Maui Real Estate Blog
September 2022 Ka’anapali Market Update
Post Updated September 29, 2022
It’s time for an excursion to West Maui as we continue our series of posts on market conditions in different communities around the island. The focus of today’s post is Ka’anapali. This resort community experienced a boom in activity during 2021 with rising prices and a high volume of sales. How has the market been in 2022? Find out more below as we look at year to date numbers for 2022 with numbers from 2021 and 2019 provided for comparison. There are also a few thoughts on the outlook for the rest of the year and early 2023.
Ka’anapali Home Market Numbers
- Maui Realtors reported 20 homes sold for the year to date as of September 23. That is 59.2% less than the 49 sales reported over the same period of 2021. It is 11.11% higher than the 18 reported in 2019.
- The median price of homes sold in 2022 is $2,650,000. That is 11% higher than $2,387,000, last year’s median over the same period. It is 77.91% higher than $1,489,500, the median during the same period of 2019.
- The average price of the homes sold in Ka’anapali during 2022 is $2,855,552. That compares to an average of $3,017,891 and $1,994,037 during the same periods of 2021 and 2019 respectively. This year’s average is 5.38% lower than last year and 43.2% higher than 2019.
- 20% of this year’s buyers paid over asking price for their home and 45% paid asking price or above. In 2021, 12.24% of buyers paid over asking price and 28.57% paid asking price or above. In 2019, no buyers paid over asking price and 11.11% paid full price.
- Realtors reported 30% of sales were cash transactions.
- The highest priced transaction this year closed for $5,295,000. The property in the Lanikeha subdivision included a 3 bedroom, 3.5 bathroom home with 3,086 square feet of living space and a 1 bedroom, 1 bathroom, 508 square foot cottage on a .485 acre lot.
- The lowest priced sale for the year to date closed for $1,681,050. The bank owned property in Ka’anapali Hillside actually sold via online auction for 46.17% over asking price. The home needed serious repair and renovation.
- The Ka’anapali Hillside subdivision had the most sales activity with 6 closes. Lanikeha and the Summit were the next busiest with 5 transactions each.
Thoughts on the Home Numbers and the Outlook for the Rest of the Year and Early 2023
After a rip roaring 2021 for sales, transaction activity decreased sharply this year in Ka’anapali coming in just above the pre-pandemic levels of activity during 2019. That said, decreased volume is just one part of the story. There was enough demand that 45% of all home sales closed for asking price or above. That’s even more than last year. When compared to 2019 numbers, that 45% is particularly striking. Back before the boom of the last couple years, above asking price offers were exceptionally rare and just over 10% of the buyers paid full price.
Some of the decreased sales volume can be attributed to a scarcity of listings at lower price points and within a couple of higher priced Ka’anapali neighborhoods. There were no transactions or even inventory in the Pinnacle this year, and just two listing and no transactions in Ka’anapali Coffee Farms. At this time, there is no active inventory for less than $3,000,000, with the only 2 listings below that price under contract.
Inventory isn’t as big of an issue as you move up in price range in Ka’anapali. Fifty percent of all the active inventory is priced between $5,000,000 and $7,000,000. Thus far one home sold in that price range with one additional home listed above $5,000,000 under contract.
It is worth comparing the homes that sold for between $5,000,000 and $7,000,000 last year with the current inventory in this price range. Last year’s sales included two large homes on acreage in Ka’anapali Coffee Farms and a 6,575 square foot home in the Pinnacle. While size isn’t everything when it comes to value, this year’s $5,000,000 and up listings tend to be smaller homes on smaller lots than last year’s sales. The active inventory includes four homes in Lanikeha with the largest home coming in at 4,557 square feet and a home in Kaanapali Coffee Farms substantially smaller than both of last year’s highest priced sales in that neighborhood.
It is also worth noting that all of the active listings in this range appear to be spec builds. There are two more spec builds in Lanikeha priced between $4,000,000 and $5,000,000. This volume of spec building is almost unheard of in the Maui Luxury home market. It will be interesting to watch the sellers of these spec builds through the rest of the year, especially if we see additional shifts in the market and or the economy. I surmise that it may take some pencil sharpening for some of those properties to go under contract.
As for overall Ka’anapali luxury home market activity in late 22 early 23, inventory constraints at lower price points will impact sales volume. Any additional sales beyond the current pendings will mostly come via new inventory or price adjustments. Rising borrower costs may also curtail activity. While there is a fair amount of cash in the market, rate increases will impact affordability for some buyers. Negative economic news and declines in the equity markets could also cause some buyers to put second home purchases on hold.
Ka’anapali Condo Market Numbers
- As of September 23rd, Maui Realtors reported 123 condos sold in Ka’anapali for the year to date. That is 37% fewer than the 194 that closed over the same period of 2021. It is 14.95% more than the 107 that sold during the same period of 2019.
- The Median price of the condos sold for the year to date is $1,450,000. This is 52.63% higher than the median of $950,000 from last year over this same span. It is 63.66% higher than the median for the same period of 2019.
- The average price of the condos sold for the year to date is $1,724,465. That is a 31.67% increase over last year’s average through September 23rd. It is 54.15% above the 2019 average during the same time span.
- 23.58% of all of the condos sold thus far this year sold for over asking price, and 47.15% sold for asking price or above. That’s well above last year’s numbers of 8.76% over asking and 44.33% for asking price or above. Just to give some context as to what is was like pre-Covid, in 2019 only 2.8% of sales sold for over asking and 16.82% sold for asking price or above.
- Maui Realtors reported that 51.21% of all sales were cash transactions. That’s up a little over the 50% reported last year. Cash purchases were actually higher at 59.81% in 2019.
- The lowest priced condo to sell in Ka’anapali is a leasehold studio unit in Ka’anapali Shores that closed for $325,000.
- The highest priced condo to sell closed for $5,899,000. The 3 bedroom, 3 bath unit in the Konea Tower at Honua Kai has 2,280 square feet of living space.
- Honua Kai is the busiest condo development thus far this year with 37 closed transactions. Ka’anapali Shoes is second busiest with 20 sales for the year to date. The Masters had the third most inventory with 15 sales.
Ka’anapali Year to Date Review and Late 2022 Early 2023 Market Outlook
While the Ka’anapali Condo market for the year to date did not see a repeat a the astounding sales volume of 2021, it remained a busy market well above the levels seen in 2019. If anything, constrained inventory and continued demand made for a more competitive market than last year with more properties closing for over asking price. The market conditions meant continued upward pressure on prices.
As it stands, the vacation rental and second home condo market continues to be resilient as some other types of property on island start to feel a market shift. As of the 26th of September, there are only 17 active condo listings on the market in all of Ka’anapali. Limited inventory improves the position of sellers and continues to exert at least some upward pressure on pricing. It will be interesting to see how the limited supply balances out against demand. Again, the cash in this market makes it a little less interest rate sensitive, but there is still some impact. As of right now, a 30 year fixed on a vacation rental condo is being quoted as high as 8.5%. Needless to say, a lot of borrowers are opting for ARM products. Even those are a lot more expensive.
The chart above shows pending condo sales by month in Ka’anapali over the last five years. A few things worth noting when looking at the chart. The first things is that 2021 and 2020 are anomalies with 2019 and 2018 more normal markets. If you are wondering about the April 2018 spike in pending sales, the market got a boost from a new development, Honua Kai Luana Gardens Villas. It’s also worth noting that while 2022 pending sales started stronger than 2019 and 2018, monthly pendings for 2022 are running behind both 2019 and 2018 since May. The last thing is that while there is a little more activity in the first half of most years, the second half of the year sees steady activity. I would suspect that we will see “below normal” market activity through the rest of the year.
Based on inventory and seasonality, I would anticipate relatively limited sales volume to close out the year. With the amount of inventory available, the economy in flux and borrowing costs the highest since 2002, it looks like a quieter start to 2023 could be in order. We shall see what happens going forward.
Contact The Maui Real Estate Team
Contact The Maui Real Estate Team if you have questions about this post or if you need assistance buying or selling property in the Ka’anapali area. You can find all of the current active Ka’anapali Homes for Sale, Ka’anapali Condos for Sale and Ka’anapali Land for Sale on MauiRealEstate.com.
Maui Real Estate Blog
Maui Market Musings Vol. I
Welcome to Maui Market Musings! This is a new feature that I hope to post weekly or at least every other week. This is going to be something of a grab bag post where I hit on a variety of topics relevant to the Maui Real Estate market and beyond.
The first month of the year is done and dusted and that means the Realtor Association of Maui January stats are out. Here are some numbers worth highlighting.
- Pending Home and Condo sales decreased in January compared to January of 2021 by 21.3 and 31.3% respectively.
- The decrease in activity is due largely to decreased supplies. The volume of homes and condos for sale are down 34.6% and 75.8%. As it stands, there is about 1.8 months of home inventory and .8 months of condo inventory on the market. Six months supply is typical of a balanced market.
- The limited supply is translating into upward price pressure. The median home price increased 18.1% compared to last January and the median condo price rose 26.3%. Those numbers aren’t an exact reflection of changes in property values compared to last January as the composition and price point of properties sold is going to have an impact. That said, it is safe to say that prices are up substantially.
- Limited supply is meaning that properties are selling faster. Days on market for homes decreased 26.8% compared to last January. Days on market for condos decreased 39.9%.
- Current market conditions also mean that properties are selling for a higher percentage of list price. On average homes are selling for 100% of list price and condos are selling for 100.1% of list price.
What Does This Mean for Buyers and Sellers?
How are these numbers translating to what we are seeing first hand in the market? We listed a nice home in Haiku last week. Within that first week, we showed the property just over 20 times, received 12 offers and went under contract for well over asking price.
Buyers should expect that properties priced close to market will attract multiple offers. The buyers winning these bidding wars are being aggressive in some cases going well over asking price and waiving some if not all contingencies. Sellers who price close to market can expect a lot of showing activity with their home.
The pricing close to market component is important. While some buyers are really reaching, some sellers may be overshooting the market. We are seeing this in particular with some higher priced parts of the market. Last year, twelve homes sold in the Lanikeha subdivision. The average sales price for the twelve homes was $2,942,347 and the median price was $2,879,500. As of right now, there are seven active listings, no pending sales and no sales. The average price of the $5,439,714 and a median price of $5,200,000. Only one of the seven listings is priced below last year’s high sale for the neighborhood. While the year is young, this is one area where homes are currently sitting.
Maui Following National Trends
The inventory crunch, short days on market and rising prices are not unique to Maui. This is a national trend. Mike Simonsen of Altos Research tracks this on a weekly basis and he reported new national lows for inventory last week.
It’s worth reading through Mike’s whole thread. He also touches on Interest rates. Speaking of rates…
Rising Interest Rates
Mike’s thread mentions the impact of rates on the market. On a national level, the market appears to be relatively unfazed by the raise in rates. It hasn’t been insubstantial. Talking to one Maui lender today, she indicated rates are up .5 to .6 percent over the lat 45 days and .35% in just the last 15 days. With rates predicted to rise further, it will be interesting to watch the market overall and the lower price points in particular. Maui residents are already struggling with affordability.
The Vacation Rental Condo Market
One of the stronger areas of the Maui market is vacation rental condos. Low inventory and strong demand is pushing prices up. Last week, I came upon an an analysis that claimed Maui is the best market for vacation rental investments in 2022. I have to say, I question that analysis. There is no doubt Maui is a desirable place to own a vacation rental condo, but that isn’t based on rental returns. It seems if anything that the vacation rental market is doing well in spite of rental returns. While rental rates are going up, they aren’t quite keeping up with appreciation. Buyers looking at proformas for vacation rental condos are finding mostly 2-3% CAP rates. It seems like more buyers are looking at their condos as use assets where income helps to defer a portion of the costs.
Last Day for Hoku’ula Lottery Registration
Tomorrow is the last day to register for the Hoku’ula market rate housing lottery . This Upcountry subdivision will bring a significant amount of new inventory to market over the next year. There are already 98 workforce housing homes under contract with 98 market units coming. The price point for the homes available range from $1,285,000 to $1,650,000. The neighborhood offers good views, new construction, and about as convenient an Upcountry location as you could find.
Contact The Maui Real Estate Team
We hope this first edition of the Maui Market Musings offer some insight into current conditions. Contact The Maui Real Estate Team if there are any subjects you want us to touch on or if you need assistance. We look forward to being of service.
Maui Real Estate Blog
Ka’anapali 2011 Mid Year Real Estate Statistics
This is part of my ongoing look at how a handful of Maui community real estate markets performed at the halfway point for 2011. This post looks specifically at Ka’anapali Resort. Included are statistics on sales volumes, medians, bank owned sales and short sales. I also have included information on sales volume at individual Ka’anapali condo complexes. Without further ado, here are the stats followed by a few thoughts on the significance of these numbers.
There were 20 home sales reported in Ka’anapali during the first half of 2011. The median sales price for those transactions is $1,018,500. By comparison, there were 11 sales during the first six months of 2010 at a median sales price of $1,300,000. This translates to an 82% increase in sales volume and a 22% decrease in median prices.
- The highest sales price during the first half of 2011 was $3,305,000. During the same period of 2010, the high was $4,500,000.
- The low sales price for the first six months of 2011 was $700,000.
- Of the twenty sales reported, MLS records indicate that thirteen were all cash transactions.
- There were four REO sales and three short sales during the first half of 2011. There were only two short sales in 2010.
There were 32 condo sales reported within Ka’anapali Resort during the first 6 months of 2011. The median price for those sales was $562,000. The tally for the first half of 2010 was 31 sales at a median of $490,000. That translates to a rather modest increase in sales volume of 3% and an increase in median of 15%.
- The high sales price for a condo was $3,700,000 for a unit at Ka’anapali Ali’i. The high for the same period last year was $3,400,000. This was also for an Ali’i unit.
- The lowest sales price was $150,000 for a Bank Owned Leasehold unit at Kaanapali Royal.
- That Ka’anapali Royal Sale was one of four REOs that closed in Ka’anapali during the first half of 2011. There were also two short sales. By comparison, there were three REOs and one short during the same period in 2010.
- Leasehold sales increased in 2011 with six sales compared to two during the first half of 2010.
Ka’anapali’s land market was the most active of the resort land markets during the first half of 2011 with 13 sales at a median price of $525,000. That compares to 4 sales at a median of $487,500 for the first half of 2010. That is a 325% increase in volume and approximately an 8% increase in median.
- The high sale for the first half of the year was $800,000 for a lot in the Pinnacle.
- The low sale for the first half of the year was $275,000.
- Seven of the sales were REOs. All were in the Lanikeha subdivision in Ka’anapali.
There were a number of things that stood out with the Ka’anapali statistics. Overall, it was a solid first half of 2011 for the Ka’anapali Real Estate Market with all segments seeing increased activity. Home sales saw a healthy increase after a sluggish 2010. Part of the stems from a rise in buyer confidence and interest in the luxury market. Some of that increase also comes from some good opportunities. The first half of 2011 saw an uptick in bank owned listings and short sales at Ka’anapali Resort. As with other areas of the island, buyers have been seeking out values among shorts and REOs.
Looking at the land market, the big increase in sales volume and the big surge in foreclosures are both noteworthy. The focal point for land activity has been in the Lanikeha Development. This new development first came to market close to the peak. There were quite a few lots bought speculatively either for long term appreciation or for spec homes. Whether it was strategic default or financial challenges, a number of those speculative purchases ended up as foreclosures. The majority of the limited pool of buyers in the land market have placed value and opportunity at the top of their list of priorities when purchasing their properties. With prices half of peak market land prices, buyers have been attracted to the opportunities presented by the REO listings at Lanikeha.
On the condo side, it is worth noting that the stats provided above include only properties that are within the traditional confines of Kaanapali Resort. I decided to exclude a couple of properties like Honua Kai, Mahana and Ka’anapali Shores that are frequently lumped in with the Ka’anapali stats through the Realtors Association of Maui. I did this for two reasons. Honua Kai sales were going to really distort the stats due to what I have dubbed the Honua Kai Effect. There has been a significant volume of sales at this complex over the last couple of years. The vast majority of those sales were based on pre-construction contracts that were originally executed sometime between 2005-2007. If you include Honua Kai closes, there were far more sales in Ka’anapli during the first half of 2010 than there were in the first half of 2011. These long term contract Honua Kai closes do not provide a good indication of active buyers shopping during each particular year. Instead, these long term new developer contracts are closing when construction was completed and the buyers are able to take occupancy. I decided not to include Ka’anapali Shores and Mahana because they are categorized inconsistently. They are also listed as Honokowai properties by Realtors.
When you focus on just the core Ka’anapali condo sales figures, the first half of 2011 was almost a mirror of 2010. There were a few changes in the composition of sales. While there were no bank owned transactions in 2010, there were three bank owned sales in 2011. Leasehold sales were up two in the first half of 2010 to 6 in the first half of 2011. There were also some shifts in which complexes were most active. The greater impact of bank owned properties is significant, but I am reticent to put too much weight into other shifts in market activity. This is a pretty small sample size and we may just be seeing fluctuations in activity based on the quality of inventory or more random variables.
Contact The Maui Real Estate Team if you have questions about these statistics or if you need assistance buying or selling Ka’anapali Properties. You can also search the current inventory of Ka’anapali Homes for Sale and Ka’anapali Condos for Sale on MauiRealEstate.com.