Maui Real Estate Blog

July 2016 Maui Real Estate Statistics

Why is the Maui condo market showing signs of improvement in 2016? That is one of the questions, I asked myself in this post and did my best to answer by taking a deeper dig into this year’s condo sales. You will find all of those thoughts and a rundown on the overall July 2016 Maui Real Estate Stats. Without further ado, here are the July numbers and some thoughts and context on the market.

July 2016 Median Prices and Sales Volumes

There were 93 home sales with a median price of $600,000. In July of 2015, there were 129 sales with a median price of $590,000. That is a 28% decrease in volume and approximately a 2% increase in median price.

There were 110 condos sold for a median price of $440,000. Last July, there were 94 sales with a median sales price of $394,000. That is a 17% increase in median price and a 12% increase in median price.

There were 7 land sales with a median price of $490,000. There were 13 sales in July of 2015 with a median price of $250,000. This is a 46% decrease in volume and a 96% increase in median price.

Notable Numbers from the July Real Estate Sales Activity
While compiling the sales volumes and median prices, I came across some other noteworthy numbers.

  • The highest priced home sale in July closed for $18,000,000. The Beachfront Oli Oli Kai Property on Stable Road in Spreckelsville closed for a new North Shore record. That said, it could of or maybe should have been classified as three separate sales. The property was condominiumized into three separate units. The three units included a total of three homes and approximately 3.6 acres.
  • This was one of 7 home sales over $2,000,000. The six other sales included three properties in Lahaina and one sale each in Wailea, Kula and Ka’anapali.
  • The highest priced condo sale closed for $3,850,000. The 3 bed, 3.5 bath unit at Montage Kapalua has 2,789 square feet of living space.
  • That was one of 10 sales over $1,500,000 to close in July. The other sales included 2 closes at Ho’olei and one each at Ka’anapali Ali’i, Sugar Cove, Wailea Elua, Makena Surf, Honua Kai, The Whaler and The Palms at Manele.
  • The high land sale for the month closed for $1,800,000. The four acre lot is located in Kapalua Plantation Estates. There was one other $1,000,000 plus land sale this month. That 17.47 acre lot is located in the Makila Ranch Area of Launiupoko.
  • There were 13 bank owned properties that closed in July. That is down from the 20 that closed in July of 2015. There was only one successful short sale completed last month compared to the 8 completed in July of 2015.

New July Pending Sales Contracts
We track the number of properties that go pending in a particular month. It gives us a more recent data point on buyer demand and it also helps us to better suss out whether the prior month’s sales activity is something of a one off event or part of a broader trend. I will spell that out a little better as we review last month’s pending data.

Looking at the pending sales activity, the number of homes that went under contract in July was down compared to last year. The number of condos that went under contract was the same as last year and land pending sales were up ever so slightly. The decrease in home sales is part of what appears to be a continuing trend that we have seen over the last few months. Shrinking home inventory, particularly at lower price points, has led to a reduction in sales activity. The condo market appears to be continuing a recent trend of sales at or above last year’s totals. I will delve into that in more detail below. While land sales aren’t exactly booming, it was good to see that they were up slightly from last year. That would suggest that the low July land sales numbers were more of an outlier than the start of any sort of trend.

Thoughts on the Market
We have discussed the decreases in home sales volumes over the last few posts, but I haven’t talked a whole lot about the increase in condo sales activity. Of the 7 months of sales this year, one month had the same sales volume as the same month from 2015, and one month was down from the same month last year. Five of the months have experienced greater sales volume than the same month of 2015. The last four months have all seen an increase over the same month of 2015. Over that period from April-July, sales volumes are up 14% compared to the same period of 2015. That raised the question of why we may be seeing an increase in activity. I dug into the sales data a few different ways to try to see if I could come to any conclusions as to what is driving the increase in sales activity.

The first thing I did was break down the sales volume over the last four months by price point.

I can’t say that this breakdown provided me with a clear picture of the driving force behind price increases. We can see an increase in sales below $300,000 and an increase in the $1,500,000 and higher range. The middle price ranges tend to be a mixed bag. The biggest increase in activity of any price range occurred between $500,000-$749,999. I can’t say off the top of my head why that would have occurred. The middle of the market, so to speak, also included the only two price points where sales were down compared to last year. The remaining price ranges saw relatively limited increases over 2016.

Not feeling like I had a clear answer, I took a look at two other data points. The first data point is is whether or not the property allows short term rentals. This data is somewhat flawed as it is not a mandatory field in our multiple listing service. In other words, not every condo sale that occurred over the last month reported whether or not the condo allowed vacation rentals.

It is pretty clear that there was an increase in sales for properties that are reported to be vacation rentals. I calculated a 26% increase over the period between April 1, 2015 and July 31, 2015. It was interesting to note that the increase in vacation rental condo sales was particularly evident in the $500,000-$749,999 price range. That appears to point to a significant driver for sales activity in that price range.

The one other data point I wanted to look at was new developer sales. New developments can be market drivers that boost the overall sales activity. In some cases, the boost can mask other market trends. An example of this is when Honua Kai started to close a lot of condos while we were still in the thick of the downturn. Overall condo demand was low, but sales numbers were relatively high as buyers were closing on contracts that were originally written pre-construction during the peak of the real estate boom. From what I could glean, we haven’t seen a similar phenomenon over the last four months. There was an uptick in new development sales. I counted 29 new development sales from April 1, 2016-July 31, 2016. That is up from 23 sales during that same period last year. However, the vast majority of these contracts were written recently.

While I can’t say I have definitive answers on what is driving the recent uptick in condo sales, the data above points to three price ranges where the improvement was most prevalent and a type of condo that saw more activity. Based on anecdotal evidence and the quantitative evidence, I am going to postulate a few reasons for the increases in each of these segments. The increase in sales at the low end is a reflection of the continued strength of the buy over renting argument on Maui. Maui rental rates have soared. Low borrowing costs make owning a number of Maui condo less expensive than renting. As long as rents remain high and rates remain low and inventory is sufficient, that part of the market should continue to be busy. I can’t say definitively why the high end market is outperforming last year in terms of sales. When I look at the luxury home market, sales totals between 2015 and 2016 have been almost identical. It just seems as if high end buyers are gravitating more towards condos this year. I believe the increase in vacation rental condo sales, and in the $500,000-$749,999 range in particular, is a reflection of pretty strong consumer confidence among some mainland buyers. West Coast real estate markets have been strong and the stock market has performed well. This means more cash for discretionary purchases like a vacation rental condo on Maui.

A Few Closing Thoughts for Maui Buyers and Sellers
I think there are some things to be learned for the overall Maui market from my review of the condo numbers. The biggest is that there is variability in the strength of the market by price point. I think you can also add geographic variability as another factor. Not all communities are seeing equal levels of buyer demand. While these stats tend to paint the market in broad brushes, how buyers and sellers approach the Maui market is going to be a reflection of their specific segment of the market. Contact The Maui Real Estate Team if you are interested in buying or selling a property on Maui. We would welcome the chance to hear about your needs and to discuss market conditions that are most relevant to you.

Pete Jalbert

Maui Real Estate Blog

Unofficial October 2012 Maui Real Estate Statistics Part I

October came and went quickly on Maui. It was an eventful month on the island with beautiful weather, big waves, a tsunami scare and the rollicking antics of Halloween on Front Street in Lahaina. It also happened to be an eventful month for the Maui Real Estate Market. Typically, October is slow season for the Maui market. It is one of our quietest months for visitors. Fewer visitors mean fewer potential real estate buyers. It is usually a good time for Realtors to stretch their legs a little before the start of peak buying season in late December. That is a far cry from what we have experienced this October. The Maui Real Estate Team has been running all over the island showing properties. Listings that were previously quiet are getting showings and offers. It feels like there has been a shift in the market. Based on the above, I am going to do something a little different for this month’s unofficial Maui Real Estate Statistics. In addition to the usual data on properties that have sold, I wanted to take a look at some of the buyer activity in October for properties that may not have closed yet. There was actually enough data to support two blog posts. This first post looks at sales volumes, medians and a few other numbers that caught our eyes among the October sales. The second part of the stats will take a look at current market activity and our overall thoughts on the market. Without further ado, here is part I.

A Comparison of Maui Real Estate Sales Volume during October 2011 and October 2012

By my count, there were 95 homes sold during October with a median price of $489,000. Last October, there were 74 homes sold at a median price of $482,500. That translates to a 28% increase in volume and a 1% increase in median price when comparing this October to last.

Thus far, there have been 94 condos reported sold in Maui County this October with a median sales price of $482,500. By comparison, there were 77 condos sold with a median price of $351,495 in October 2011. That means we saw a 22% increase in sales volume and a 37% increase in median price compared to last October.

Land sales remained slow on island last month with only 7 sales reported with a median sales price of $345,000. This was slightly lower than October 2011 activity when 8 sales were reported at a median price of $465,000.

Looking through the stats, I came across a number of other numbers that I thought were worthy of sharing.

  • There were 16 bank owned properties sold last month. Most of those were single family homes. By comparison, there were 40 bank owned properties that closed in October of 2011. That is a 60% drop in bank owned transactions. Limited bank owned inventory means that we will continue to see fewer bank owned sales.
  • October was the busiest month for single family housing sales of 2012. It was the slowest month of the year for land sales.
  • There were 25 short sale transactions that closed in October. There were 33 short sale transactions that closed last October.
  • The highest sale for a home this month was $3,142,730 for a 5,126 square foot home on 2.35 acres in the Plantation Estates area of Kapalua.
  • That was one of three sales in Plantation Estates. That’s a pretty healthy number of sales considering there were only 19 sales in the subdivision dating back to 2003. Also of note, those are three of the four lowest sales prices for the subdivision. It appears that value is driving volume in this luxury community.
  • Overall Luxury sales were slower this month. The three home sales over $2,000,000 was below the seven sales over $2,000,000 last October. There was only one sale of $1,500,000 in the luxury condo market. By comparison, there were five over $1,500,000 during October of 2011.

There are several notable details worth discussing in this month’s numbers. I want to start with the luxury numbers before moving on to some bigger picture numbers. On the luxury real estate front, we saw slower activity for home and condo sales this month. The lower luxury sales volume reflects the continuation of a trend in the Maui luxury property market over the course of 2012. For the year, there have been 35 homes sold over $2,000,000. That compares to 44 sold last year over $2,000,000 for the same period. That is roughly a 20% dip in activity. For the Maui luxury condo market, there have been 31 condos sold year to date over $1,500,000. That compares to 60 sold during the January through October 2011 period. That represents a 48% dip in activity. While the overall Maui market appears to be trending up, the luxury market is lagging. I think the properties that were sold in October were representative of a recurring theme among this year’s luxury buyers. The Kapalua Plantation Estates sales were all luxury values. While there are still some luxury buyers willing to pay a premium, many are still seeking value above all else.

As with last month, there was a decrease in the number of Bank Owned or REO properties that sold compared to what we were seeing in 2011. We wrote last month about how the pipeline of REO properties has been decreasing on Maui. For all of October, there were only 13 new bank owned listings coming on the market. That was the lowest total to come on the market as of yet. We spoke with two agents who list a lot of the REO properties and both indicated that their pipelines were looking pretty dry for the foreseeable future. While it was surmised that the shadow inventory may provide us some relief on the inventory crunch, that just doesn’t seem to be the case right now. It appears as though many of the properties that are in the foreclosure pipeline are in some sort of legal limbo.

The decrease in bank owned inventory has been part of a general decrease in inventory. In my unofficial September statistics, we documented a decrease in sales activity. I offered the theory that the decrease in sales was driven in part by the lack of inventory. Based on our own anecdotal evidence and discussions with other Realtors, there are quite a few buyers looking who haven’t been able to find properties or are coming up short in bidding wars.

So what happened this month? One of the most notable numbers from the October stats is that home sales were higher than any other month of the year. While condo sales weren’t as notable, they still showed quite a spike over the September numbers. What caused the bump? Was I wrong on my theory that buyers not finding what they want was keeping sales numbers down? Has there been a bump in inventory that helped quench some of the buyer demand? What’s happening with the market? Read Part II of our Unofficial October Maui Real Estate Statistics.

Pete Jalbert

Maui Real Estate Blog

Kapalua Plantation Estates Sunset

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 Contact The Maui Real Estate Team for additional information on the Kapalua Real Estate market.

Pete Jalbert