Tag: Ma'alaea Condos

Well, we made it to our twentieth Market Musings. This post took me a while to put together. I want to say it’s because it is chock full of tremendous insight. The truth is my last 9-10 days consisted primarily of battling Covid. My symptoms made writing this post a protracted slog. Give me some grace if there are typos and/or a few not so coherent thoughts interspersed throughout the text.

In our last post, I talked about the relative resilience of the Maui market under higher rates. Since that time, rates rose even more. The additional bump in rates or perhaps just a longer duration of time with higher rates is weighing on the Maui market. The single family home market in particular is feeling the burden of higher rates and decreased affordability. Musings 20 takes a look at some of the current market indicators including active and pending inventory, price reductions and how quickly new listings are going under contract.

End of October Maui Single Family Home Inventory

	8/31/22		9/31/22		10/31/22
	Active	Pending	Active	Pending	Active	Pending
<$750,000	11	11	7	14	9 (+1)	15 (+1)
$750,000-$999,999	31	44	21	46	29 (+8)	29 (-15)
$1,000,000-$1,499,999	58	28	45	33	64 (+19)	28 (-5)
$1,500,000-$1,999,999	46	13	44	17	41 (-3)	13 (-4)
$2,000,000-$2,999,999	36	12	33	12	35 (+2)	10 (-2)
$3,000,000-$4,999,999	32	11	35	11	32 (-3)	7 (-4)
$5,000,000-$9,999,999	26	5	27	6	26 (-1)	5 (-1)
$10,000,000-$19,999,999	11	0	11	0	9 (-2)	0
$20,000,000+	5	0	2	1	3 (+1)	1
Totals	256	124	225	140	248 (+23)	108 (-32)

	8/31/22		9/30/22		10/31/22
Haiku	20	7	24	7	28(+4)	9 (+2)
Hana	8	2	9	1	10 (+1)	0 (-1)
Ka’anapali	10	4	10	3	7 (-3)	2 (-1)
Kahului	11	25	7	26	16 (+9)	16 (-10)
Kapalua	4	1	4	0	6 (+2)	0
Kihei	44	16	35	16	40 (+5)	11 (-5)
Kula	24	10	22	11	20 (-2)	11
Lahaina	23	7	21	10	22 (+1)	13 (+3)
Makawao	15	11	13	11	13	9(-2)
Napili/Kahana/Hono…	14	4	9	7	11 (+2)	6 (-1)
Pukalani	8	5	6	7	8 (+2)	3 (-4)
Spreckelsville/Paia	15	3	10	4	8 (-2)	2 (-2)
Wailea/Makena	16	4	10	8	11 (+1)	4 (-4)
Wailuku	41	22	36	26	40 (+4)	21 (-5)

End of October Home Inventory Review

The information above is provided with the usual framework. The home inventory data by price point includes all of the island of Maui, but excludes the islands of Molokai and Lanai. The district information is limited to the districts and community with the most activity.

• After a pretty healthy drop in Inventory in September, active home listings increased by 10.22% by the end of October.
• The bulk of the inventory increased occurred between $750,00 and $1,500,000 with an increase of 27 listings in that range.
• It appears that this increase in inventory stems more from slower activity than an influx of new listings. That is reflected in the pending sales data with 20 fewer pending home sales between $750,000 and $1,500,000.
• This make sense as this is an area of the market where a higher percentage of buyers are using financing. Looking at all of the sales between August 1 and October 30th, 18.93% of the buyers in this price range paid cash. In all other price ranges, 41.77% of buyers used cash. Plain and simple, the increase in mortgage rates is hitting this segment of the market harder.
• Overall, the number of pending home sales decreased 22.86% between the end of September and the end of October. That is a substantial decrease, but worth noting that pending sales typically decline in the fall.
• Looking at the market on a community level, all but three districts increased inventory. The exceptions being Kula, Spreckelsville/Paia and Ka’anapali. Ka’anapali’s decrease stemmed in part due to cancelled listings rather than increased sales.
• Kahului experienced the biggest increase in active listings and the biggest decrease in pending sales. With the vast majority of the inventory in this community priced between $750,000 and $1,300,000, this is a market where the increased rates appear to causing a bigger shift in conditions.

End of October Condo Inventory

	8/31/22		9/30/22		10/31/22
	Active	Pending	Active	Pending	Active	Pending
<$250,000	1	6	1	3	2 (+1)	4 (+1)
$250,000-$499,999	14	17	11	16	19 (+8)	12 (-4)
$500,000-$749,999	34	43	28	40	32 (+4)	35 (-5)
$750,000-$999,999	33	43	33	33	27 (-6)	27 (-6)
$1,000,000-$1,499,999	29	31	19	36	21 (+2)	30 (-6)
$1,500,000-$1,999,999	24	35	18	34	14 (-4)	33 (-1)
$2,000,000-$2,999,999	22	38	14	43	15 (+1)	40 (-3)
$3,000,000-$4,999,999	12	19	10	17	10	17
$5,000,000-$9,999,999	8	1	7	0	11 (+4)	1 (+1)
$10,000,000+	4	0	4	0	3 (-1)	1 (+1)
Total	181	233	145	222	154 (+9)	200 (-22)

	8/31/22		9/30/22		10/31/22
	Active	Pending	Active	Pending	Active	Pending
Ka’anapali	25	16	17	14	18 (+1)	9 (-5)
Kahului	3	7	3	4	5 (+2)	5 (+1)
Kapalua	11	6	10	4	12 (+2)	4
Kihei	50	63	48	61	43 (-5)	60 (-1)
Lahaina	9	10	5	7	8 (+3)	4 (-3)
Ma’alaea	3	6	4	4	3 (-1)	6 (+2)
Napili/Kahana/Hono…	45	25	29	30	33 (+4)	17 (-13)
Wailea	24	86	19	86	19	85 (-1)
Wailuku	9	14	8	12	11 (+3)	10 (-2)

End of October Condo Inventory Review

Again, the tables above come with the usual framework for our end of month inventory. The table by price point includes all condos on Maui, but it does not include condos on the islands of Molokai or Lanai. The table with districts is limited to the communities with the most activity.

Pending sales at La’i Loa at Wailea Hills skew the data in Wailea and the $1,500,000-$5,000,000 price ranges. There are 75 pending sales in that development based on contracts penned in 2020 and the first quarter of 2021. Pending sales in La’i Loa won’t start to close until sometime in 2023. Paradise Ridge Estates in Kihei also skews the data albeit to a lesser extent. There are 18 pending sales with that development based on contracts penned between 2018 and the first quarter of 2022. Overall, 46.5% of the pending Condo inventory is in La’i Loa or Paradise Ridge Estates.

• After three straight months of decreased inventory, condo inventory increased by a modest 6.2%
• The largest increase in inventory occurred in the $250,000 to $499,999 price range. While this price range has a lower percentage of cash buyers than the overall condo market, the difference isn’t all that substantial.
• Active inventory increased in 6 out of 10 price ranges, decreased in three and stayed the same in one.
• Pending sales decreased 9.91% this month. As with home sales, it isn’t too uncommon to see pending sales decrease this time of year.
• The decrease in pending condo sales by price point was fairly consistent through most ranges, with the exceptions being the very lowest price range and the very highest price points in the market.
• At the community level, modest increases in inventory were common across the board. The two districts that actually saw a decrease in inventory at the community level were Ma’alaea and Kihei. Both are markets with a lot of vacation rentals. This is a market segment that is still seeing decent demand.
• Napili, Kahana and Honokowai experienced the biggest drop in pending sales. This is another big vacation rental condo market. Is the difference in activity levels a case of no clear narrative or just variability? This is something to watch with next month’s numbers.

How Quickly Are Properties Going Under Contract

One other metric we use on the blog to track market demand is how quickly properties are going under contract. Specifically, what percentage of new listings are going under contract in ten days or less. The very first time we started documenting this metric was back in February. At that point, 56% of all new listings went under contract within 10 days or less. Between September 12th and 19th, that number shrank to 34%. Between October 11th-18th, the number of properties that went under contract within 10 days or less fell further to 25.58%.

When you break it down by homes and condos, you can see that condos continue to show some measure of resilience. For condos listed between October 11th and 18th, 40% went under contract with buyers in ten days or less. That’s actually up from mid September when the number was 36.66%. For additional context, 66.67% of condos went under contract in 10 days or less between October 11th and 18th, 2021. Going back to 2019, 26% of all condos listed between October 11th and 18th went under contract in 10 days or less.

The numbers for the home market point to a more pronounced cooling. Only 13.04% of all homes listed between October 11th and 18th went under contract in 10 days or less. In mid-September, that number was 32.14%. For additional context, 54.17% of homes listed between October 11th and October 18th, 2021 went under contract in tend days or less. Going back to 2019, 9.09% of all homes listed between October 11th and October 18th, went under contract in ten days or less.

Price Reductions

One market indicator that surprised this month is the number of active listings with price reductions. Nationally, price reductions continue to rise as the real estate market slows under the weight of higher interest rates. Based on the numbers above, one might expect to see more price reductions, particularly with the home market. With fewer properties going under contract quickly and fewer properties going under contract in general, shouldn’t sellers be adjusting to the market?

As of the the 31st, 90 of 248 active home listings or 39.92% reduced their price one or more times. On September 29th, 42.41% of homes went under contract in 10 days or less. On September 2nd, 42.97% of all active listings had one or more price reduction.

On the condo front, 45 of 153 or 29.41% of active condo listings on October 31, 2022 reduced their price one or more times. That’s up from 25% on September 29th. On September 2nd, 27.84% of all active condo listings had price reductions.

Some General Thoughts on the Numbers Above and The State of The Market

It’s been an interesting last six months in the Maui Real Estate market. The first quarter of the year was largely a continuation of 2021. Strong demand combined with limited inventory to fuel strong price growth. Demand slowly started to taper in the second quarter. That said, inventory remained low. While the frenzy of the first quarter subsided, there was a balance between limited supply and just enough demand to make for a competitive market for buyers. While we were well below the frenzy of earlier in the year, homes and condos in particular sold faster and at a higher percentage of asking price than they would in a normal market.

This trend of a balanced ratio between buyers and sellers continued through the summer. Inventory actually contracted through most of the summer, but we lost FOMO (fear of missing out) buyers from the market. The lack of FOMO buyers had an impact. We started to see some downward pressure on values in limited parts of the market. With a discerning buyer pool, flawed properties that would have sold easily in the first quarter weren’t getting any love from buyers.

In my last musings, I showed stats that pointed to the relative resilience of this market despite rates well over 6%. The stats above point to a further shift downward in the market . Or at least two out of three did. The third is a reflection of Maui as a real estate market as a whole.

The increase in inventory and the decrease in pendings show a market where the balance in supply and demand is starting to shift. This is less due to an influx of new inventory as much as it is to decreased demand. When you look at the number of homes going under contract within 10 days or less, you can see where the push above 7% rates is starting to decrease the number of buyers. I am sure the more negative national real estate news is also having an impact on the buying decisions of some. Fomo has been replaced by wait and see.

The decrease in price reductions is the one anomaly in this market. As the market cools, you would expect sellers to adjust. Prior to Covid, Maui’s market dynamics were different than the typical mainland market. Sellers took time to adjust prices and days on market could really pile up before a listing was considered stale. It’s also worth remembering that this shift is pretty recent. We may need to see these conditions persist for a longer before more sellers begin to adjust prices.

The one other thing to note is that while we saw a shift in market conditions in these most recent stats, conditions remain variable. That’s pretty clear when we look at the difference between homes and condos. As of mid-October, new condo listings still went under contract much faster than they did pre-Covid. Condo inventory remains tight compared to demand and the volume of cash buyers blunts the impact of higher rates.There is variability in the home market too. The luxury market, which again includes a higher percentage of cash buyers, appears to be moving relatively well.

Looking forward, it will be interesting to see where the market goes from here. Since it’s taken me longer to write this blog post, I have the advantage of watching market conditions over the first ten days of November. While I haven’t crunched the numbers in any detail, pending sales stabilized to start the month. Yesterday’s inflation print out caused a shift in the bond market and mortgage rates to drop a half a point.Will that persist or will higher rates return? Needless to say, it’s too early tell. If anything, this points to continued weird market dynamics with a lot of variability in conditions.

A Little Maui Beauty to Brighten Your Day

It may not be Monday but…

It's Monday- we're mentally here. Via @HIOceanProject pic.twitter.com/gzQN8hpHwr

— Maui Hawaii (@Maui) November 7, 2022

Contact The Maui Real Estate Team

Variable market conditions and general market weirdness demand quality representation. Contact the Maui Real Estate Team to talk to one of our experienced agents if you are thinking of buying or selling Maui Real Estate. One of our healthy agents will be happy to learn more about your real estate needs. We look forward to being of assistance.

It’s been a few weeks since our last Maui Market Musings. With that in mind, this post delves into the numbers that help cast a light on current Maui market conditions. Since our last post, interests rates surged higher again putting additional pressure on affordability for some buyers. This post looks at what impacts if any higher rates are having on the Maui market. We also look at current inventory levels by price point and community. Other subjects for discussion include cancellations, price reductions and the recent market response to new listings. This is a longer read so you may want to grab your favorite caffeinated beverage before proceeding further. It is not advisable to operate heavy equipment after reading.

Interest Rates

It’s hard not to lead with interest rates when discussing the state of the market. Rates continued their climb since our last update. While they fluctuate daily, they’ve been somewhere between 6.5% and just over 7% over the last few weeks. Needless, to say, we are a long way from the sub 3% interest rates we saw during periods of 2021. For those hoping that this increase is going to be short lived, the recent comments of Fed Chair Jerome Powell suggest that is unlikely to be the case. Powell said higher rates are needed to bring about a “correction” and balance to the housing market. While the Fed doesn’t directly control mortgage rates, they can exert a strong influence with changes to the Federal Funds rate.

Higher rates (even rates lower than current rates) were already impacting real estate markets around the country. Values are starting to retreat in many markets, particularly in some of the frothiest markets of the last couple of years.

So what kind of impact are we seeing on Maui from higher rates? There are a couple of numbers that we look at in this musings that might reflect the impact of higher rates. Pending sales is one with decreased affordability likely to impact the number of buyers. Price decreases is another metric that would or should reflect sellers adjusting to decreased buyer demand. Keep reading to see what those numbers look like recently on Maui.

Maui Home Inventory

	7/31/22		8/31/22		9/30/22
	Active	Pending	Active	Pending	Active	Pending
<$750,000	11	14	11	11	7 (-4)	14 (+3)
$750,000-$999,999	25	62	31	44	21 (-10)	46 (+2)
$1,000,000-$1,499,999	65	34	58	28	45 (-13)	33 (+5)
$1,500,000-$1,999,999	41	19	46	13	44 (-2)	17 (+4)
$2,000,000-$2,999,999	31	19	36	12	33 (-3)	12
$3,000,000-$4,999,999	25	9	32	11	35 (+3)	11
$5,000,000-$9,999,999	24	7	26	5	27 (+1)	6 (+1)
$10,000,000-$19,999,999	12	0	11	0	11	0
$20,000,000+	5	1	5	0	2 (-3)	1 (+1)
Totals	239	156	256	124	225 (-31)	140 (+16)

	7/31/22		8/31/22		9/30/22
	Active	Pending	Active	Pending	Active	Pending
Haiku	22	11	20	7	24 (+4)	7
Hana	4	1	8	2	9 (+1)	1 (-1)
Ka’anapali	10	7	10	4	10	3 (-1)
Kahului	13	21	11	25	7 (-4)	26 (+1)
Kapalua	5	1	4	1	4	0 (-1)
Kihei	48	14	44	16	35 (-9)	16
Kula	19	16	24	10	22 (-2)	11 (+1)
Lahaina	18	14	23	7	21 (-2)	10 (+3)
Makawao	14	9	15	11	13 (-2)	11
Napili/Kahana/Hono…	10	6	14	4	9 (-5)	7 (+3)
Pukalani	7	6	8	5	6 (-2)	7 (+2)
Spreckelsville/Paia	10	2	15	3	10 (-5)	4 (+1)
Wailea/Makena	15	5	16	4	10 (-6)	8 (+4)
Wailuku	39	35	41	22	36 (-5)	26 (+4)

End of September Home Inventory Review

The information above is provided with the usual framework. The home inventory data by price point includes all of the island of Maui, but excludes the islands of Molokai and Lanai. The district information is limited to the districts with the most activity.

• The inventory of active homes fell 12.2% between the last day of August and the last day of September.
• Active inventory decreased in all price ranges below $3,000,000. There was a modest increase in inventory between $3,000,000 and $10,000,000, no change between $10,000,000 and $19,999,999, and a decrease in inventory above $20,000,000.
• Pending sales activity increased 12.9% over last month! This is a surprising reverse of recent trends. It is an especially big surprise with the recent mortgage rate increases.
• The biggest increase in pending sales occurred below $2,000,000. Above that price range the number of pending sales was either steady or increased by one. No price ranges experienced a decrease in pending sales activity. It is worth noting that the $10,000,000 to $19,999,999 range had no pending sales as of the end of August and still has no pending sales.
• Looking at the different communities around the island, only two communities saw an increase in inventory. Haiku and Hana both saw modest increases in active listings. Anecdotally, it seems like some sellers in these windward communities try to get homes on to the market before the start of the rainy season later in the fall. I haven’t taken the plunge to determine if there is any quantitative evidence to support that claim.
• After seeing big growth in inventory in late Spring and early Summer, Kihei saw the biggest decrease in active inventory for the second month in a row. Notably, the total number of pending sales in Kihei did not change. With that in mind, I decided to look a little closer at the Kihei market activity. While Kihei added 8 new pending sales this month, 7 sales closed, 8 listings cancelled and 2 expired. Only 4 new listings came to market. Based on those numbers, the reason for the decrease in inventory is multi-faceted. The cancellations could be a sign of seller capitulation (more on that below) or just sellers taking a break. We shall see.
• Wailea and Wailuku are the two communities that saw the biggest increase in pending sales with 4 net new pendings. Wailea’s increase is a little more notable due to the percentage increase in pending sales. It’s worth mentioning that 4 of the 5 overall new pending sales in Wailea and Makena reduced prices before going under contract. There’s something to be said for listening to market feedback and adjusting price.

Maui Condo Inventory

	7/31/2022		8/31/2022		9/30/2022
	Active	Pending	Active	Pending	Active	Pending
<$250,000	1	8	1	6	1	3 (-3)
$250,000-$499,999	11	23	14	17	11 (-3)	16 (-1)
$500,000-$749,999	43	39	34	43	28 (-6)	40 (-3)
$750,000-$999,999	44	43	33	43	33	33 (-10)
$1,000,000-$1,499,999	30	31	29	31	19 (-10)	36 (+5)
$1,500,000-$1,999,999	30	33	24	35	18 (-6)	34 (-1)
$2,000,000-$2,999,999	20	36	22	38	14 (-8)	43 (+5)
$3,000,000-$4,999,999	12	18	12	19	10 (-2)	17 (-2)
$5,000,000-$9,999,999	10	3	8	1	7 (-1)	0 (-1)
$10,000,000+	4	0	4	0	4	0
Totals	205	234	181	233	145 (-36)	222 (-11)

	7/31/2022		8/31/2022		9/30/2022
	Active	Pending	Active	Pending	Active	Pending
Ka’anapali	24	13	25	16	17 (-8)	14 (-3)
Kahului	2	8	3	7	3	4 (-3)
Kapalua	10	10	11	6	10 (-1)	4 (-2)
Kihei	67	60	50	63	48 (-2)	61 (-2)
Lahaina	16	8	9	10	5 (-4)	7 (-3)
Ma’alaea	5	6	3	6	4 (+1)	4 (-2)
Napili/Kahana/Hono	40	34	45	25	29 (-16)	30 (+5)
Wailea	25	82	24	86	19 (-5)	86
Wailuku	14	13	9	14	8 (-1)	12 (-2)

End of September Condo Inventory Review

Again, the tables above come with the usual framework for our end of month inventory. The table by price point includes all condos on Maui, but it does not include condos on the islands of Molokai or Lanai. The table with districts is limited to the communities with the most activity. Pending sales at La’i Loa at Wailea Hills skew the data in Wailea and the $1,500,000-$5,000,000 price ranges. There are 75 pending sales in that development based on contracts penned in 2020 and the first quarter of 2021. Pending sales in La’i Loa won’t start to close until sometime in 2023. Paradise Ridge Estates in Kihei also skews the data albeit to a lesser extent. There are 18 pending sales with that development based on contracts penned between 2018 and the first quarter of 2022. Overall, 41.89% of current pending sales are long term new developer contracts.

• The number of active condo listings at the end of September is 19.89% lower than at the end of August.
• Active inventory decreased in seven out of ten price ranges in the table above. Net inventory was unchanged in the remaining 3 ranges.
• Pending condo sales dropped 5.2% compared to the end of August. Is this a reflection of reduced inventory, reduced demand or both? It’s hard to say. That said, I did get a surprising number of e-mails last month from fellow Realtors seeking out condo inventory for buyers struggling to find what they want.
• Pending sales dropped in seven of ten price ranges. Pending sales increased between $1,000,000-$1,499,999 and $2,000,000 and $2,999,999.
• Ma’alaea is the only community where inventory increased last month albeit with just one more active listing than at the end of August. Kahului’s inventory is unchanged.
• Napili, Kahana and Honokowai experienced the biggest decrease in inventory with 16 fewer listings at the end of this month. It was also the only community where pending sales increased. The eighteen new pending sales shows pretty healthy activity. It seems that the increase in pending sales is the biggest driver for the decrease in active listings in this market, but cancelled listings were also a factor. Seven sellers pulled their listings off the market.

Cancelled Listings

September is a transitional month on Maui. The summer tourism season is over and we are still a few months from our peak winter season. Anecdotally, I always thought of this as a month where some sellers will opt to take a pause from selling their home only to relist when it gets closer to winter tourism season. With the sharp decrease in active listings this month, I wanted to look closer at cancelled and expired listings. Is September actually a bigger month for cancellations historically? If so, how does this year compare to previous years? Is there anything that can be gleaned from this September’s high cancellations?

	2022	2021	2019	2018	2017
January	27	23	48	37	55
February	21	9	41	43	34
March	18	15	39	36	58
April	19	17	37	39	77
May	13	22	48	40	89
June	19	16	31	27	53
July	17	22	40	30	58
August	27	16	25	44	62
September	40 (1)	28 (2)	39 (t6)	50 (1)	41 (11)
October	TBD	16	37	47	60
November	TBD	30	36	47	60
December	TBD	20	43	29	45

	2022	2021	2019	2018	2017
January	19	55	27	42	55
February	13	54	38	15	34
March	12	54	27	41	58
April	14	35	43	38	77
May	15	21	54	37	89
June	11	20	37	26	53
July	11	16	23	43	58
August	20	19	21	27	62
September	29 (1)	13 (11)	43 (t2)	44 (3)	41 (11)
October	TBD	15	37	49	60
November	TBD	15	40	65	60
December	TBD	11	30	41	45

Before discussing the numbers above, it is worth noting that there is some noise when it comes to cancelled listings. An agent changing brokerages or one brokerage buying another can inflate cancelled listings. The change in brokerages results in cancelled listings immediately replaced by new listings as old listing contracts are cancelled and new contracts created. I noticed some noise in this month’s cancelled home listings. Hoku’ula, a new development Upcountry, cancelled their MLS listings last month and put them back on the market as new listings at a higher price.

With that framework, let’s address the first question that I posed above. Is September a bigger month historically for cancellations? It appears to be one of the biggest months for canceled home listings albeit with some notable exceptions in the chart above. For condos, it is a little more extreme. Some years it is near the top and others near the bottom with no clear cut reason for the variability.

So what does that say about this year? Even without those five Hoku’ula cancellations, September would still be the highest month for home cancellation for the year to date. September is also leading for cancelled condo listings despite rather limited inventory. It’s hard to say definitively if this is strictly seasonal or if any of those cancellations are due to seller capitulation. That said, it would make sense if we start to see some sellers retreat from the market for non-seasonal reasons. Sellers who were fishing for ultra high prices, don’t need to sell or need to borrow at higher rates to buy a new place could all have reason to pull their listing under current conditions.

Price Reductions

Recent increases in interest rates are generating more price reductions nationally. Sellers are reacting to the decreased affordability posed by higher rates. What about the Maui market? Are we seeing similar trends? I looked at price reductions for active inventory on September 29th.

As of the 29th, 95 out of 224 active listings or 42.41% of all properties reduced their price one or more times. As of September 2nd, that numbers was 42.97%. On August 15th, it was 39.67%. While price reductions are up since the early summer, the more recent decrease in price reductions is somewhat surprising in light of the recent increases in rates.

On the condo front, 36 out of 144 active listings reduced their price one or more times. That calculates to 25% of active inventory. That is down from 27.84% on September 2nd and 29.62% of all listings on August 15th.

With inventory shrinking, perhaps sellers are feeling emboldened to stick to their guns on pricing. The higher level of cash and or low inventory levels seem to be making this market less responsive to interest rate changes thus far.

How Quickly Are New Listings Going Under Contract?

Another metric we continue to watch in the musings is how quickly things are going under contract. Specifically, what percentage of listings are going under contract within 10 days or less. We started tracking this in mid-February when the number was right around 56%. That was pretty much the peak of our winter frenzy. For properties that were listed between September 12th and 19th, 34% of all listings went under contract within 10 days. That is actually up from 29.79% between August 10th and 17th.

For home listings, 32.14% of new listings between September 12th and September 19th went under contract within 10 days or less. By comparison, 38.1% of all homes listed between 9/12/21 and 9/19/21 went under contract in 10 days or less. For a pre-covid comparison, 41.18% of all homes listed between 9/12/19 and 9/19/19 went under contract within 10 days or less. It is worth mentioning that 41% is a much higher percentage than other weeks we’ve looked at in 2019. For example, only 19.04% of homes listed between 9/27/2019 and 10/3/2019 went under contract in 10 days or less.

For condo listings, 36.36% of all new listings went under contract within 10 days between September 12th and 19th. Last year, an eye popping 67.74% of condos listed between 9/12 and 9/19 were under contract in ten days or less. In 2019, 27.27% of all condos listed between 9/12 and 9/19 went under contract within 10 days or less.

Overall, the market is way less frenzied than last year. However, properties are going under contract faster than in a “normal” Maui market. There are definitely fewer buyers, but there are enough buyers out there for the limited supply that over one third of the inventory is going under contract quickly.

A Few Closing Thoughts on the State of the Maui Market

The numbers compiled above paint a picture of a more resilient Maui market than one might expect. We actually saw fewer price reductions for homes and condos while pending home sales increased! Not exactly the market response one would predict when interest rates increase to their highest point in 15 or more years. It appears at this point that limited inventory is still having a significant impact on the market despite the rising borrowing costs.

Will that sustain itself through the rest of the year and into early 2023? I was suprised by this month so who knows what the future will hold. It’s likely that the market has yet to feel the full weight of higher interest rates. Add in signs of a slowing economy and our market is facing additional headwinds. Ultimately, the Maui market moving forward will be a balancing act between the impact of higher rates and supply constraints. Conditions well vary around Maui by both price point, location and property type.

With interest rates likely to remain elevated into the immediate future, more real estate economists are anticipating price corrections. Reading beyond the headlines, economists expect variability in market corrections across the country. Rates will be a market driver, as will the state of the economy and local inventory. It’s important not to base market decisions on national headlines, but instead on relevant local data. We plan to continue with our Musings and community market updates so Maui buyers and sellers have the data to make informed decisions.

A Little Maui Beauty to Brighten Your Day

#FridayFeeling: Aloha 🤗💗🌺🏝

NEW dose of #Hawaii #calm: https://t.co/vHfJIYL4Kl

📍 Big Beach, #Maui pic.twitter.com/nuHWkx097S

— Tranquilitee (@MyTranquilitee) September 30, 2022

Contact The Maui Real Estate Team

Questions about the post above? Wondering about conditions in a specific part of the Maui Market? Need assistance buying or selling a property on Maui? Contact The Maui Real Estate Team for assistance. One of our experienced and savvy agents would welcome the chance to sit down with you to discuss your real estate needs.