalua through September 5th, 2022.

• Maui Realtors reported 12 home sales over the last eight plus months. That is 50% of the 24 sales reported during the same period of 2021, and 25% below the 16 sales during the same period of 2019.
• Limited inventory played a pretty big role in the decreased sales volume compared to last year. While reduced demand may also be a factor, that is harder to show via the statistics.
• Two out of the twelve sales closed for over asking price. An additional four sales closed for full price meaning 50% of the transactions closed for asking price or higher. It is striking that only one of the 24 homes sold in the first eight months of 2021 sold for over asking price and only 3 more sales closed for asking price or above. Back in 2019, none of the year to date sales sold for full price let alone asking price.
• Of the twelve transactions, Realtors reported that seven of the buyers paid cash.
• The median price of the homes sold in Kapalua this year is $5,025,000. That is 25.31% higher than median of $4,010,000 for homes sold during the same period of 2021. It is 105% higher than the median sales price of $2,450,000 during the same period of 2019.
• The average price of the homes sold in Kapalua this year is $5,300,000. That compares to $4,886,354 and $2,364,000 during the same periods of 2021 and 2019 respectively. That means this year’s average is 8.47% and 124.2% higher than 2021 and 2019 respectively.
• The lowest priced home to sell for the year to date in Kapalua closed for $2,750,000. The 3 bedroom, 3.5 bathroom home in Pineapple Hill with 3,670 square feet of living space is located on a 10,703 square foot lot.
• The highest price sale for the year to date closed in August. The Pineapple Hill home has 6 bedrooms, 6.5 bathrooms and 7,784 square feet of living space on just under a half acre of land.

• Pineapple Hill tops the list for busiest subdivision for sales activity this year. Five homes closed in Pineapple Hill with two additional homes closing in Pineapple Hill Estates. Three homes closed in Plantation Estates and two homes closed in Mahana Estates. There’s been no inventory and no sales in Kapalua Place. There is one pending sale in Honolua Ridge.

Kapalua Condo Market Numbers

The numbers below are the most notable from Kapalua Condo sales through September 5th. It includes only condos in the complexes that are formerly located within the Kapalua resort and does not include condo developments that border Kapalua.

• Maui Realtors reported 51 condos sold for the year to date. That is 51.89% below the 106 sales reported through the same period of 2021. It is 15.9% more than the 44 closes during the same period of 2019.
• Again, it is pretty clear that constrained inventory played a role in the substantial decrease in sales compared to last year. It’s difficult to estimate the role decreased demand played in the lower number of sales. That said, it is worth pointing out that we had more sales this year with far less inventory than we did in 2019.
• Of the 51 sales, 12 or 23.53% sold for over asking price and 28 or 54.9% sold for asking price or above. By comparison, 3.77% and 30.19% of all 2021 sales over the same period sold for over asking price and at or above asking price respectively. Over the same period of 2019, 4.55% of all condos sold over asking with 34.09% selling for asking price or above.
• Of the 51 condos that sold thus far this year, Realtors reported that 24 out of 51 or 47.05% were cash transactions.
• The median price of the condos sold for the year to date is $1,450,000. Over the same period last year, the median was $1,145,000. That’s a 26.64% difference. The median during the same period of 2019 was $917,500. That is a 58% difference.
• The average price of condos sold in Kapalua through September 5th is $2,438,421. During the same period of 2021, the average price was 29.07% lower at $1,889,224. The difference in average between 2022 and the same period of 2019 is 15.50%. During that period, the average was $2,111,034.
• The lowest priced condo sale thus far this year in Kapalua closed for $940,000. That price bought the new owner a 1 bedroom, 2 bath with 972 square feet of living space in Kapalua Golf Villas.
• That was one of just three condo sales below $1,000,000!
• Kapalua’s highest condo sale for the year to date closed for $8,000,000 at Montage Kapalua Bay. That unit includes 3 bedrooms, 3.5 bathrooms and 2,904 square feet of living space.

• Kapalua Golf Villas was the busiest condo complex for transactions with 17 total sales. Montage and Kapalua Bay Villas came next with 9 sales each.

Outlook for the Rest of The Year in Kapalua

It’s time to get out the old crystal ball to see what we might expect in terms of sales activity in Kapalua for the rest of the year. Ok, ok maybe we will skip the crystal ball and try to use some other metrics that might give us some sense of market activity. When trying to gauge current market conditions, I like to look at demand for new listings and inventory.

Last month, five new condo listings came to market and one home came to market. Of the five condo listings, two were under contract in less than 10 days. That would appear to suggest that there is still some demand in the condo market. While overall demand on island might be feeling a crunch from interest rates, Kapalua is less likely to be rate sensitive. Keep in mind that just under 60% of this year’s home sales and just under 50% of this year’s condo sales in Kapalua were cash transactions.

The current inventory of listings remains limited. There are only 11 active condo listings in Kapalua and 4 pending sales as of September 5th. When you break it down by condo complex. There are no active listings in the Ironwoods or Coconut Grove. Both Kapalua Ridge and Kapalua Golf Villas have one active listing each and the Bay Villas has two listings. Only the Ritz Carlton Residences with three listings and Montage with four listings have any significant depth of inventory. On the home front, there are just five active home listings with one pending home sale.

One last factor to consider is seasonality. The charts below shows Kapalua home and condo pending sales by month in 2022, 2021, 2019 and 2018. In all of those years, the last four months of the year tend to see fewer properties going under contract.

Based on the inventory, demand and past seasonality, I would expect that sales activity for the rest of the year will be quieter than the first eight months. That said, I would venture there should be some demand for the limited inventory particularly in the the lower price points of the condo market.

Longer Term Kapalua Outlook

I mentioned at the start of the Kapalua discussion, that Kapalua was one of the markets that saw the greatest increases in demand over the last couple of years. That comes after a decade where Kapalua saw lesser demand than other resort markets. While Kapalua has always had its share of loyal fans, it tended to be a slower market. Days on market were longer and sales volume was lower. That started to shift a little at the end of the decade and it changed completely with Covid. As the market slowly moves toward normal, what does “normal” actually look like?

Maui Prep helped fuel part of Kapalua’s Covid period boom. The school was able to scale up enrollment to accommodate a large number of affluent families who took advantage of the work from anywhere movement. Many of those families ended up buying homes in Kapalua or other nearby areas of West Maui. The question of how much ongoing demand there will be from affluent remote workers remains something of an unknown.

I recently had the opportunity to pose the question about the future of the Kapalua market to an agent who lives and works in the community. I thought her answer offered some interesting insights. While Maui Prep came up, she also discussed the role of the Montage and the Ritz. She pointed out that the closure of the Kapalua Bay Hotel in 2006 and construction projects at the Ritz limited places to stay and the overall appeal of the area during the latter half of the 2000s. The foreclosure on the Ritz Carlton Club in 2013 didn’t help. When the Ritz Carlton Club redeveloped and rebranded as the Montage in 2014, it brought in new vacationers. Many of them developed loyalty to Kapalua and eventually became second home owners.

With those two anchor properties, the other agent thought this would provide a solid foundation for future demand in the community. For this and other reasons, she is very much a Kapalua Bull over the long term. It was an interesting answer and one I thought might be worth sharing with our readers.

Contact The Maui Real Estate Team

We will continue to provide periodic updates on the Kapalua market on this blog. If you are interested in Kapalua Properties, you can find the current inventory of Kapalua Homes for Sale and Kapalua Condos for Sale on MauiRealEstate.com. Contact The Maui Real Estate Team if you have questions on any of the listings or need assistance buying or selling a property in Kapalua.

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

	6/30/22		7/31/22		8/31/22
	Active	Pending	Active	Pending	Active	Pending
<$750,000	6	16	11	14	11	11 (-3)
$750,000-$999,999	32	63	25	62	31 (+6)	44 (-18)
$1,000,000-$1,499,999	43	37	65	34	58 (-7)	28 (-6)
$1,500,000-$1,999,999	44	22	41	19	46 (+5)	13 (-6)
$2,000,000-$2,999,999	34	15	31	19	36 (+5)	12 (-7)
$3,000,000-$4.999,999	27	10	25	9	32 (+7)	11 (+2)
$5,000,000-$9,999,999	23	8	24	7	26 (+2)	5 (-2)
$10,000,000-$19,999,999	13	0	12	0	11 (-1)	0
$20,000,000+	4	1	5	1	5	0
Totals	241	169	239	156	256 (+17)	124 (-32)

	6/30/22		7/31/22		8/31/22
	Active	Pending	Active	Pending	Active	Pending
Haiku	20	13	22	11	20 (-2)	7 (-4)
Hana	4	2	4	1	8 (+4)	2 (+1)
Ka’anapali	11	7	10	7	10	4 (-3)
Kahului	8	27	13	21	11 (-2)	25 (+4)
Kapalua	5	3	5	1	4 (-1)	1
Kihei	45	22	48	14	44 (-4)	16 (+2)
Kula	25	13	19	16	24 (+4)	10 (-6)
Lahaina	20	18	18	14	23 (+5)	7 (-7)
Makawao	13	12	14	9	15 (+1)	11 (+2)
Napili/Kahana/Hono…	12	3	10	6	14 (+4)	4 (-2)
Pukalani	12	7	7	6	8 (+1)	5 (-1)
Spreckelsville/Paia	11	2	10	2	15 (+5)	3 (+1)
Wailea/Makena	13	4	15	5	16 (+1)	4 (-1)
Wailuku	39	33	39	35	41 (+2)	22 (-13)

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

	6/30/22		7/31/222		8/31/22
	Active	Pending	Active	Pending	Active	Pending
<$250,000	2	8	1	8	1	6 (-2)
$250,000-$499,999	19	25	11	23	14 (+3)	17 (-6)
$500,000-$749,999	31	40	43	39	34 (-9)	43 (+4)
$750,000-$999,999	44	46	44	43	33 (-11)	43
$1,000,000-$1,499,999	29	30	30	31	29 (-1)	31
$1,500,000-$1,999,999	28	34	30	33	24 (-6)	35 (+2)
$2,000,000-$2,999,999	20	36	20	36	22 (+2)	38 (+2)
$3,000,000-$4,999,999	11	25	12	18	12	19 (+1)
$5,000,000-$9,999,999	11	3	10	3	8 (-2)	1 (-2)
$10,000,000+	3	0	4	0	4	0
Totals	199	247	205	234	181 (-24)	233 (-1)

	6/30/2022		7/31/2022		8/31/2022
	Active	Pending	Active	Pending	Active	Pending
Ka’anapali	23	15	24	13	25 (+1)	16 (+3)
Kahului	4	3	2	8	3 (+1)	7 (-1)
Kapalua	12	9	10	10	11 (+1)	6 (-4)
Kihei	55	74	67	60	50 (-17)	63 (+3)
Lahaina	16	5	16	8	9 (-7)	10 (+2)
Ma’alaea	5	5	5	6	3 (-2)	6
Napili/Kahana/Hono	48	34	40	34	45 (+5)	25 (-9)
Wailea	23	85	25	82	24 (-1)	86 (+4)
Wailuku	12	12	14	13	9 (-5)	14 (+1)

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

Maui no ka oi! pic.twitter.com/qZxQF64MWF

— Maui Hawaii (@Maui) August 28, 2022

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.

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.

We recently posted on a surge in activity in the South Maui Vacation Rental Market. Wailea and Kihei both saw a big increase in condo sales for the year to date. West Maui is home to the other big concentration of vacation rental condos on island. The West side has not been the best side for sales this year. Condo activity is off compared to 2016. This post takes a look at sales activity in the different areas of West Maui, looks at a few condos that have seen stronger activity and takes a look at a couple of factors that could be driving the slower sales on this side of the island.

As of June 7th, there have been 145 vacation rental condos sold in West Maui this year. As of the same time last year, there were 176 vacation rental condos that sold in West Maui. That is an 18% reduction in sales volume. I broke down the sales by price ranges to try to see if the decrease in activity occurred across the board. Condo sales $500,000 and under were down 22%. There were 57 sales this year as compared to 73 last year in this price range. The middle part of the market between $500,001 and $1,000,000 performed the strongest of any market segment with a modest increase of 4.6% over last year. There were 67 sales compared to 64 over the same period of 2016. The high end of the West Maui vacation rental market saw the steepest decline in activity of any market segment. Sales were down 51% for vacation rental condos priced from $1,000,001 on up. There were 23 sales compared to 45 sales over the same period of 2016.

Lahaina Condos
The Lahaina condo market was the one area of West Maui that saw an increase in activity compared to last year. Lahaina has a small number of vacation rental condo complexes with four total properties. Those four complexes saw activity increase by 35% for the year as of June 7, 2017. It was a good five plus months of sales in Lahaina, but one condo stood out above the others.

Aina Nalu
Aina Nalu is located one block off of Front Street in historic Lahaina Town. There are 190 units at the complex spread over 11 buildings on 18 acres. There are studio, one bedroom and two bedroom floor plans. Prices range from the $300,000s for one bedrooms to the low $400,000s for two bedrooms. Owners value the grounds, the two nice pools, the tropical design elements and the location. If you were so inclined, this is a place where you could stay without driving your car with Front Street so close by. The property had 5 sales through just over five months of 2016. As of June 7th, there were 12 sales in Aina Nalu. That is an impressive 240% increase in sales activity.

Ka’anapali Condos
As you head North from Lahaina, the Ka’anapali condo market has seen a dip in condo sales activity for the first five months of the year compared to the same period of 2016. Sales slipped from 63 sales to start 2016 to 42 sales as of June 7, 2017. That is a 33% decrease in activity. The decrease in sales was almost across the board with only Ka’anapali Royal registering more sales this year than last year with 4 sales compared to 2. While I typically focus on the condos that stand out among the crowd for higher sales activity, I wanted to take a look at the condo complex that saw the biggest dip in activity.

Honua Kai
Honua Kai is the last fee simple whole ownership condo to be built in the Ka’anapali Area. It has 711 units spread over two seven story towers on 40 acres. The Hoku Lani tower was completed in 2009 and the Konea tower was completed in 2010. Honua Kai has extensive amenities including three separate pools and an onsite restaurant, grocery store and spa. It has studio, one bedroom, two bedroom and three bedroom condominiums. Prices range from the high 600s for a select few mountain view one bedrooms up to over $5,000,000 for the best located three bedroom units. People who own at Honua Kai appreciate the significant amenities, the beachfront location, the newness of the location and the rental demand.

Honua Kai has had a big impact on the West Maui Condo market since 2005 when they started taking the first round of pre-construction reservations. Those reservations generated a significant number of sales during the doldrums of the post crash real estate market. This goosed the condo sales numbers when overall demand was low. I dubbed this distortion of the statistics The Honua Kai Effect.

June of 2016 was the last new developer sale at Honua Kai. There were 15 new developer sales between January 1, 2016 and June 7, 2016. That gives some context before I provide this year’s sales numbers. There were 14 Honua Kai Sales for the year as of June 7th. Last year, there were 32 over that same period of time. That is a 54% drop in sales volume. The new developer sales account for most, but not all of the difference between this year and last year’s sales volume.

Honua Kai remains a popular choice for West Maui condo buyers. While we saw a big dip in activity, it still saw more sales than any other West Maui condo.

Napili, Kahana, Honokowai
The three communities located between Ka’anapali and Kapalua offer the greatest concentration of oceanfront condos in West Maui. It was another area that has seen a decrease in activity in 2017. There were 57 sales in this area five months and a week in to 2017. That is down 22% from the 73 sales through the same period of 2016. The bulk of the condo complexes in this area saw a decrease in activity with a few exceptions.

Papakea
Papakea is an oceanfront complex in the Honokowai area. It has 364 condos spread over 11 buildings on just over 12 acres. There are studio, one bedroom and two bedroom floor plans. This complex is predominantly fee simple, but there are some leasehold units. Papakea has a pretty broad range of prices. Leasehold one bedrooms start right around $200,000. The most expensive units are direct oceanfront two bedroom units. They sell for as much as $1,000,000. Owners like the oceanfront location, amenities and relaxed feel. Papakea had a pretty good start to 2016 with 10 sales in just over five months. This year was 40% better with 14 sales in the same period of time.

Kapalua
While most of West Maui was either markedly stronger or weaker this year compared to last year, Kapalua has been pretty steady with the same number of sales this year as last year. There were 14 vacation rental condos sold this year as of June 7th, compared to 14 over the same period last year. While the overall numbers were the same, there were some shifts in activity among the five complexes that allow vacation rentals. I wanted to highlight the one condo that saw the biggest increase in activity and the highest number of sales overall.

Kapalua Golf Villas
Kapalua Golf Villas is situated along the beautiful Kapalua Bay Course. There are 186 units spread over 16 buildings on 15.8 acres. Amenities include three pools. The property went through extensive renovations in 2014. Prices range from the high $500,000s for one bedrooms lower on the golf course to just under a million for fully upgraded two bedrooms with good ocean views. Views, finishing and floor plans are the primary drivers on price. Kapalua Golf Villas offer the lowest priced entry point into the Kapalua Real Estate market. Owners appreciate the location on the Bay course, the views and the proximity to Kapalua Beaches and to other resort amenities.

Kapalua Golf Villas has been the busiest of the Kapalua condos in 2017. There have been 7 units sold as June 7th. There were 4 sold over the same period last year. That is a 75% increase in sales activity.

What’s Driving the West Maui Market
South Maui vacation rental condos have been booming this year while West Maui has been slower. They are two seemingly similar markets. What is driving the difference in market behavior? I was able to give some pretty good reasons as to why I think the South Maui market has surged to start the year. Determining what might be holding things back in West Maui is a little more challenging. The one clear cut cause was already discussed. Honua Kai is seeing less activity now that it is just resales and there are no more new developer listings.

Are there any other factors keeping down West Maui sales numbers? The state of Kahana Bay may be impacting sales. This section of West Maui coastline has significant erosion issues. Hololani has been struggling with erosion issues for a number of years. Those issues expanded down the coast last year. Royal Kahana and Valley Isle Resort had to put up emergency sandbags during the winter of 2016 to halt a rapid loss of shoreline. There are now nine condo associations that are a part of efforts to develop a shoreline replenishment plan. With the cost of beach replenishment expected to approach ten million dollars, the individual owners in those nine complexes are facing a big assessment to pay for the project. While the numbers of condos sold in the nine complexes this year is pretty similar to what we saw last year, the uncertainty over this coastline and the potential future costs may be limiting the potential for growth in this market.

The one other factor that could be at play is plain old variability. We see that in the market from time to time. Some years West Maui has stronger years for sales activity and some years it is South Maui that has a big year. The underlying reasons aren’t so clear cut. This may be just one of those years for West Maui. When you add in the other factors previously mentioned, those three things in and of itself could account for the 18% drop we have seen. If you are a close follower of the West Maui market and you have any other theories, we would welcome your input in the comments below.

The good news for potential buyers is that there is still a lot of inventory in this market. This is particularly the case with condos priced from $500,000 and up. You can search through the current inventory of Kapalua Condos for Sale and Ka’anapali Condos for sale on MauiRealEstate.com. You can also search the MLS for condos listed in Lahaina, Napili, Kahana and Honokowai. Contact The Maui Real Estate Team if you want to talk to a real estate agent about West Maui Vacation Rental Condos. We would welcome the chance to learn more about what you are looking for and to assist you in your search for a condo that will fit your needs.