Maui Real Estate Blog
September 2021 Kula Real Estate Market Update
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.
Maui Real Estate Blog
Old Hawaii Homes at New Prices
We recently reduced the price on two of our listings. The properties located in Kula and Haiku respectively share something in common beyond price changes. Both homes exhibit the classic Hawaii Plantation Style. While the homes were built 83 and 144 years ago, the charm and appeal of this design style endures through today.
785 Kekaulike, Kula
This Kula Classic consists of a 1936 home on just over 3.1 acres with a separate cottage built in the early 1980s. The 1936 home features design hallmarks of the era including fir floors, double hung windows with counter weights, and crystal door knobs. Originally owned by a ranch manager, subsequent owners have done a fantastic job maintaining the home over the years.
A previous owner completed a substantial addition to the property in 2006 when they added a new master suite. Their contractor took tremendous pains to ensure that the addition was true to the style of the original construction. The bedroom has fir flooring that matches the rest of the house. The builder used double hung windows with counter weights that they reclaimed from a Plantation home in Wailuku. The bathroom has a clawfoot tub. The tiles from the master bath match the original bathroom tiles on the other side of the house.
The seller recently lowered the list price for this Kula classic to $1,530,000. You can take a 3D tour of the main home to see more of the many details. Check you the 785 Kekaulike listing page for more photos.
555 Haiku Road, Haiku
Our listing at 555 Haiku Road is the oldest home that I have been in on Maui. The five bedroom, five bath home is situated on 1.2 beautiful acres with big mature trees, beautiful tropical flowers, citrus trees and bananas. Originally built in 1875, the home served as the residence of the Doctor for the nearby Pineapple Plantation. Most recently, it has been operated as a bed and breakfast. The old cliche that they don’t build them like they used to is certainly appropriate with this home.
The style of the era is evident both on a small scale and a large scale. The gracious front porch is both a gathering place, and a spot to enjoy the cooling trade winds. There is custom woodwork throughout the interior and exterior of the home. You just don’t see this type of craftsmanship with new construction.
Other features and materials include double hung windows, fir floors, crystal door knobs and a clawfoot tub in one of the bathrooms.
This classic and gracious plantation style home is now listed for $1,220,000. Take a 3D tour to get a better sense of the floor plan and to see more details of the home. Check out the 555 Haiku Road listing page for more photos and details. Contact The Maui Real Estate Team with questions or to arrange a showing of either of these historical homes.
Maui Real Estate Blog
Classic Hawaii Plantation Style Home in Kula
We have a brand new listing in Upcountry Maui. The property includes 3.136 acres of fully fenced, gently sloped land; a classic three bedroom, two bathroom Hawaiian Plantation Style Home and a detached ohana.
Hawaiian Plantation Style in Kula
The main home for this property was originally constructed in 1936. There was a significant addition that added a new master suite in 2006. The builder took considerable effort to ensure that the addition blended seamlessly with the style and charm of the original home. Some of the features of the home include a cedar shake roof, fir floors throughout the home, a wood burning stove in the living room for cooler Upcountry nights and a clawfoot tub in the master suite bathroom. The kitchen was updated in 2013 with butcher block counter tops and subway tile back splash.
There are three generous lanai spaces off the back of the home. The two covered lanai are located in front of the master suite and the living room respectively. There is a large uncovered lanai space in front of the kitchen. The lanai spaces make for great locations to take in the stunning views of both the North Shore and South Maui Coastlines, the big blue ocean, island of Lanai and West Maui Mountains. It is tough to beat watching the sun dip in to the Pacific on a cool evening Upcountry.
Other Structures on the Property
The home has a detached two car garage. There is a good space in the garage for a small work shop. There is also an office with a half bath off the back of the garage.
The detached ohana is located downslope from the main home. The distance and topography results in good separation and privacy between the structures. The ohana also has its own discrete entrance to the property.The structure itself is configured as a studios. It has a good sized kitchen with tile floors. The rest of the ohana has laminate flooring. There is a covered lanai space for taking in the ocean and mountain views.
The 3.14 acres is fully usable. It mixes beautiful landscaping around the home with the rest of the land set up well for agricultural pursuits. The lanscaping includes a number of beautiful native trees including ohia and koa trees. There is a common mango tree in front of the home that has one of the more impressive collections of staghorn ferns, Pele’s Hair (Spanish Moss) and a smattering of colorful orchids. Fruit trees on the property include lemons, avocado, bananas and figs. One of the large avocado trees has a great tree house. There are a number of separate pasture areas that have been set up for goats or even a couple of horses.
Find out More About this Kula Classic
This Upcountry Classic is offered for $1,700,000. You can see more photos and details of the property on the 785 Kekaulike Avenue, Kula listing page. Contact The Maui Real Estate Team if you have questions or you would like to set up a showing. Not on island? You can take a 3D tour of both the main house and the ohana.
Maui Real Estate Blog
Three Takeaways from the Maui Real Estate Market During the First Quarter of 2017
It has been a while since I have done an island wide stats post. After over ten years, I was struggling with rehashing the same format on a monthly basis. I decided to take a different approach this month. Rather than barraging you with lots of numbers, I wanted to try to distill the numbers into a few key takeaways. I also am gong to try to do this on a quarterly basis. With our smaller market, I think there is some merit to looking at slightly longer time horizons to overcome some of the variability we get on a month to month basis. Hopefully, those two changes will make for a better and more informative read. Without further ado, Here are my three key takeaways from the first quarter of 2017 followed by a some thoughts on what we may expect over the next few months.
1. Scarcity was the biggest driver of the Maui Real Estate market for the first three months of 2017. This was particularly true in the home market under $1,000,000. The lack of inventory in this price range has resulted in a lot of bidding wars and upward pressure on pricing. It also meant a decrease in sales volume as there just aren’t as many homes to sell. Buyers are out looking, but they are having a tough time getting into places. This is reflected in the stats with median prices up 15% compared to the first three months of 2016 and sales volume down 5%. The March median home price of $769,000 was the highest that we have since 2006. Again, this really hammers home the scarcity of listings at lower price points.
Scarcity is not a Maui specific phenomenon. It is happening throughout the United States. I was listening to Jill Schlesinger of CBS on Here and Now. She talked about the factors constraining the housing stock nationally. She cited a Baby Boomer generation that has not been quick to sell their homes at retirement. There are quite a few members of that generation who are choosing to modify their homes so they can age in place. Schlesinger also said that a lot of homes were acquired by private equity companies during the last downturn. They have kept those properties as rentals rather than putting them back on the market. I am not sure that the same factors are in play on Maui. For one, private equity firms were not buying property in big numbers on island. I think the biggest constraint we are seeing on Maui is a lack of new construction. New construction is not even coming close to keeping pace with population growth. It takes a longer period of time for new developments to get off the ground on Maui and many times they will fizzle out in between market cycles. We are also seeing a lot of new development occurring at higher price points in the market and less development occurring at the entry points of the market where demand is highest.
2. Luxury Real Estate Sales Trend up and Shift South. Luxury home sales were up in the first quarter of the year. There were 16 sales over the first 3 months of 2017 compared to 11 over the first 3 months of 2016.
Over the last couple of years, luxury home sales have been stronger in West Maui compared to South Maui. Launiupoko has led the charge with Kapalua and Kaanapali following close behind. There were eight sales in West Maui over $2,000,000 during the first 3 months of 2016. There was a a solitary sale in South Maui during that period. This year, there were four sales in West Maui over $2,000,000, and there were eight sales in South Maui over $2,000,000. Makena market activity was particularly notable with four sales over $9,000,000. It is hard to account for the shift in sales volumes between the different part of the island. Sometimes it just depends on the comparative quality of the inventory. Makena may also be seeing a bump due to the development of the Makena Golf and Beach Club. While none of the four sales in Makena were part of this development, this ultra high end development from Discovery Land Company may be drawing some affluent buyers to explore more immediate options for purchase outside of the new development.
There was also an uptick in luxury home sales outside the resort areas. There was a single sale in each of the communities of Hana, Haiku, Kula and Paia.. That compares to a single sale outside the resorts during the first three months of 2016.
The luxury condo market saw some similar trends. Sales were up overall. There were twenty-three sales over $1,500,000 during the first few months of this year compared to seventeen during the first three months of 2016. Twenty of the sales were in South Maui during 2017 compared to nine last year. Conversely, West Maui has seen a dip in activity with three closes compared to eight in 2016. Some of that can be attributed to a decrease in inventory in Honua Kai. All of the developer units have sold there which means we are now depending exclusively on resales.
3. Overall, the condo market had strong start during the first quarter of 2017. Condo sales do not seem quite as constrained by inventory when you look at the sales volume. Sales volume is up 17% compared to last year***. Almost all of that growth in activity can be traced back to the vacation rental condo market.
The vacation rental market had been in the doldrums for the previous couple of years. Much of that can be attributed to a decrease in demand from our neighbors North of the border. The Canadian Dollar has slumped after a number of years of parity. As a result, we saw relatively limited activity and a glut of inventory in some of the more popular vacation rental condos in the Kihei area. That appears to have shifted during this buyer’s season. Overall, sales of vacation rental condos were up 48% county wide. In Kihei, sales of vacation rental friendly condos were up 73%.
It is hard to attribute an exact reason for the sudden boom in the Kihei condo vacation rental condo market. While we may be seeing a few more Canadian buyers, the Canadian dollar remains far below the peak that prompted the last wave of Canadians. I surmise that there may be a number of factors at play. The concept of vacation rental ownership is being more ingrained into people’s psyche as companies like Airbnb become more prominent. A number of our domestic feeder markets are feeling their own real estate booms. West coast markets like Seattle, Portland and much of California continue to see strong activity. We also have seen a sustained bull run in the stock market that may provide people with the discretionary capital to make a second home purchase.
As with the luxury condo market, West Maui hasn’t seen quite the same level of activity for the general vacation rental condos. Numbers are down slightly in West Maui for condo sales. Again, Honua Kai plays a part in the lack of activity. This condo complex has been the driving force in West Maui condo sales in all price ranges since 2010. With the remaining inventory higher priced resale units, sales have slowed substantially at Honua Kai.
What can we expect over the next few months?
There is no immediate relief coming with the housing supply issues on Maui. On the demand side, island rents remain high and interest rates are still comparatively low. Barring a cataclysmic shift in the economy or a major upheaval in global politics, market conditions should remain similar to what we saw in the first quarter of the year. That means that competitive bidding will likely remain the norm for well priced homes in the $1,000,000 and under price range. You may even see a few bidding wars at well priced homes over $1,000,000. This can be a frustrating time for buyers as strong offers can still be trumped by irrational exuberance. That said, buyers should remain patient, make sure they have their ducks in a row when it comes to financing, be realistic about their financial picture and act decisively when properties that meet their needs come to market. While this is a seller’s market, there is some variability in demand by town and even neighborhoods on the island. Not everywhere is booming so sellers should consult closely with their Realtor and study recent sales to develop a realistic market price. Contact the Maui Real Estate Team if you are considering buying or selling property on Maui. We would welcome the opportunity to sit down with you face to face or to talk on the phone to discuss your real estate needs.
***Note the numbers reported for vacation rental condo sales are not 100% accurate. It is not a mandatory field in the Maui Multiple Listing Service to report whether or not a condo may be vacation rented. As a result, vacation rental condo sales can be under reported.
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.
Maui Real Estate Blog
May 2016 Maui Real Estate Statistics
Don’t be surprised to see a big spike in median home prices in Maui in the near future. Read on to find out why. This is our look at the May Maui Real Estate Statistics. We take a look at median prices, sales volumes, new pending sales in May and notable numbers. We also give a few thoughts on what it all means. Without further ado, here are the May numbers.
Maui Sales Volumes and Median Prices
By my count, there were 94 homes sold in May with a median sales price of $622,500. In May of 2015, there were 88 sales with a median price of $607,097. That calculates to a 7% increase in sales volume and a 2.5% increase in median price.
There were 118 condos sold in May with a median sales price of $423,500. Last May, there were 110 sales with a median price of $459,500. That calculates to a 7% increase in sales volume and an 8% decrease in median price.
There were 14 land sales with a median price of $378,500 in May. There were 12 sales in May of 2015 with a median price of $380,000. That is roughly a 17% increase in sales and around a half of a percent drop in median price.
Notable Numbers from the May Maui Real Estate Sales Activity
- The highest priced home sale last month on Maui was $6,000,000. The oceanfront estate in the Kuau area of Paia included a 4 bedroom, 4.5 bath home with 6,258 square feet of living space, a separate 1 bedroom, 1 bath cottage with 1,0125 square feet of living space on a 1.28 acre lot.
- That was one of 7 home sales over $2,000,000 in Maui during May. The other big closes included 2 sales in Wailea, 2 sales in Kapalua, and one sale each in Kula and Lahaina.
- The highest priced condo transaction last month closed for $4,150,000. That was a 3 bedroom, 3.5 bath condo with 2,789 square feet of living space at Montage Kapalua.
- The Montage sale was one of seven condo closes of $1,500,000 or greater in May. The other closes included 4 sales at Honua Kai, a Kapalua Ironwoods and a Mahana. I thought it was notable that all of those sales were in West Maui.
- The highest priced land sale for the month of May closed for $2,700,000. That lot is .429 acres of beachfront in North Kihei.
- There were 9 bank owned sales that closed in May of this year. Last year, there were 13 bank owned sales reported on the MLS.
- There were only 4 short sales this May. That was the same number as last May. Short sales remain a relatively small percentage of the total sales. With continued appreciation, that should remain the case for the remainder of this market cycle.
New Pending Sales
The bulk of the sales reported above went under contract sometime in March or April. To give us a sense of more current market demand, the chart below shows the number of properties that went under contract in May compared to the numbers in May of 2015.
This is the second month in a row when pending home sales have gone down. I would expect that we might see a dip in actual sales volume in June. Condos saw an increase in pending sales in May. That marks the 4th straight month of increased pending sales for condos compared to 2015. That bodes well for sales over the next couple of months. Land pending sales were down slightly after a slower April. Land pendings have been more up and down this year. We are also talking about a much smaller sample of sales so we may just be seeing some month to month variability.
Thoughts on the May Numbers
I started this post with a teaser that Maui Median home prices are likely to see a healthy increase sometime in the coming months. That might sound like a contradiction to my suggestion that sales volume is going to be decreasing based on the dip in pending home sales. In fact, the decrease in sales and the increase in median prices are likely tied together.
Anecdotally, it feels like inventory has been shrinking significantly for homes. The local real estate association keeps track of this information. When I looked at their data for the last few months, inventory is down almost 9% compared to earlier this year. That said, this is actually fairly typical. It mirrors shifts in inventory that we saw last year. So what makes the current market look different?
I decided to take a deeper look at the current inventory. Currently, there are 517 homes that are active. Of the 517 homes that are active, 307 of the homes are priced $1,000,000 or higher. That is an impressive 59% of the inventory. In May, the median price for a home was $622,500. Of the 517 active homes listed, there were only 83 homes priced for at or below the median sales price of $622,500. That is just 16% of the inventory. I also looked at the pending home sales. There are currently 277 homes under contract. Of that total, 147 homes of the 277 pending homes are listed for at or below the median price of $622,500. That is 53% of the pending sales. Of the 277 pending sales, 52 of the homes were priced $1,000,000 or more. That is roughly 19% of the pending sales.
Chewing on the numbers above, it is clear that there is strong demand and shrinking inventory at or below the median of $622,500. While the pending sales will likely help keep the median prices in check next month, it is likely we will see median prices start to rise unless the inventory of homes at or below the current median increases significantly. The increase will stem from fewer lower priced sales and to a lesser extent upward price pressure from the lack of inventory. The lack of inventory will likely also keep sales volumes down.
While the home market under $700,000 appears to be continuing to be tight marketplace, that is not true of other price points and property types. The market conditions also differ in different geographic areas of the island. Overall, there is a lot of variability in this market. Contact The Maui Real Estate Team to discuss your specific real estate needs. We will give you our take on market conditions particular to your interests.