Tag: Mahana Estates
Maui Real Estate Blog
Kapalua September 2022 Market Update
By some margin, 2021 was the busiest year ever for transaction volume at the Kapalua Resort. Now that we are two-thirds of the way through 2022, we thought it might be a good time to check on market activity in this resort community located on Maui’s northwest coastline. This update looks at sales volume, pricing and more. It also looks at the outlook for the rest of the year and a slightly more long range outlook as the market slowly transitions back to “normal”.
Kapalua Home Market Numbers
The numbers below represent notable numbers for year to date home sales activity in Kapalua through September 5th, 2022.
- Maui Realtors reported 12 home sales over the last eight plus months. That is 50% of the 24 sales reported during the same period of 2021, and 25% below the 16 sales during the same period of 2019.
- Limited inventory played a pretty big role in the decreased sales volume compared to last year. While reduced demand may also be a factor, that is harder to show via the statistics.
- Two out of the twelve sales closed for over asking price. An additional four sales closed for full price meaning 50% of the transactions closed for asking price or higher. It is striking that only one of the 24 homes sold in the first eight months of 2021 sold for over asking price and only 3 more sales closed for asking price or above. Back in 2019, none of the year to date sales sold for full price let alone asking price.
- Of the twelve transactions, Realtors reported that seven of the buyers paid cash.
- The median price of the homes sold in Kapalua this year is $5,025,000. That is 25.31% higher than median of $4,010,000 for homes sold during the same period of 2021. It is 105% higher than the median sales price of $2,450,000 during the same period of 2019.
- The average price of the homes sold in Kapalua this year is $5,300,000. That compares to $4,886,354 and $2,364,000 during the same periods of 2021 and 2019 respectively. That means this year’s average is 8.47% and 124.2% higher than 2021 and 2019 respectively.
- The lowest priced home to sell for the year to date in Kapalua closed for $2,750,000. The 3 bedroom, 3.5 bathroom home in Pineapple Hill with 3,670 square feet of living space is located on a 10,703 square foot lot.
- The highest price sale for the year to date closed in August. The Pineapple Hill home has 6 bedrooms, 6.5 bathrooms and 7,784 square feet of living space on just under a half acre of land.
- Pineapple Hill tops the list for busiest subdivision for sales activity this year. Five homes closed in Pineapple Hill with two additional homes closing in Pineapple Hill Estates. Three homes closed in Plantation Estates and two homes closed in Mahana Estates. There’s been no inventory and no sales in Kapalua Place. There is one pending sale in Honolua Ridge.
Kapalua Condo Market Numbers
The numbers below are the most notable from Kapalua Condo sales through September 5th. It includes only condos in the complexes that are formerly located within the Kapalua resort and does not include condo developments that border Kapalua.
- Maui Realtors reported 51 condos sold for the year to date. That is 51.89% below the 106 sales reported through the same period of 2021. It is 15.9% more than the 44 closes during the same period of 2019.
- Again, it is pretty clear that constrained inventory played a role in the substantial decrease in sales compared to last year. It’s difficult to estimate the role decreased demand played in the lower number of sales. That said, it is worth pointing out that we had more sales this year with far less inventory than we did in 2019.
- Of the 51 sales, 12 or 23.53% sold for over asking price and 28 or 54.9% sold for asking price or above. By comparison, 3.77% and 30.19% of all 2021 sales over the same period sold for over asking price and at or above asking price respectively. Over the same period of 2019, 4.55% of all condos sold over asking with 34.09% selling for asking price or above.
- Of the 51 condos that sold thus far this year, Realtors reported that 24 out of 51 or 47.05% were cash transactions.
- The median price of the condos sold for the year to date is $1,450,000. Over the same period last year, the median was $1,145,000. That’s a 26.64% difference. The median during the same period of 2019 was $917,500. That is a 58% difference.
- The average price of condos sold in Kapalua through September 5th is $2,438,421. During the same period of 2021, the average price was 29.07% lower at $1,889,224. The difference in average between 2022 and the same period of 2019 is 15.50%. During that period, the average was $2,111,034.
- The lowest priced condo sale thus far this year in Kapalua closed for $940,000. That price bought the new owner a 1 bedroom, 2 bath with 972 square feet of living space in Kapalua Golf Villas.
- That was one of just three condo sales below $1,000,000!
- Kapalua’s highest condo sale for the year to date closed for $8,000,000 at Montage Kapalua Bay. That unit includes 3 bedrooms, 3.5 bathrooms and 2,904 square feet of living space.
- Kapalua Golf Villas was the busiest condo complex for transactions with 17 total sales. Montage and Kapalua Bay Villas came next with 9 sales each.
Outlook for the Rest of The Year in Kapalua
It’s time to get out the old crystal ball to see what we might expect in terms of sales activity in Kapalua for the rest of the year. Ok, ok maybe we will skip the crystal ball and try to use some other metrics that might give us some sense of market activity. When trying to gauge current market conditions, I like to look at demand for new listings and inventory.
Last month, five new condo listings came to market and one home came to market. Of the five condo listings, two were under contract in less than 10 days. That would appear to suggest that there is still some demand in the condo market. While overall demand on island might be feeling a crunch from interest rates, Kapalua is less likely to be rate sensitive. Keep in mind that just under 60% of this year’s home sales and just under 50% of this year’s condo sales in Kapalua were cash transactions.
The current inventory of listings remains limited. There are only 11 active condo listings in Kapalua and 4 pending sales as of September 5th. When you break it down by condo complex. There are no active listings in the Ironwoods or Coconut Grove. Both Kapalua Ridge and Kapalua Golf Villas have one active listing each and the Bay Villas has two listings. Only the Ritz Carlton Residences with three listings and Montage with four listings have any significant depth of inventory. On the home front, there are just five active home listings with one pending home sale.
One last factor to consider is seasonality. The charts below shows Kapalua home and condo pending sales by month in 2022, 2021, 2019 and 2018. In all of those years, the last four months of the year tend to see fewer properties going under contract.
Based on the inventory, demand and past seasonality, I would expect that sales activity for the rest of the year will be quieter than the first eight months. That said, I would venture there should be some demand for the limited inventory particularly in the the lower price points of the condo market.
Longer Term Kapalua Outlook
I mentioned at the start of the Kapalua discussion, that Kapalua was one of the markets that saw the greatest increases in demand over the last couple of years. That comes after a decade where Kapalua saw lesser demand than other resort markets. While Kapalua has always had its share of loyal fans, it tended to be a slower market. Days on market were longer and sales volume was lower. That started to shift a little at the end of the decade and it changed completely with Covid. As the market slowly moves toward normal, what does “normal” actually look like?
Maui Prep helped fuel part of Kapalua’s Covid period boom. The school was able to scale up enrollment to accommodate a large number of affluent families who took advantage of the work from anywhere movement. Many of those families ended up buying homes in Kapalua or other nearby areas of West Maui. The question of how much ongoing demand there will be from affluent remote workers remains something of an unknown.
I recently had the opportunity to pose the question about the future of the Kapalua market to an agent who lives and works in the community. I thought her answer offered some interesting insights. While Maui Prep came up, she also discussed the role of the Montage and the Ritz. She pointed out that the closure of the Kapalua Bay Hotel in 2006 and construction projects at the Ritz limited places to stay and the overall appeal of the area during the latter half of the 2000s. The foreclosure on the Ritz Carlton Club in 2013 didn’t help. When the Ritz Carlton Club redeveloped and rebranded as the Montage in 2014, it brought in new vacationers. Many of them developed loyalty to Kapalua and eventually became second home owners.
With those two anchor properties, the other agent thought this would provide a solid foundation for future demand in the community. For this and other reasons, she is very much a Kapalua Bull over the long term. It was an interesting answer and one I thought might be worth sharing with our readers.
Contact The Maui Real Estate Team
We will continue to provide periodic updates on the Kapalua market on this blog. If you are interested in Kapalua Properties, you can find the current inventory of Kapalua Homes for Sale and Kapalua Condos for Sale on MauiRealEstate.com. Contact The Maui Real Estate Team if you have questions on any of the listings or need assistance buying or selling a property in Kapalua.
Maui Real Estate Blog
Maui Real Estate Musings Volume XIV
Welcome to Maui Real Estate Musings Volume XIV! The fourteenth edition of the musings looks back at some of the notable numbers from the June 2022 Maui Real Estate Statistics. There is also an in-depth look at the land market during the first half of 2022. Without further ado…
Notable Numbers from the June Maui Real Estate Statistics
The numbers below are from just the island of Maui. They do not include sales from the islands of Lanai or Molokai. For that reason, they are a little different than the Realtor’s Association of Maui Statistics. It is also worth keeping in mind that these numbers look backwards in terms of market demand. The sales are based primarily on contracts written earlier in the spring from March through May.
June Home Sales
- Maui Realtors reported 83 homes sold in June of 2022. That is down 25% from the 110 homes sold in June of 2021.
- Sales numbers continue to decrease due to both decreased demand and limited inventory throughout the spring.
- While demand may be down, the limited inventory still created a competitive environment for prospective buyers. Of all the homes sold in June on Maui, 33.78% sold for over asking price and 54.22% sold for asking price or above.
- The lower price points of the market remained the most competitive. Of the homes sold for under $1,000,000, 61% sold for over asking price and 84% sold for asking price or above.
- Competition eased a little from May when 35.48% of all homes sold for over asking price and 61.29% sold for asking price or above. It is also the first month this year where the percentages are lower than the year before. The June 2021 numbers were 36.36% above asking and 54.55% asking price or above. For a little context, June 2019 “pre-covid” numbers were 3.45% sold over asking price and 27.59% sold for asking price or above.
- The Median Sales price for the homes that closed in June came in at $1,275,000. That is 14% higher than June 2021’s median of $1,117,500.
- The Average sales price of homes sold in June came in at $1,837,250. That compares to last June’s average of $1,734,816.
- Average sales price continues to be boosted by strong luxury market activity. That includes one sale over $10,000,000, two additional sales over $5,000,000 and a total of 16 homes sold over $2,000,000.
- The highest priced transaction in June closed for $16,013,250. The five bedroom/ 3 bath oceanfront home in Makena is one of the very limited number of homes on island with zoning that allows vacation rentals.
June Condo Sales
- Maui Realtors reported 147 condos sold in June. That is 38% lower than the 239 sold in June of 2021.
- As with the home market, decreased volume reflects both a decrease in demand and constrained inventory.
- Demand for the limited inventory remained sufficient throughout the spring to keep the market competitive among buyers. Of the June condo sales, 33.33% sold for above asking price and 60.54% sold for asking price or above.
- That is pretty comparable to May when 31.94% sold for over asking price an 66.67% sold for asking or above. Again for some pre-Covid context, in June 2019 only 12.2% of sales closed for over asking and 37.4% sold for asking price or above.
- The median price of the condos sold in June is $840,000. That is 29% higher than last June’s median of $650,000.
- The average price of the condos sold in June is $1,240,840. That 26.14% higher than the average of $983,638 in June of 2021.
- Luxury condo market activity is helping to push up that average sales price. Twenty-nine condos closed for more than $1,500,000 including 3 condos over $5,000,000 and 1 over $10,000,000.
- The highest priced condo to sell in June is located in the Makena Golf and Beach Club. The Molokini Residence floor plan with 5 bedrooms, 5.5 bathrooms and 4,430 square feet of living space closed for $11,256,000.
Looking at the Maui Land Market
The Maui land market is something of a forgotten stepchild of Market Musings. We typically focus on the far busier home and condo markets. In an attempt to make up for past oversight, I thought I would take a deeper dive into the land market for the year to date.
Year to Date Sales Volumes
|Sales||New Pending Sales||New Inventory||Cancelled Listings|
Looking at the numbers in the chart above, the data that stands out the most is the decrease in sales in June. The decline in new pending sales in May and June suggest that we are likely to see lower sales number in the next month or two as well.
The chart above gives some context on how monthly land transactions in 2022 compare to the previous four years. If you are looking at the chart on a smaller device and you can’t read the key, the darker blue line is 2022, the orange 2021, the grey 2020, the yellow 2019 and the light blue 2018. Needless to say, 2022 sales volume is well below the first half of 2021. While 2022 sales started stronger than 2018-2020, sales appear to be trending below the pre-covid numbers in 2019 and 2018.
The other thing that the chart speaks to is the variability in the market. Year to year patterns in market activity are a little harder to distinguish. You can see some signs of seasonality with the first halves of the year typically busier than the second. Unsurprisingly, 2020 is a clear outlier with a much stronger second half of the year. Sales during the first half of 2019 are quiet for a “normal” year. Month to month fluctuations make the chart a little noisier.
A lot of the noise stems from the limited volume of land sales on a monthly basis. A few more or a few less buyers in any one month can make a big difference in the chart. While the island hasn’t had a lot of new land developments over the last five years, sales in these developments can provide a pretty health boost to the monthly numbers. Sales in places like Mahana Estates in Kapalua and Haiku Town Acres helped boost sales volume in late 2020 and spring of 2018 respectively. Otherwise, the market is largely driven by resales, small subdivisions and condominiumized lots.
Year to Date Pricing
The median price of the lots sold in the first half of the year came in at $845,000. That is 20.71% higher than the median during the first half of 2021. The average sales price for lots during the first half of the year came in at $1,355,768. That is a whopping 55.60% higher than January to June 2021 average of $871,266.
The high average price this year stems both from an increase in the proportion of sales over $1,000,000 and a decrease in the proportion of sales below $500,000. A whopping 39.82% of all sales in the first half of 2022 closed for $1,000,000 or higher. That compares to 29.21% of the sales during the first half of 2021. The percentage of lots sold for $500,000 or under came in at 20.35% in the first half of 2022. That compares to 25.84% selling for $500,000 or less in the first half of 2021.
While inventory grew this spring, the rate of growth slowed in June, and new inventory is limited to date in July. The price distribution of the inventory is notable as well. Of the 79 active lots on the market as of July 14th, only 15.9% are listed for under $500,000 while 63.29% of the inventory is priced for $1,000,000 or higher. A whopping 21.52% of the inventory is priced for $3,000,000 or higher.
Maui Land Market Outlook
As mentioned above, the decrease in pending sales suggest slowing sales volume will continue in the near future. That shouldn’t be too big of a surprise with the overall volume of sales slowing on island. The question is whether the decrease is a blip or a trend?
I can’t speak with any sense of certainty, but it is worth noting that the land market faces headwinds going forward. Lower priced inventory is scarce. Higher interest rates and uncertainty over the direction of future interest rates is a barrier for those who want to build and refinance into a conventional home loan going forward. My understanding is that building material costs remain pretty high although there may be some relief in the future as commodity prices come down. That said, construction labor is likely to remain high on island. When talking to a contractor earlier this year, he indicated he had to keep raising the hourly wage of his employees. Otherwise, employees struggled to afford rentals under his older wage structures. It will likely require a decrease in local rents or a big construction slow down for labor costs to adjust.
The other question is to whether we will continue to see higher demand in the $1,000,000 plus inventory. Only 13-16% of all sales closed for over $1,000,000 during 2018-2019. Will we continue to see elevated demand for higher priced lots as the market normalizes?
The one thing likely to bolster the land market moving forward is continued scarcity. There aren’t a lot of land projects on the horizon. Resales, condominiumized lots and the occasional small subdivision are the likely source for inventory in the future. This is an island so areas with sufficient water, infrastructure and zoning for future development remain finite.
A Little Maui Beauty to Brighten Your Day
Contact The Maui Real Estate Team
Questions about this post? Interested in buying or selling property on Maui? Contact The Maui Real Estate Team. One of our agents would welcome the chance to sit down with you to answer questions and to learn more about your Maui Real Estate needs.
Maui Real Estate Blog
Kapalua February 2022 Market Update
If there is any one community within Maui that epitomizes the Covid era real estate boom, it is Kapalua. This resort community on Maui’s Northwest coastline was always an appealing locale for a segment of Maui’s luxury property buyers. That said, inventory tended to be higher and days on market tended to be longer than other resort areas like Wailea and to a lesser extent Ka’anapali. With that context, the recent surge in activity in Kapalua is that much more astounding. In this post, we take a look at some of the numbers from the last 18 plus months of sales. We also give a few thoughts towards the end of the post on the market outlook for 2022.
Kapalua was one of the first luxury home markets on the island to show signs of life in the second half of 2020. The strong performance continued into 2021. The numbers below represent highlights from the 2021 market activity.
Kapalua 2021 Home Sale Notable Numbers
- Maui Realtors reported 29 homes sold within the Kapalua Resort during 2021. That is a 70% increase over 2020.
- The 29 sales is the highest ever number for a single year in Kapalua. It is worth noting that 2020 was the second strongest year ever for home sales in Kapalua.
- The median price of homes sold during 2021 is $4,135,000. The average price is $4,972,327.
- The highest priced transaction closed for $15,000,000. That was for 9 Kapalua Place. This beachfront home includes over 7,000 square feet of living space on a .7 acre parcel of land.
- That was one of three closes over $10,000,000. The other two sales included another beachfront home in the Kapalua Place subdivision and a home in Kapalua Plantation Estates.
- Pineapple Hill was the busiest subdivision for transactions with 15 closes. Plantation Estates saw the next most activity with 6 sales. They were followed by Honolua Ridge with 4 sales, the aforementioned Kapalua Place’s 2 closes and a single home sale in Mahana Estates.
Behind the Numbers
As mentioned above, Kapalua’s market surge started in the second half of 2020. Specifically, it was the last quarter of 2020 when transaction volume picked up. Nine of seventeen sales for the year closed in November and December. The upturn in market activity happened earlier than the Wailea Market, a larger resort community with typically much higher sales volumes. What was it that drove earlier buyer interest in Kapalua? Well it wasn’t any new resort amenities. The biggest driver was the proximity to one of the island’s better private schools.
Early in the pandemic, Kapalua became a Zoom town. A large number of Silicon Valley employees moved to Maui to work remotely. Initially, they came as renters. Those with families had their kids learning remotely for the last couple of months of the 19/20 school year. At the start of the 2020/21 school year, the enrollment of Maui Prep ballooned by 100 students. All of the new students came from Silicon Valley families. The school, located minutes from Kapalua, offered a draw to remote workers that a place like Wailea did not. Many of the families that started as renters began to purchase property in the fall of 2020 and that momentum continued into 2021.
It’s worth looking at the 2021 sales more closely as market conditions were not uniform throughout the year. Twenty of the twenty-nine sales in Kapalua occurred in the first six months of the year. During the first part of the year, there was still a decent supply of homes for sale. The decreased sales volume during the second half of the year can be attributed to a combination of reduced inventory, seasonality and perhaps slightly lesser demand. Though, I would put inventory at the top of that list by a good margin. Scarcity remains a driving factor going into 2022. I will comment more on that in the market outlook below.
The Kapalua Resort set a new record for condo sales in 2022. The dynamics driving the market were a little different than the home market. It was less of a case of remote workers and more a case of the Covid second home boom. The numbers below show some of the 2021 market activity followed by a few more thoughts on what drove the numbers.
Kapalua 2021 Condo Market Numbers
- Maui Realtors reported 145 sales in the Kapalua Resort during 2021. That is a 363% increase in activity over 2020.
- For additional context, the next closest year for condo sales in Kapalua is 2004. There were 87 closed transactions that year.
- The median price of the condos sold in 2021 is $1,220,000. The average price is $2,060,805.
- The highest priced transaction closed for $13,295,000. That type of cash buys you a 4,050 square foot, four bedroom, four and a half bathroom unit at the Montage Residences Kapalua Bay with stunning views. This is the highest ever sales price for a condo in Kapalua.
- The lowest priced condo sold in 2021 closed for $600,000. That sale was a 1 bedroom, 1.5 bath unit at Kapalua Golf Villas.
- Golf Villas experienced the most sales activity in the resort with 44 closes in 2021. Kapalua Bay Villas came next with 30 closed transactions followed by Kapalua Ridge with 28 closed sales and Montage with 27. On the quieter end of the spectrum, 6 sales closed in Coconut Grove, 5 closed in the Ironwoods and 5 closed at the Ritz Carlton Residences.
- 2021 was the busiest year for transaction volume on MLS records for the Ridge, Bay Villas, Golf Villas and Montage. It was the busiest year since 2003 at Coconut Grove and the busiest since 2004 at the Ironwoods.
Digging into the Condo Numbers
The Kapalua Condo market didn’t fully kick into gear until early 2021. Market activity more closely resembled the activity in other condo markets around the island. A modest uptick in activity in late 2020 followed by frenzied activity after the new year. While activity slowed a little in the second half of the year, sales volumes for Kapalua condos did not dip to the same extent as the home market. Forty-six percent of all condo sales occurred in the second half of 2021 compared to only 31% of home sales. While supply shrank as the year went on, there was still enough supply available to meet the considerable demand.
I usually don’t spend too much time discussing land sales when I provide these community level market updates. That said, the 2021 Kapalua land market can’t be ignored. The increase in transaction volume compared to 2020 was bigger than any other segment of the Kapalua market.
Notable Land Sale Numbers
- There were 60 lots sold in Kapalua during 2021. That calculates to a 750% increase in transaction volume compared to 2020!
- The 60 sales is almost 1/4 of the 247 all time sales in Kapalua reported on the MLS.
- Mahana Estates led the way with 42 closed transactions. These were new developer sales.
- Honolua Ridge saw the second most sales activity with 11 sales. Realtors reported 5 sales in Plantation Estates and 2 sales in Pineapple Hill Estates.
- The median price of lots sold is $995,000. The average price is $1,156,000.
- The highest priced sale closed for $2,600,000. The 2.7 acre lot in Plantation Estates offers beautiful views towards Honolua Bay.
- The lowest priced lot closed for $700,000 in Mahana Estates.
Looking Behind the Land Numbers
This was the year of the great Mahana Estates land rush. At the start of the pandemic, I don’t think anyone would have predicted this development would sell out by the end of 2021. Market response for was tepid the first few years the development was on the market. One lot sold in 2019 and two in 2020. There were a couple of different days in February where 3 lots closed in a day. It will be interesting to watch this development evolve and build out. There were a fair share of bulk purchases among this year’s Mahana Estates Sales. Were those land speculators, spec builders or long term holds?
The 18 non-Mahana Ridge sales are nothing to sneeze at. Those 18 sales alone are more than any one year since 2005. The lack of inventory in the home market during parts of 2021 definitely pushed some buyers to build.
2022 Market Outlook
Inventory, or lack thereof, appears to be the biggest market driver to start 2022. At the time of this post, there are only 6 active Kapalua Homes for Sale. Three additional homes are under contract. As of right now, there are only 12 active Kapalua Condo listings. It is worth noting that only 2 of the active condo listings are priced for less than $2,000,000. An additional 12 condos are currently under contract. Land is even more scarce. There is only one lot for sale in Kapalua. An additional 9 lots are under contract.
It’s safe to say that 2022 shouldn’t threaten the record sales volumes of 2021. The question is whether we will see any inventory relief during the year. Will some of the people remote working list their homes if they go back to the mainland? Will the high prices entice any sellers to come to market?
What about demand? As of right now, demand appears to be pretty strong for the limited inventory available. That is putting upward pressure on pricing. Looking forward, are there any other threats to demand looming on the horizon? There is a lot of discussion about rising interest rates and their impact on the national real estate market. There are arguments on both sides, but a lot of economists seem to be downplaying the potential impact on buyer demand due to the acute supply issues. That said, you would think the impact might be even less in Kapalua where 62% of last year’s sales were cash.
I would argue that state of the overall economy and the trajectory of the stock market are likely to have a bigger impact. Over the years, we’ve noted something of a correlation between sales volume in the resort communities and the stock market. Good years for the Dow means more financial power for discretionary purchases like second homes.
The last question is whether we might see any buyer resistance on pricing. In particular, I wonder about the impact in the vacation rental condo market. Maui has always been a place where more people bought for love than rental returns. That said, the recent price increases resulted in even smaller cap rates. Will the combination of limited returns on higher purchase prices shrink the buyer pool at all? Thus far, that doesn’t seem to be the case.
Contact The Maui Real Estate Team
Contact The Maui Real Estate team if you are considering buying or selling property in Kapalua. We would welcome the chance to discuss market conditions specific to your interests.