Tag: Kula Homes
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
Questions, Comments, Need Help Buying or Selling?
Well, we made it to our twentieth Market Musings. This post took me a while to put together. I want to say it’s because it is chock full of tremendous insight. The truth is my last 9-10 days consisted primarily of battling Covid. My symptoms made writing this post a protracted slog. Give me some grace if there are typos and/or a few not so coherent thoughts interspersed throughout the text.
In our last post, I talked about the relative resilience of the Maui market under higher rates. Since that time, rates rose even more. The additional bump in rates or perhaps just a longer duration of time with higher rates is weighing on the Maui market. The single family home market in particular is feeling the burden of higher rates and decreased affordability. Musings 20 takes a look at some of the current market indicators including active and pending inventory, price reductions and how quickly new listings are going under contract.
End of October Maui Single Family Home Inventory
| 8/31/22 | 9/31/22 | 10/31/22 | ||||
| Active | Pending | Active | Pending | Active | Pending | |
| <$750,000 | 11 | 11 | 7 | 14 | 9 (+1) | 15 (+1) |
| $750,000-$999,999 | 31 | 44 | 21 | 46 | 29 (+8) | 29 (-15) |
| $1,000,000-$1,499,999 | 58 | 28 | 45 | 33 | 64 (+19) | 28 (-5) |
| $1,500,000-$1,999,999 | 46 | 13 | 44 | 17 | 41 (-3) | 13 (-4) |
| $2,000,000-$2,999,999 | 36 | 12 | 33 | 12 | 35 (+2) | 10 (-2) |
| $3,000,000-$4,999,999 | 32 | 11 | 35 | 11 | 32 (-3) | 7 (-4) |
| $5,000,000-$9,999,999 | 26 | 5 | 27 | 6 | 26 (-1) | 5 (-1) |
| $10,000,000-$19,999,999 | 11 | 0 | 11 | 0 | 9 (-2) | 0 |
| $20,000,000+ | 5 | 0 | 2 | 1 | 3 (+1) | 1 |
| Totals | 256 | 124 | 225 | 140 | 248 (+23) | 108 (-32) |
| 8/31/22 | 9/30/22 | 10/31/22 | ||||
| Haiku | 20 | 7 | 24 | 7 | 28(+4) | 9 (+2) |
| Hana | 8 | 2 | 9 | 1 | 10 (+1) | 0 (-1) |
| Ka’anapali | 10 | 4 | 10 | 3 | 7 (-3) | 2 (-1) |
| Kahului | 11 | 25 | 7 | 26 | 16 (+9) | 16 (-10) |
| Kapalua | 4 | 1 | 4 | 0 | 6 (+2) | 0 |
| Kihei | 44 | 16 | 35 | 16 | 40 (+5) | 11 (-5) |
| Kula | 24 | 10 | 22 | 11 | 20 (-2) | 11 |
| Lahaina | 23 | 7 | 21 | 10 | 22 (+1) | 13 (+3) |
| Makawao | 15 | 11 | 13 | 11 | 13 | 9(-2) |
| Napili/Kahana/Hono… | 14 | 4 | 9 | 7 | 11 (+2) | 6 (-1) |
| Pukalani | 8 | 5 | 6 | 7 | 8 (+2) | 3 (-4) |
| Spreckelsville/Paia | 15 | 3 | 10 | 4 | 8 (-2) | 2 (-2) |
| Wailea/Makena | 16 | 4 | 10 | 8 | 11 (+1) | 4 (-4) |
| Wailuku | 41 | 22 | 36 | 26 | 40 (+4) | 21 (-5) |
End of October Home Inventory Review
The information above is provided with the usual framework. The home inventory data by price point includes all of the island of Maui, but excludes the islands of Molokai and Lanai. The district information is limited to the districts and community with the most activity.
- After a pretty healthy drop in Inventory in September, active home listings increased by 10.22% by the end of October.
- The bulk of the inventory increased occurred between $750,00 and $1,500,000 with an increase of 27 listings in that range.
- It appears that this increase in inventory stems more from slower activity than an influx of new listings. That is reflected in the pending sales data with 20 fewer pending home sales between $750,000 and $1,500,000.
- This make sense as this is an area of the market where a higher percentage of buyers are using financing. Looking at all of the sales between August 1 and October 30th, 18.93% of the buyers in this price range paid cash. In all other price ranges, 41.77% of buyers used cash. Plain and simple, the increase in mortgage rates is hitting this segment of the market harder.
- Overall, the number of pending home sales decreased 22.86% between the end of September and the end of October. That is a substantial decrease, but worth noting that pending sales typically decline in the fall.
- Looking at the market on a community level, all but three districts increased inventory. The exceptions being Kula, Spreckelsville/Paia and Ka’anapali. Ka’anapali’s decrease stemmed in part due to cancelled listings rather than increased sales.
- Kahului experienced the biggest increase in active listings and the biggest decrease in pending sales. With the vast majority of the inventory in this community priced between $750,000 and $1,300,000, this is a market where the increased rates appear to causing a bigger shift in conditions.
End of October Condo Inventory
| 8/31/22 | 9/30/22 | 10/31/22 | ||||
| Active | Pending | Active | Pending | Active | Pending | |
| <$250,000 | 1 | 6 | 1 | 3 | 2 (+1) | 4 (+1) |
| $250,000-$499,999 | 14 | 17 | 11 | 16 | 19 (+8) | 12 (-4) |
| $500,000-$749,999 | 34 | 43 | 28 | 40 | 32 (+4) | 35 (-5) |
| $750,000-$999,999 | 33 | 43 | 33 | 33 | 27 (-6) | 27 (-6) |
| $1,000,000-$1,499,999 | 29 | 31 | 19 | 36 | 21 (+2) | 30 (-6) |
| $1,500,000-$1,999,999 | 24 | 35 | 18 | 34 | 14 (-4) | 33 (-1) |
| $2,000,000-$2,999,999 | 22 | 38 | 14 | 43 | 15 (+1) | 40 (-3) |
| $3,000,000-$4,999,999 | 12 | 19 | 10 | 17 | 10 | 17 |
| $5,000,000-$9,999,999 | 8 | 1 | 7 | 0 | 11 (+4) | 1 (+1) |
| $10,000,000+ | 4 | 0 | 4 | 0 | 3 (-1) | 1 (+1) |
| Total | 181 | 233 | 145 | 222 | 154 (+9) | 200 (-22) |
| 8/31/22 | 9/30/22 | 10/31/22 | ||||
| Active | Pending | Active | Pending | Active | Pending | |
| Ka’anapali | 25 | 16 | 17 | 14 | 18 (+1) | 9 (-5) |
| Kahului | 3 | 7 | 3 | 4 | 5 (+2) | 5 (+1) |
| Kapalua | 11 | 6 | 10 | 4 | 12 (+2) | 4 |
| Kihei | 50 | 63 | 48 | 61 | 43 (-5) | 60 (-1) |
| Lahaina | 9 | 10 | 5 | 7 | 8 (+3) | 4 (-3) |
| Ma’alaea | 3 | 6 | 4 | 4 | 3 (-1) | 6 (+2) |
| Napili/Kahana/Hono… | 45 | 25 | 29 | 30 | 33 (+4) | 17 (-13) |
| Wailea | 24 | 86 | 19 | 86 | 19 | 85 (-1) |
| Wailuku | 9 | 14 | 8 | 12 | 11 (+3) | 10 (-2) |
End of October Condo Inventory Review
Again, the tables above come with the usual framework for our end of month inventory. The table by price point includes all condos on Maui, but it does not include condos on the islands of Molokai or Lanai. The table with districts is limited to the communities with the most activity.
Pending sales at La’i Loa at Wailea Hills skew the data in Wailea and the $1,500,000-$5,000,000 price ranges. There are 75 pending sales in that development based on contracts penned in 2020 and the first quarter of 2021. Pending sales in La’i Loa won’t start to close until sometime in 2023. Paradise Ridge Estates in Kihei also skews the data albeit to a lesser extent. There are 18 pending sales with that development based on contracts penned between 2018 and the first quarter of 2022. Overall, 46.5% of the pending Condo inventory is in La’i Loa or Paradise Ridge Estates.
- After three straight months of decreased inventory, condo inventory increased by a modest 6.2%
- The largest increase in inventory occurred in the $250,000 to $499,999 price range. While this price range has a lower percentage of cash buyers than the overall condo market, the difference isn’t all that substantial.
- Active inventory increased in 6 out of 10 price ranges, decreased in three and stayed the same in one.
- Pending sales decreased 9.91% this month. As with home sales, it isn’t too uncommon to see pending sales decrease this time of year.
- The decrease in pending condo sales by price point was fairly consistent through most ranges, with the exceptions being the very lowest price range and the very highest price points in the market.
- At the community level, modest increases in inventory were common across the board. The two districts that actually saw a decrease in inventory at the community level were Ma’alaea and Kihei. Both are markets with a lot of vacation rentals. This is a market segment that is still seeing decent demand.
- Napili, Kahana and Honokowai experienced the biggest drop in pending sales. This is another big vacation rental condo market. Is the difference in activity levels a case of no clear narrative or just variability? This is something to watch with next month’s numbers.
How Quickly Are Properties Going Under Contract
One other metric we use on the blog to track market demand is how quickly properties are going under contract. Specifically, what percentage of new listings are going under contract in ten days or less. The very first time we started documenting this metric was back in February. At that point, 56% of all new listings went under contract within 10 days or less. Between September 12th and 19th, that number shrank to 34%. Between October 11th-18th, the number of properties that went under contract within 10 days or less fell further to 25.58%.
When you break it down by homes and condos, you can see that condos continue to show some measure of resilience. For condos listed between October 11th and 18th, 40% went under contract with buyers in ten days or less. That’s actually up from mid September when the number was 36.66%. For additional context, 66.67% of condos went under contract in 10 days or less between October 11th and 18th, 2021. Going back to 2019, 26% of all condos listed between October 11th and 18th went under contract in 10 days or less.
The numbers for the home market point to a more pronounced cooling. Only 13.04% of all homes listed between October 11th and 18th went under contract in 10 days or less. In mid-September, that number was 32.14%. For additional context, 54.17% of homes listed between October 11th and October 18th, 2021 went under contract in tend days or less. Going back to 2019, 9.09% of all homes listed between October 11th and October 18th, went under contract in ten days or less.
Price Reductions
One market indicator that surprised this month is the number of active listings with price reductions. Nationally, price reductions continue to rise as the real estate market slows under the weight of higher interest rates. Based on the numbers above, one might expect to see more price reductions, particularly with the home market. With fewer properties going under contract quickly and fewer properties going under contract in general, shouldn’t sellers be adjusting to the market?
As of the the 31st, 90 of 248 active home listings or 39.92% reduced their price one or more times. On September 29th, 42.41% of homes went under contract in 10 days or less. On September 2nd, 42.97% of all active listings had one or more price reduction.
On the condo front, 45 of 153 or 29.41% of active condo listings on October 31, 2022 reduced their price one or more times. That’s up from 25% on September 29th. On September 2nd, 27.84% of all active condo listings had price reductions.
Some General Thoughts on the Numbers Above and The State of The Market
It’s been an interesting last six months in the Maui Real Estate market. The first quarter of the year was largely a continuation of 2021. Strong demand combined with limited inventory to fuel strong price growth. Demand slowly started to taper in the second quarter. That said, inventory remained low. While the frenzy of the first quarter subsided, there was a balance between limited supply and just enough demand to make for a competitive market for buyers. While we were well below the frenzy of earlier in the year, homes and condos in particular sold faster and at a higher percentage of asking price than they would in a normal market.
This trend of a balanced ratio between buyers and sellers continued through the summer. Inventory actually contracted through most of the summer, but we lost FOMO (fear of missing out) buyers from the market. The lack of FOMO buyers had an impact. We started to see some downward pressure on values in limited parts of the market. With a discerning buyer pool, flawed properties that would have sold easily in the first quarter weren’t getting any love from buyers.
In my last musings, I showed stats that pointed to the relative resilience of this market despite rates well over 6%. The stats above point to a further shift downward in the market . Or at least two out of three did. The third is a reflection of Maui as a real estate market as a whole.
The increase in inventory and the decrease in pendings show a market where the balance in supply and demand is starting to shift. This is less due to an influx of new inventory as much as it is to decreased demand. When you look at the number of homes going under contract within 10 days or less, you can see where the push above 7% rates is starting to decrease the number of buyers. I am sure the more negative national real estate news is also having an impact on the buying decisions of some. Fomo has been replaced by wait and see.
The decrease in price reductions is the one anomaly in this market. As the market cools, you would expect sellers to adjust. Prior to Covid, Maui’s market dynamics were different than the typical mainland market. Sellers took time to adjust prices and days on market could really pile up before a listing was considered stale. It’s also worth remembering that this shift is pretty recent. We may need to see these conditions persist for a longer before more sellers begin to adjust prices.
The one other thing to note is that while we saw a shift in market conditions in these most recent stats, conditions remain variable. That’s pretty clear when we look at the difference between homes and condos. As of mid-October, new condo listings still went under contract much faster than they did pre-Covid. Condo inventory remains tight compared to demand and the volume of cash buyers blunts the impact of higher rates.There is variability in the home market too. The luxury market, which again includes a higher percentage of cash buyers, appears to be moving relatively well.
Looking forward, it will be interesting to see where the market goes from here. Since it’s taken me longer to write this blog post, I have the advantage of watching market conditions over the first ten days of November. While I haven’t crunched the numbers in any detail, pending sales stabilized to start the month. Yesterday’s inflation print out caused a shift in the bond market and mortgage rates to drop a half a point.Will that persist or will higher rates return? Needless to say, it’s too early tell. If anything, this points to continued weird market dynamics with a lot of variability in conditions.
A Little Maui Beauty to Brighten Your Day
It may not be Monday but…
Contact The Maui Real Estate Team
Variable market conditions and general market weirdness demand quality representation. Contact the Maui Real Estate Team to talk to one of our experienced agents if you are thinking of buying or selling Maui Real Estate. One of our healthy agents will be happy to learn more about your real estate needs. We look forward to being of assistance.
Once again, it’s time to check in on market conditions for another community on Maui. Let’s head Upcountry and look at the Kula real estate market. Kula spans a vast geographic area along the Western Flank of Haleakala. It runs from roughly 1,200 feet in elevation up to 4,000 feet. From an MLS perspective it includes smaller communities like Keokea, Ulupalakua and Kanaio. Kula is an agricultural hub of Maui with a number of fruit, flower and vegetable farms dotting the landscape as well as some larger livestock operations. Homes range from modest plantation style homes on rural or residential lots to substantial estates on big acreage. This post looks at market activity for the year to date as well as a few thoughts on the market outlook.
Notable Numbers from this Year’s Kula Home Sales
- As of September 13th, 65 homes sold in Kula during 2021. That is a 33% increase over the 49 sold during the same period of 2020.
- The median price of the homes sold in Kula during 2021 is $1,225,000. The average price of the homes sold is $1,521,778. The median price and average price are up 28% and 38% respectively compared to the same period of 2020.
- Fifty-seven percent of the homes sold in Kula this year closed for asking price or higher.
- The highest priced home to sell this year closed for $9,200,000. Home doesn’t quite do the property justice. The sale included two lots totaling 23 acres, two extra large water meters, a 7,809 square foot main house, a pool, a detached 7 car garage and a second 2,712 square foot home. This is the highest ever sales price for a residential property in Kula.
- This was one of 13 sales over $2,000,000 for the year to date. That compares to 3 during the same period of 2020.
Thoughts on the Kula Home Market for the Year to Date
Like the rest of the island, the Kula home market experienced robust activity over the year to date. Demand was high while supply remained low. Based on the rate of sales, there were 3.3 months supply of home inventory in January. After that, it dropped as low as 2.1 months supply in April and has yet to climb above 3 months supply again. Strong demand and limited supply helped to boost prices significantly. The question is how much? The change in average price and median price don’t just reflect shifts in value. They also reflect an increase in activity at higher price points in the market. Sales of homes over $2,000,000 increased 433% compared to 2020.
Outlook for The Kula Home Market for the Rest of the Year
It’s the classic push pull of supply and demand that should be in play for the rest of the year. At this point, it appears as if demand remains strong. We started unofficially tracking a new metric in our office over the last few weeks. We are looking at how quickly new listings are going under contract. With a high number of properties going under contract in less than a week, it is pretty clear that demand is still pretty strong. The question is whether we might see any relief with new inventory. While inventory is slowly increasing on the mainland, it remains near all time lows in Kula and Maui in general.
The Kula Land Market
Kula is an area of the island where you tend to see more land sales. A handful of new developments over the last few years and smaller subdivisions usually translates into a healthy supply. This year, increased buyer activity put a serious dent in inventory numbers.
Notable Numbers from the Kula Land Market
- As of September 13th, Maui Realtors reported 35 land sales for the year. That is up 21% from the 26 sales over the same period of 2020.
- The median sales price of the lots sold is $930,000. The average sales price is $1,058,473. The median price increased 206% from the median of $450,000 during the same period of 2020. The average price increased 24% compared to last year’s average of $853,148.
- The lowest priced transaction closed for $350,000. That was for a 1/2 acre lot without water.
- The highest priced lot to sell closed for $4,500,000. That parcel in lower Kula included 148 acres of land.
- That was one of 11 lots to sell for more than $1,000,000. By comparison, there was just one lot that sold for $1,000,000 or more during the same period of 2020. That one sale was a large land acquisition by the state of Hawaii.
Kula Land Market Activity and Outlook
The Kula land market mirrored many of the other places around the island in terms of market activity for the year to date. Higher demand, shrinking supplies and rising prices. The increase in higher priced sales was another particularly notable aspect of this year’s activity. As mentioned above, there was just the one sale over $1,000,000 in 2020 compared to the 11 sold thus far this year. Seven more properties listed for $1,000,000 show as pending on the MLS. This constitutes a massive increase in demand for higher end properties in Kula.
A lot of the higher end sales activity occurred in the Kula I’o subdivision. This gated community of 2.5 acre-25 acre lots experienced modest sales activity the first couple of years on the market. The development benefited from this year’s increased high end sales activity with 15 closes ranging in sales price between $830,000 and $1,650,000. At this point, most of the developer’s lots in Kula I’o are sold or pending. That said, I imagine we will see resales and CPR lots in the future.
It’s important to keep the increased higher end activity in mind when looking at the big shift in median and average prices. While limited supply and increased demand led to rising values, the 206% increase in median price is largely a reflection of the increased sales activity with high end lots. While the big land, big view lots in Kula I’o heavily influenced the average and median price in 2021. The big driver in 2020 was a subdivision with half acre lots in the $450,000-$500,000 price point.
Moving forward, inventory or lack thereof is going to be the big market driver for the rest of the year. Unless there is a big influx of new inventory, I can’t anticipate a lot of sales activity. If demand remains relatively strong, I anticipate that the combination of demand and low inventory will mean continued upward pressure on pricing.
Contact The Maui Real Estate Team
The Maui Real Estate Team works extensively in the Kula market. Contact The Maui Real Estate Team if you are interested in property in Kula. We would welcome the chance to discuss the market and learn more about your real estate interests and needs. You can search the active inventory of Kula Homes for Sale and Kula Land for Sale on MauiRealEstate.com.