Maui Real Estate Blog

Taking the Pulse of the West Maui Vacation Rental Condo Market

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.

The deluxe kitchen area of one of the three bedroom units in the Konea Building of Honua Kai.

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.

A couple of palm trees frame the ocean views of a direct oceanfront unit at Papakea.

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.

Pete Jalbert

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

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

This chart compares real estate sales volumes by property type for May 2015 and May 2016

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.

A comparison of the number of properties that went under contract by property type in Maui County during May 2015 and May 2016.

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.

Pete Jalbert

Maui Real Estate Blog

April 2016 Maui Real Estate Statistics

As we hit the midpoint of May, I wanted to give an update on the April Maui Real Estate Statistics. April is the last month of Maui’s “peak” home buying season. Once we get past April 15th, visitor numbers typically dip reducing the number of potential buyers. That said, the bulk of the sales that we see in April are from contracts written earlier in the buyer season. These stats take a look at the number of properties sold, median prices, properties that went under contract in April and notable numbers from the April sales activity. I also give a few thoughts on the state of the market and the numbers that stood out to me in April. Without further ado, here are the April numbers.

April Maui Real Estate Sals Volumes

This chart compares the real estate sales volumes for Maui County during April 2015 and April 2016

There were 99 home sales reported in Maui County during April with a median sales price of $680,000. In April of 2015, there were 87 homes sold with a median price of $581,000. That calculates to roughly a 14% increase in sales activity and a 17% increase in median price.

There were 125 condo sales reported in Maui during April with a median price of $445,000. Last April there were 105 condos sold with a median price of $410,000. That is a 19% increase in sales volume and roughly a 9% increase in median price.

There were 10 land sales reported in Maui County for the month of April with a median sales price of $453,500. In April 2015, there were 12 sales with a median price of $417,500. That calculates to a 17% decrease in sales and an 8% increase in median price.

While compiling the median sales prices and sales volumes, I came up with some numbers that I thought were worth sharing from the April numbers.

Notable Numbers from the April Maui Real Estate Sales

  • The highest priced home sale in April closed for $6,550,000. This Kula Estate included a 4 bed, 4 bath home with 7,809 square feet of living space, 2 cottages, a 9 car garage building and a lot more on 23 acres.
  • It was a busy month for luxury home sales with 13 closes more than $2,000,000. In addition to the big Kula sale, there was one additional Kula sale, 3 sales in Wailea, 3 sales in the Launiupoko area of Lahaina and one sale each in Paia, Haiku, Kapalua, Kihei, and Ka’anapali.
  • The highest priced condo sale in April closed for $5,490,309. This Honua Kai Condo has 3 beds, 3.5 baths with 2,770 sq feet of living space and a 2,200 square foot lanai.
  • The big Honua Kai close was one of 13 condo sales over $1,500,000. Other sales included 4 more closes at Honua Kai, 2 Wailea Point Condos, a Montage Kapalua Bay, a Polo Beach, an Alaeloa, Mahana, Kaanapali Shores and a Masters Ka’anapali Unit.
  • The highest priced land sale in April closed for $850,000. The 1.45 acre condominiumized agricultural lot in Launiupoko has the entitlements to build the main house for the condo.
  • There were 11 bank owned transactions that closed in April. That is up slightly from the 9 bank owned sales in April of 2015. There were 4 successful short sales that closed in April 2016. That is the same total as April 2015.

Pending Real Estate Sales in April
Sales are a lagging indicator. They do not show current buyer demand. That is why our stats posts include the number of properties that go pending in that particular month.

This chart compares the number of properties that went under contract in Maui during April 2015 and April 2016

The number of properties that went pending in April was lower compared to April of 2015. New contracts for homes and lots were down while condos were up. I am not sure that is indicative of any sort of trend. As a whole it is something of a reversal of what we saw during the first quarter of the year where home sales were up significantly, land was up slightly and condo sales were down. One month of varied market activity is one thing. If we were to string a few months together, we might be seeing a trend.

Thoughts on the April Sales Number and The Maui Real Estate Market
Of all of the sales figures from April, the luxury property sales stood out the most to me. There were more homes sold over $2,000,000 in April than the previous three months of the year combined. The 13 condo sales over $1,500,000 wasn’t too far behind the 17 total sales during the first quarter of 2016. After a slower start to the year, there appears to be a little bit of a bump in high end sales activity. It makes some sense as the stock market has seen a recovery from the doldrums of earlier this year. It will be interesting to see if that was just one month or if this increased activity will sustain itself.

The high median sales price for homes was noteworthy. This was the second highest median sales price since the recovery of the real estate market. The high median is related to the high number of higher priced sales. It is also due in part to a shrinking inventory of lower priced homes. Rising values and just a tight overall market have resulted in a shrinking pool of homes available for sale for less than $500,000.

The condo market numbers were also somewhat notable in that sales were up and pending sales were up compared to April 2015. The condo market was slower during the first quarter of 2016 when compared to 2015. This may be a blip or it may be the start of an uptick in activity in the condo market. It will be interesting to see the numbers in the next couple of months.

While the April condo market bucked the first quarter trends, the home market continued the momentum of the first quarter. April home sales were well above the totals for April 2015. That made it something of a surprise to see April pending home sales were well below April 2015. As mentioned above, one month may just be due to variability in the market. We will see what unfolds in the coming months.

If you are a buyer or a seller thinking of entering the Maui Real Estate market, you will find that market conditions are not monolithic. While this blog post discusses the generalities of the Maui market, market demand and inventory varies by geography and price point. Contact The Maui Real Estate Team to discuss market conditions specific to your real estate needs. We look forward to being of service.

Pete Jalbert

Maui Real Estate Blog

February 2016 Maui Real Estate Statistics

We are two months into the new year and more than half way through Maui’s peak real estate season, that means it is a good time to check in with the Maui Real Estate statistics. After a slow start for sales in January, we saw an increase in sales volume among all property types in February. We will have all the details on sales volumes, medians, February new pending sales, notable numbers and a few thoughts on the market below. Without further ado, here are the February Maui Real Estate Statistics

Maui Sales Volumes and Median Prices

This chart compares the real estate sales volumes for Maui County during February of 2015 and February 2016

By my count, there were 69 homes sold on Maui in February with a median sales price of $595,000. In February of 2015, there were 60 homes sold with a median price of $558,625. That calculates to a 15% increase in sales activity and a 6.5% increase in median price.

There were 102 condos sold in February 2016 with a median sales price of $444,450. Last February, there were 95 condos sold with a median sales price of $475,000. That represents a 7% increase in sales activity when comparing February 2016 to February 2015 and a 6% decrease in median price.

There were 20 lots sold last month with a median sales price of $512,500. In February of 2015, there were 14 sold with a median price of $490,000. That is a 43% increase in sales volume and a 4.5% increase in median price.

Notable Numbers from the February Maui Real Estate Sales
While compiling the sales volumes and the medians, I came across some other notable numbers from the February Real Estate sales activity on Maui.

  • The highest priced home to sell on Maui in February closed or $5,550,000. Located in the Wailea Golf Vistas subdivision, the 4 bedroom, 5.5 bathroom luxury home includes amenities like an infinity pool and big ocean views.
  • The Wailea Golf Vista Sale was one of six total home transactions that closed for more than $2,000,000. The other big transactions included a sale in Makawao, one in the Launiupoko area of Lahaina and three sales in Kapalua.
  • The highest priced condo sale in February closed for $4,295,000. The 3 bedroom, 4 bath unit at the Andaz Residences offered top of the line finishing and 2,644 square feet of living space.
  • The Andaz sale was one of six total condos that sold for more than $1,500,000 in February. The other sales were located at Montage Kapalua Bay, Honua Kai, Makena Surf, Wailea Beach Villas and Ka’anapali Ali’i.
  • The highest priced lot to sell closed for $1,450,000. The big 25 acre parcel is located in the Honolua Ridge area of Kapalua.
  • That was one of three lots that sold for more than $1,000,000. The others were located in Ka’anapali Coffee Farms and Launiupoko.
  • There were 8 REO or bank owned sales in February. That was down from the 14 bank owned sales last February.
  • There were 5 short sale transactions that completed successfully in February. All of them were home sales. That is up modestly from the 3 short sales in February of 2015.

February Pending Sales
The February sales are based primarily on contracts written in December and January. There may be a smattering of quick closes written up in February and a handful of longer term contracts. To get a better understanding of buyer demand last month, we wanted to provide some information on the number of properties that went pending in February.

This chart compares the number of properties that went pending in Maui County during February of 2015 and February 2016

Homes, condos and land all saw an increase in pending sales over February of 2015. Pending sales for homes were up sharply. Buyer demand remains strong on island for homes. Condo sales were up by the thinnest of margins and land sales saw a more substantial increase.

Maui Real Estate Market Thoughts
It is safe to say that , it was a pretty strong month for the market on Maui. February also was bolstered by having an extra business day since it was a leap year. With home sales and home pendings, February of 2016 clearly outperformed 2015 regardless of that extra day. With condos, things were a little less clear cut. When you subtract the 5 sales on the last day of the month, the increase in sales shrinks to 2. When you subtract the 9 pending sales that occurred on the 29th, the number of pending sales falls below what we saw during February 2015.

There is a lot of variability in activity within the condo market on Maui. There are parts of the market that are doing well like the entry level condo market. The luxury condo market is also doing pretty well. The vacation rental condo market is where we are seeing bigger drops in activity. With the big drop in the Canadian Dollar and the decline of Alberta’s oil industry, we have seen a shrinking pool of buyers. We have also seen growing inventory as some Canadians put their condos on the market. The net result is higher inventories and limited demand.

The home market continues to be strong. Demand is particularly strong for homes priced at or below the median prices of the market. Interest rates have dropped to levels even lower than what we saw before the Federal Reserve raised interest rates. With a tough rental market on island, demand continues to be strong from first time home buyers.

Land saw something of a rebound in February after the really low sales numbers in January. The number of land sales remain somewhat limited compared to other property types. That can make for some dramatic shifts in sales percentage wise with relatively modest changes in units sold.

The heterogeneity of the Maui Real Estate market conditions heightens the importance of savvy and experienced representation. Contact The Maui Real Estate Team today if you are interested in buying or selling property on Maui. We would welcome the opportunity to sit down with you to discuss your real estate needs and discuss market conditions specific to the areas and price points that are of interest to you.

Pete Jalbert

Maui Real Estate Blog

January 2016 Maui Real Estate Statistics

I have to admit, I have been struggling to keep up with the blog as of late. It has been a busy start to the year between transactions and listings. On a personal level, we are finishing the remodel of a home and planning to move in on Friday. Needless to say, cobwebs and dust have been forming on the little corner of cyberspace known as our blog. I started the research for this post on the 6th and began to write this post over ten days ago. That said, I have a quick window this afternoon to finish up a look at the January numbers. January was a little bit off from last year’s numbers. I will give all the details below as well as a few thoughts on what it all means. Without further ado, here are the January 2016 Maui Real Estate Statistics.

January Sales Volumes and Median Prices

This chart compares the January 2015 and January 2016 sales volumes for Maui County.

There were 73 homes sold in January with a median price of $630,000. Last January there were 75 homes sold with a median price of $577,000. That is roughly a 3% drop in volume and a 9% increase in median price.

Maui County Realtors reported 82 condos sold last month with a median price of $397,500. In January of 2014, there were 83 condos sold with a median price of $378,000. That is just over a 1% drop in volume and a 5% increase in median price.

It was a particularly slow month for land sales with 5 closes and a median of $850,000. Last year, there were 11 sales with a median price of $750,000. That is a 55% drop in volume and a 13% increase in median price.

Notable Numbers from the January 2016 Maui Real Estate Sales
While compiling the numbers above, I came across some other notable numbers that I thought were worth sharing.

  • The highest priced home to sell in January closed for $3,975,000. That house is an oceanfront home in the Baby Beach area of Lahaina. That was the only home sold for more than $2,000,000 last month.
  • The highest priced condo transaction closed for $3,300,000. That was a 3 bedroom, 3.5 bath top row unit at Ho’olei. It was one of the better located units in the complex.
  • That was one of four condo sales for over $1,500,000 in January. The other sales included two transactions at Polo Beach and one sale at the Honua Kai Resort.
  • There were no land sales for more than $1,000,000 in January. The highest priced land transaction for the month closed for $865,000. It was a 1.42 acre condominiumized lot in Launiupoko with entitlements to build a main house.
  • There were 9 bank owned sales in Maui during January. There were also 9 bank owned sales in January of 2014.
  • There was just one short sale that closed in January. Last year, there were 6 short sales that closed in January.

Pending Sales Activity in January
With the January Sales numbers down from last year, I was interested to see how many properties went under contract in January.

This chart compares the number of homes, condos and lots that went pending in January of 2015 and January of 2016

The number of homes that went pending in January was up 8% compared to January of 2015. The number of condos that were pending went down 8% compared to last year. Land was also down 26% compared to last year. That said, the 17 land pending sales is a nice improvement from the 5 closes in January.

Thoughts on the January Maui Real Estate Statistics
This is the first month since August 2014 where all three property types saw a decrease in sales volume compared to the year before. I can’t say that I am horribly surprised to see the decrease in activity in home sales. We saw accelerated demand in the later parts of 2015 as buyers were trying to grab properties before the anticipated bump in interest rates. After the rates bumped, albeit modestly, there was a a dip in demand. Looking at the pending numbers, this drop in activity for homes appears to be relatively short lived.

The condo market may be experiencing influences above and beyond fluctuations in interest rates. After seeing a decrease in sales compared to last January, condo pending sales were also down compared to January 2015. I would postulate that there are two additional factors at play. January was a bumpy month for the stock market. Purchasing a condo as a second home on Maui is a discretionary purchase that is more likely to occur when the potential buyer is feeling flush. If a potential buyer takes a big hit to their stock portfolio, that typically isn’t when they are reaching for their wallet to make a big discretionary purchase. The other factor that is dragging on our condo market is the weakened Canadian Dollar. From 2007-2014, the Canadian Dollar was at or near par with the U.S. Dollar. It is now sitting at roughly 70 cents on the dollar. A significant number of the Canadian buyers were from Alberta. The big dip in oil prices, one of the big drivers of the decrease in the Canadian Dollar, has been an extra hit to the oil driven Alberta economy.

The five land sales recorded in January was the second lowest monthly total since 2010. That said, we saw a pretty healthy number of land listings go under contract in January. The land market has never come close to reaching the sales numbers we saw during the last boom. Financing is harder and that is a factor. There also appear to be fewer lower priced lots on the market. We saw a little more activity a couple of years back as there were some lot prices that made more sense when doing a build vs. buy preexisting analysis. I am not saying there aren’t lots like that still on the market, but they appear to be fewer in number.

Overall, this remains a somewhat schizophrenic market with some parts of the market scorching hot while other segments are chock full of inventory with limited demand. Contact The Maui Real Estate Team if you are considering buying or selling property on Maui. We would welcome the change to listen to your needs and give you our thoughts on market conditions for the type of property that might fit your needs.

Pete Jalbert