Maui Real Estate Blog

Three Takeaways from the Maui Real Estate Market During the First Quarter of 2017

It has been a while since I have done an island wide stats post. After over ten years, I was struggling with rehashing the same format on a monthly basis. I decided to take a different approach this month. Rather than barraging you with lots of numbers, I wanted to try to distill the numbers into a few key takeaways. I also am gong to try to do this on a quarterly basis. With our smaller market, I think there is some merit to looking at slightly longer time horizons to overcome some of the variability we get on a month to month basis. Hopefully, those two changes will make for a better and more informative read. Without further ado, Here are my three key takeaways from the first quarter of 2017 followed by a some thoughts on what we may expect over the next few months.

1. Scarcity was the biggest driver of the Maui Real Estate market for the first three months of 2017. This was particularly true in the home market under $1,000,000. The lack of inventory in this price range has resulted in a lot of bidding wars and upward pressure on pricing. It also meant a decrease in sales volume as there just aren’t as many homes to sell. Buyers are out looking, but they are having a tough time getting into places. This is reflected in the stats with median prices up 15% compared to the first three months of 2016 and sales volume down 5%. The March median home price of $769,000 was the highest that we have since 2006. Again, this really hammers home the scarcity of listings at lower price points.

Scarcity is not a Maui specific phenomenon. It is happening throughout the United States. I was listening to Jill Schlesinger of CBS on Here and Now. She talked about the factors constraining the housing stock nationally. She cited a Baby Boomer generation that has not been quick to sell their homes at retirement. There are quite a few members of that generation who are choosing to modify their homes so they can age in place. Schlesinger also said that a lot of homes were acquired by private equity companies during the last downturn. They have kept those properties as rentals rather than putting them back on the market. I am not sure that the same factors are in play on Maui. For one, private equity firms were not buying property in big numbers on island. I think the biggest constraint we are seeing on Maui is a lack of new construction. New construction is not even coming close to keeping pace with population growth. It takes a longer period of time for new developments to get off the ground on Maui and many times they will fizzle out in between market cycles. We are also seeing a lot of new development occurring at higher price points in the market and less development occurring at the entry points of the market where demand is highest.

2. Luxury Real Estate Sales Trend up and Shift South. Luxury home sales were up in the first quarter of the year. There were 16 sales over the first 3 months of 2017 compared to 11 over the first 3 months of 2016.

Over the last couple of years, luxury home sales have been stronger in West Maui compared to South Maui. Launiupoko has led the charge with Kapalua and Kaanapali following close behind. There were eight sales in West Maui over $2,000,000 during the first 3 months of 2016. There was a a solitary sale in South Maui during that period. This year, there were four sales in West Maui over $2,000,000, and there were eight sales in South Maui over $2,000,000. Makena market activity was particularly notable with four sales over $9,000,000. It is hard to account for the shift in sales volumes between the different part of the island. Sometimes it just depends on the comparative quality of the inventory. Makena may also be seeing a bump due to the development of the Makena Golf and Beach Club. While none of the four sales in Makena were part of this development, this ultra high end development from Discovery Land Company may be drawing some affluent buyers to explore more immediate options for purchase outside of the new development.

There was also an uptick in luxury home sales outside the resort areas. There was a single sale in each of the communities of Hana, Haiku, Kula and Paia.. That compares to a single sale outside the resorts during the first three months of 2016.

The luxury condo market saw some similar trends. Sales were up overall. There were twenty-three sales over $1,500,000 during the first few months of this year compared to seventeen during the first three months of 2016. Twenty of the sales were in South Maui during 2017 compared to nine last year. Conversely, West Maui has seen a dip in activity with three closes compared to eight in 2016. Some of that can be attributed to a decrease in inventory in Honua Kai. All of the developer units have sold there which means we are now depending exclusively on resales.

3. Overall, the condo market had strong start during the first quarter of 2017. Condo sales do not seem quite as constrained by inventory when you look at the sales volume. Sales volume is up 17% compared to last year***. Almost all of that growth in activity can be traced back to the vacation rental condo market.

The vacation rental market had been in the doldrums for the previous couple of years. Much of that can be attributed to a decrease in demand from our neighbors North of the border. The Canadian Dollar has slumped after a number of years of parity. As a result, we saw relatively limited activity and a glut of inventory in some of the more popular vacation rental condos in the Kihei area. That appears to have shifted during this buyer’s season. Overall, sales of vacation rental condos were up 48% county wide. In Kihei, sales of vacation rental friendly condos were up 73%.

It is hard to attribute an exact reason for the sudden boom in the Kihei condo vacation rental condo market. While we may be seeing a few more Canadian buyers, the Canadian dollar remains far below the peak that prompted the last wave of Canadians. I surmise that there may be a number of factors at play. The concept of vacation rental ownership is being more ingrained into people’s psyche as companies like Airbnb become more prominent. A number of our domestic feeder markets are feeling their own real estate booms. West coast markets like Seattle, Portland and much of California continue to see strong activity. We also have seen a sustained bull run in the stock market that may provide people with the discretionary capital to make a second home purchase.

As with the luxury condo market, West Maui hasn’t seen quite the same level of activity for the general vacation rental condos. Numbers are down slightly in West Maui for condo sales. Again, Honua Kai plays a part in the lack of activity. This condo complex has been the driving force in West Maui condo sales in all price ranges since 2010. With the remaining inventory higher priced resale units, sales have slowed substantially at Honua Kai.

What can we expect over the next few months?
There is no immediate relief coming with the housing supply issues on Maui. On the demand side, island rents remain high and interest rates are still comparatively low. Barring a cataclysmic shift in the economy or a major upheaval in global politics, market conditions should remain similar to what we saw in the first quarter of the year. That means that competitive bidding will likely remain the norm for well priced homes in the $1,000,000 and under price range. You may even see a few bidding wars at well priced homes over $1,000,000. This can be a frustrating time for buyers as strong offers can still be trumped by irrational exuberance. That said, buyers should remain patient, make sure they have their ducks in a row when it comes to financing, be realistic about their financial picture and act decisively when properties that meet their needs come to market. While this is a seller’s market, there is some variability in demand by town and even neighborhoods on the island. Not everywhere is booming so sellers should consult closely with their Realtor and study recent sales to develop a realistic market price. Contact the Maui Real Estate Team if you are considering buying or selling property on Maui. We would welcome the opportunity to sit down with you face to face or to talk on the phone to discuss your real estate needs.

***Note the numbers reported for vacation rental condo sales are not 100% accurate. It is not a mandatory field in the Maui Multiple Listing Service to report whether or not a condo may be vacation rented. As a result, vacation rental condo sales can be under reported.

Pete Jalbert

Maui Real Estate Blog

The Year in Numbers, The 2015 Maui Real Estate Statistics

Before we head into February, I wanted to take a quick look back at the 2015 Maui Real Estate market. This is a review of sales volumes, median prices and other notable numbers. I also wanted to address a few questions that arose in my own mind while compiling the statistics. Without further ado, here are the 2015 statistics.

This chart compares the volume of homes, condos and lots sold in Maui County during 2014 and 2015.

Maui Sales Volume, Median Prices and Total Dollar Volume
There were 1090 homes sold on Maui during 2015 with a median sales price of $580,000. The total dollar volume of homes sold in 2015 was $931,646,757. There were 942 homes sold in 2014 with a median price of $570,000. The 2014 total dollar volume was $825,770,160. That means we saw almost a 16% increase in sales volume, just under a 2% increase in median price and a 13% increase in dollar volume when comparing 2015 to 2014.

There were 1,199 condos sold in Maui County during 2015 with a median sales price of $410,000. The total dollar volume of condos sold was $763,806,071. The 2014 condo totals were 1,201 sales with a median price of $414,750. The 2014 total dollar volume was $755,031,268. That means sales volume dropped two tenths of a percent, median price dropped just over one percent and the total dollar volume rose one percent in 2015.

There were 154 land sales in Maui County in 2015 with a median sales price of $447,650. The total dollar volume of land sold was $136,353,541. The 2014 sales figures for land were 166 sales and a median price of $520,000. The total dollar of land sold in 2014 was $119,330,455. That is just over a 7% drop in volume, a 14% drop in median price and a 14% increase in the total dollar volume.

Notable Numbers from the 2015 Maui Real Estate Sales

  • The highest priced home to sell on Maui during 2015 closed for $41,775,000. This was by far and away the highest ever priced paid for a home on Maui. The subject property consists of 6,737 square foot house on 4.23 acres in Makena. More than a few eye brows were raised by a sale that was priced well above other comparable properties in the area. The property was not listed at the time that it sold.
  • That was one of 56 homes to sell for more than $2,000,000 during 2015. The 56 homes sold over $2,000,000 was down by 14% from 65 sold in 2014.
  • The Makena and Wailea area were busiest part of the island for sales over $2,000,000 with 13 total closes.
  • There were 17 beach or oceanfront homes that sold in Maui County during 2015. That was a 29% decrease from the 24 oceanfront sales in 2014.
  • On the other end of the spectrum, the lowest priced home to sell in Maui County closed for $94,750. That home is located in the Maunaloa Village area of Molokai. The lowest priced home to sell on the island of Maui closed for $210,000. The three bedroom, one bath home in Wailuku was situated on a tiny 2,370 square foot lot.
  • The highest priced condo to sell on Maui during 2015 closed for $8,500,000. The beachfront, three bedroom unit at Wailea Beach Villas has over 2,900 square feet of living space.
  • That was one of 91 condos sold for over $1,500,000 during 2015. That exceeded the 83 high end condo sold in 2014 by almost 10%.
  • The Honua Kai Resort saw the most high end condo sales activity with 25 closes over $1,500,000. Montage Kapalua Bay was notable with 9 sales over $3,950,000.
  • The lowest priced condo to sell closed for $20,000. That was a 1 bedroom, 1 bath unit at Harbor Lights in Kahului.
  • The highest priced land transaction to close in 2015 sold for $10,800,000. That was for a half acre lot in the Maluaka Homesites area of the Makena Golf and Beach Club.
  • That was one of 6 land sales in this neighborhood for $7,800,000 or more.
  • There were 25 total land transactions of $1,000,000 or more in Maui County during 2015. That was up slightly from 24 sales over $1,000,000 in 2014.
  • The lowest priced lot to sell in Maui County closed for $20,000 for a 5,351 square foot lot on Molokai. The lowest priced lot to sell on Maui proper closed for 26,000. That was a leasehold lot in the Hawaiian Home Lands in Kula.
  • There were 168 bank owned or REO transactions that closed in Maui County during 2015. That was up from the 116 bank owned sales in 2014. That is almost a 45% increase in bank owned sales.
  • There were 49 successful short sales that closed in 2015. That is down 49% from the 97 short sale transactions in 2014.
  • Of the properties that closed in 2015, 36% were reported to have been cash sales. That is down from 2014 when 42% of the sales were said to have been cash transactions.

Some Questions and Answers About the Numbers
While reviewing the numbers above, a lot of questions came up in my mind. In the paragraphs below, I wanted to address some of these questions and give my thoughts on potential answers.

What drove the increased home sales activity this year?
When looking at the numbers above, homes were the only property type to outperform the 2014 numbers. What drove the increase in sales? There were a couple of factors that came into play. I believe a lot of the activity was driven by on island buyers. Island rents have soared over the last few years. Lower interest rates made the buy vs. rent argument that much more compelling. The threat of increased rates in the near term added to buyer urgency. Evidence of the increased demand from local buyers could be found in the big bump in activity in Central Maui. Home sales in that part of the island were up 33% over last year. The Upcountry area also saw a bump with Pukalani, Kula and Makawao sales up 28,31 and 7% respectively. These are communities that tend to draw on island vs second home buyers. A couple of strong years for tourism helped put local buyers in a better position to afford their purchase.

If sales activity was so strong, why did the median home price only increase 2%?
The first thing to note when answering this question is that changes in median price are not a direct reflection of changes in property values. Median price is also driven by shifts in where sales activity occurs. More high end sales can push up the median sales price while more low end sales can push down the median price. While values increased quite a bit more than 2% in many parts of the market, that was offset by a shift in where sales were occurring. There was a 14% decrease in sales over $2,000,000. As mentioned in the paragraph above, we were also seeing higher levels of activity in more affordable communities around the island. These shifts in market activity helped to offset stronger appreciation in some of the lower and middle priced communities on island.

As a follow up question, one might ask exactly how much Maui home values increased in 2015? That is a really tough question to answer. First and foremost, the rates of appreciation varied largely by price point and location. Homes at or below the median saw the most appreciation due to simple supply and demand. These price points had a much larger pool of buyers and supply was relatively limited. Higher end homes have much more inventory and a much smaller pool of buyers. As a result, upward price pressure has been far more limited.

Why did the condo market see a dip in activity?
If home sales were so strong, why were condo sales down? Condo sales are driven more by off island buyers. I would say the weakening Canadian Dollar played a big part in the decrease in condo sales activity. Maui has seen a significant number of Canadian Condo Buyers since about 2007. That was the first year that the Canadian Dollar was on par with the U.S. dollar. The emergence of Canadian buyers in 2007 helped to buoy the Maui market while a lot of mainland markets were already starting to see big decreases in sales and pricing. They continued to be buyers through the downturn and into the start of the recovery. Around 2013, the Canadian dollar started to dip below par and more substantial decreases occurred in 2014 and 2015. At the time of this post, the Canadian dollar is currently worth 72 cents in American dollars. Less buying power means fewer Canadian buyers. It doesn’t help that a lot of the previous Canadian buyers were coming from Alberta. The weakening Canadian dollar is a reflection of weakening oil prices. The drop in oil prices is a double whammy for buyers from the oil rich province of Alberta.

Final Thoughts
I know tomorrow is the first of February, but I still plan on putting out more posts specific to how different communities around the island performed during 2015. Those posts will also include some thoughts on what we might expect to see in those communities during 2016. Feel free to contact The Maui Real Estate Team if you have any questions on the numbers above, or if you need assistance buying or selling property on Maui. We welcome the opportunity to be of assistance.

Pete Jalbert

Maui Real Estate Blog

November 2015 Maui Real Estate Statistics

It is New Year’s Eve, and I am just getting around to the November 2015 statistics. Needless to say, the holiday season is a whirlwind and blogging can find itself on the back burner. Since this is a last minute attempt to squeeze in the November numbers before the end of the year, this is going to be something of an abbreviated post with limited analysis. Don’t worry, I plan to delve deeper into stats next week with year end numbers. In the interim, here are the November Maui Real Estate Stats.

November Sales Volumes and Median Prices

This chart compares the real estate sales volumes for Maui County during November 2014 and November 2015

There 72 homes sold in November with a median price of $550,000. By comparison, there were 76 homes sold in November of 2014 with a median price of $587,500. That is a 5% drop in sales volume when comparing this November to last November.

There were 74 condos sold in November of 2015 with a median price of $475,000. Last November, there 68 condos sold with a median sales price of $366,250. That represents almost a 9% increase in sales volume when comparing the two Novembers.

There were a total of 9 land parcels sold in November with a median price of $520,000. In November of 2014, there were 10 lots sold in Maui County with a median sales price of $411,500. That is a 10% drop in volume comparing this November to last November.

Notable Numbers from the November Maui Sales Activity
While compiling sales volumes and sales medians, I came across some notable numbers that I thought were worth sharing.

  • The highest priced home to sell in November was located in the Kaanapali Coffee Farms. The 3,716 square foot home has big ocean views, an infinity pool and over 4.6 acres of land. It closed for $3,475,000.
  • This was one of four home sales in Maui County for more than $2,000,000 in November. The other sales were in Lanai, Paia and Wailea respectively.
  • The Wailea sale set a new record for the Wailea Kai neighborhood. It closed for $2,200,000.
  • The highest priced condo to close in November was a 3 bedroom, 3 bathroom unit at Honua Kai with 2,170 square feet of living space. It closed for $3,197,450.
  • The Honua Kai sale was one of six condos to close for over $1,500,000 in November. The other big condo sales included two more at Honua Kai, a Hoolei, a Ritz Carlton Residences and a Makena Surf.
  • The highest priced land transaction last month was for a .43 acre parcel in the Maluaka Estates Neighborhood of the Makena Golf and Beach Club. The lot closed for $9,000,000. Six of the ten lots in Maluaka Estates have now sold.
  • There were 16 bank owned sales and 1 short sale that closed in November. In November of 2014, there were 12 bank owned sales and 4 short sales.

November Maui Pending Real Estate Sales Activity
As I have said before in our stats posts, sales volume can be a lagging indicator. With contracts that typically take 30-60 days to close, the November sales are more of a reflection of buyer interest in September and October. That is why we also like to look at the total number of properties that go pending in a particular month. The chart below compares the number of homes, condos and parcels of land that went pending this November as compared to last November.

This chart compares the number of properties in Maui County that went under contract in November of 2014 and November of 2015

Home pending sales were up significantly over November of 2014. Condos and land saw a modest dip in pending sales activity. In the one bit of analysis in this post, I would surmise that the strength of pending home sales may pertain to the anticipation of increases in interest rates. While the December increase in rates proved to be modest, buyers wanted to lock down as low as rate a possible.

Wrapping it up
With the new year upon us, expect quite a few stats posts in the coming weeks. We will be taking a look at the December stats, the overall 2015 stats and year end reviews and outlooks for a handful of communities around the island. We wish everyone a Happy New Year. Contact The Maui Real Estate Team if buying or selling real estate on Maui is part of your 2016 plans. We would welcome the chance to sit down with you and discuss your needs.

Pete Jalbert

Maui Real Estate Blog

Sneak Peek at the October 2015 Maui Real Estate Statistics

It seems like just a few days ago when I was writing about the September Maui Real Estate statistics. Actually, it was a just last week when I wrote that post. Last month, a busy schedule kept me from posting the stats until the last week of the month. I had an opportunity to get the October stats out a little sooner. They are early enough in the month that I may even miss a few late reported sales. This is my sneak peek at the October sales volumes, median prices, notable sales numbers and pending sales. I also give a few thoughts on the state of the market, and what it all means for buyers and sellers. Without further ado, here are the October numbers.

October 2015 Sales Volumes and Median Prices

This chart compares real estate sales volumes for Maui County during October 2015 and October 2014

By my count, there were 103 homes sold in October with a median sales price of $585,000. Last October, there were 84 homes sold at a median price of $566,000. That is almost a 23% increase in sales volume and roughly a 3% change in median price.

There have been 102 condo sales reported to date for October with a median sales price of $391,450. By comparison, the October 2014 numbers were 95 condos sold at a median price of $419,000. That is a 7% increase in volume and a 7% decrease in median price.

There have been 16 lots reported sold in October with a median sales price of $375,000. Last October, there were 14 sales at a median price of $467,500.

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

  • The highest priced home to sell on Maui in October closed for $3,750,000. The home in the Wailea Golf Estates Subdivision has 4 bedrooms, 4 bathrooms and 4,277 square feet of living space. The home is located on the fourth green of the Wailea Blue Course. It has unobstructed ocean views and a 20 meter pool.
  • The Wailea Golf Estates sale was the only home to close for over $2,000,000 last month.
  • The highest priced condo to sell in October closed for $3,650,000. The condo in question is a 3 bedroom, 4 bathroom oceanfront condominium in the Kapalua Ironwoods complex.
  • The Kapalua Ironwoods transaction was one of 7 condo sales to close for over $1,500,000. The other sales included 2 condos at Honua Kai, 2 at the Ritz Carlton Residences, a Wailea Point condo and a unit at Ho’olei.
  • The high land sale last month was at the Makena Golf and Beach Club. The .4399 acre parcel in the Maluaka Estates neighborhood sold for $8,500,000.
  • That was one of three land sales over $1,000,000. The other sales included a home site near Manele Bay on Lanai and a 131 acre parcel in Haiku.

October Pending Maui Real Estate Sales
Sales are a lagging indicator of buyer activity. Most of the sales referenced above were based on contracts that were written in August and September. The chart below shows the number of properties that went pending or under contract in October.

This chart compares the number of properties that went pending in Maui County during October of 2015 and October of 2014.

The October pending sales look pretty strong with only home pendings down compared to October of last year. That said, the dip in home pendings is noteworthy as the home market had been particularly strong over the last couple of months. The modest dip in activity comes as a bit of a surprise as I have been in three multiple offer situations over the last month for homes below $600,000. That is a small sample, but it still feels like there are quite a few buyers in the market. It will be interesting to watch home sales over the next couple of months. Are things cooling down a little or was this an aberration?

Thoughts on the Maui Real Estate Market and What it All Means for Buyers and Sellers
The October Stats showed another strong month of buyer activity. As mentioned in other recent stats posts, the stronger sales activity can be attributed in part to buyers trying to get into the market to take advantage of what has been a long run of really low interest rates. The federal reserve continues to discuss an increase in rates and buyers are trying to tie properties down before any rate increases occur. The low borrowing costs are that much more appealing due in part to a really tough rental market on Maui. Rental prices have gone up significantly over the last few years and some borrowers are finding that mortgages are equivalent to or in some cases better than monthly rents.

Buyers who are interested in entering this market place will find that they need to be well positioned to act quickly when good opportunities are listed. Homes under $600,000 will often attract bidding wars if they are well priced. It is not uncommon to see bidding wars on well priced homes at significantly higher price points. Sellers will find pretty favorable conditions when going to market. That said, over priced properties are still sitting even with stronger than usual fall buyer activity. There are also some parts of the market that are a little slower than others. Sellers should look closely at market conditions specific to their type of property when determining go to market prices. Contact The Maui Real Estate Team if you are thinking of buying or selling a property on Maui. We would welcome the chance to discuss your real estate needs and talk about the market particular to properties that might be of interest.

Pete Jalbert

Maui Real Estate Blog

August 2015 Maui Real Estate Statistics

The end of Labor Day weekend marks the end of summer for many people on the mainland. The kids are back in school. The weather is starting to cool off. Summer days at the beach are becoming more of an afterthought. Here on Maui, it is safe to say our changes in season are a little more subtle. Winter waves are just around the corner, and we may even start to see the first whale spouts off our coastal waters before the end of the month. Of course, the end of labor day also means it is time that we check in and take a look at the Maui Real Estate market. This is our look at the August Real Estate Statistics for Maui. We include information on median sales prices, sales volume, pending sales, notable sales and a few thoughts on the overall state of the market. Without further ado, here are the numbers.

August Maui Real Estate Sales Volumes and Median Prices

This table compares the sales volume of properties on Maui during August 2014 and August 2015

By my count, there were 95 homes sold at a median price of $550,000 in August. Last August, there were 69 homes sold at a median price of $570,000. That calculates to a 38% increase in sales volume and a 4% decrease in median price.

There were 99 condos sold this August with a median price of $355,000. In August of 2014, there were 94 condos sold at a median price of $402,000. That means there was a 5% increase in volume and a 12% decrease in median price.

In August, there were only 4 lots sold with a median price of $347,500. Last year, there were 13 sales with a median price of $440,000. That represents a 69% drop in activity and a 21% drop in median price.

Notable Numbers From the August Sales Activity on Maui
While compiling the sales volume and median prices, I came across some other notable numbers that I thought were worth sharing with readers of the blog.

  • The highest priced home sale last month was $2,035,000 for a place in Haiku. The four bedroom, three and a half bath home has 3,288 square feet of living space and a pool on 2.29 acres.
  • This was the only sale over $2,000,000 this month. That is a pretty quiet month for luxury home sales.
  • The highest priced condo to sell last month was a unit in Montage Kapalua Bay that went for $4,600,000. This condo has three bedrooms, three and a half bathrooms and 2,789 square feet of living space.
  • After a couple of slow months, the luxury condo market saw an uptick in activity. The Montage sale was one of eight sales of a $1,500,000 or more. The other closes included 3 units at Honua Kai, 2 at Makena Surf, and 2 at Ho’olei.
  • The highest priced land transaction last month was $7,800,000 for a lot in the Maluaka Estates area of Makena Golf and Beach Club. This development continues to fetch premium prices considering that this lot is .65 acres and not directly on the ocean.
  • There were 8 bank owned sales and one short sale last month. The short sale is becoming an increasingly rare event. In addition to many people being in improved equity situations, buyers are likely wary of the time frames associated with short sales with an interest rate hike looming.

August was another healthy month for sales. I think it is worth starting our review of the stats with the one part of the market that did not have a good month. While the land market has never really taken off with the current market recovery, this was a particularly slow month. The four sales reported last month made it the slowest month we have seen since 2009. What was it that drove the reduced activity? Shrinking inventory could play a part. The entry point for vacant land is pushing higher and higher. I also think interest rates could be having an impact. While some buyers have previously been looking at land to build as an alternative to the housing market, that pool of buyers may be shrinking with the knowledge that the time frame for lower interest rates is shortening. It may also just be something of an anomaly. There were 16 lots that went pending in Maui County in August. I will have a little more on the pending land sales and the overall pending sales below.

Home sales continued to be strong thanks again to the threat of interest rate increases. There are quite a few buyers trying to get into the market before rates increase. That is bolstering sales compared to what we saw last year. Last month’s home sales were also boosted by 16 closes in Waikapu Gardens Phase II. This affordable housing subdivision in Wailuku will continue to bolster sales over the coming months. There are a total of 56 homes that will be sold in the subdivision, and there have been 17 sales reported to date.

The condo market fared a little better than it did in August of 2014. The one thing from the condo sales that I thought was particularly noteworthy was the bump in activity in the luxury condo market. The eight sales reported last month was a positive sign after what had been a slow few months of reduced activity.

August Pending Sales Activity
Sales are in some ways are a lagging indicator of market activity. The majority of the closes that occur in any one month are based on contracts that were written 1-2 months prior. That is one of the reasons we like to track pending sales activity.

This chart shows the difference in pending sales between August 2014 and August 2015

It was a good month for pending sales across the board in August. I think we are going to continue to see pretty good pending activity until we see an interest rates hike. I would not be surprised if activity slows when that occurs. As mentioned above, there were quite a few more lots that went pending than were sold. The interesting part about that was that there was a good bit of activity at the different extremes of the market. There were 4 lots that went pending on Molokai for $30,000 or less. There were also four lots that went pending in the Maluaka area of the Makena Golf and Beach Club.

What Does it All Mean for Buyers and Sellers?
Buyers who require financing will likely be scrambling over the rest of the month as they try to get the last of the best interest rates. As a result, buyers should expect that well priced properties are going to be competitive. Multiple offers and over asking sales prices are a regular occurrence on the well priced properties on the low end and the middle of the market. Sellers will find that our usually quiet fall sales season may be a busier time of year than usual. Waiting for the busy season to list may not be advisable depending on the type of property you sell, the location and the price point. While market conditions are favorable for sellers, that shouldn’t be an invitation for sellers to overprice their property. Overpriced homes are still sitting in this market. Contact The Maui Real Estate Team if you are considering buying or selling a property on Maui. We would welcome the chance to sit down with you for a free consultation to discuss your needs.

Pete Jalbert

Maui Real Estate Blog

Maui Luxury Home Market Update

Back when I posted the June Statistics, I promised a series of mid year updates on the real estate markets around the island. Mea Culpa. Sometimes, the rest of my work obligations get in the way of blogging. I have only been able to produce updates on Paia and Spreckelsville. Today, I wanted to turn my sights on the island’s luxury home market. Since it is the end of August, we are going to include all of the sales for the year date. We wanted to look at the volume of high end home sales around the island, notable sales and market conditions specific to some of the different neighborhoods and communities around the island.

Just from a methodology standpoint, I am classifying luxury homes as homes priced for $2,000,000 or more. We have used this $2,000,000 threshold for luxury homes regularly throughout our discussions of stats on this blog. That isn’t to say that there aren’t some very nice homes that have sold this year for less than $2,000,000.

Luxury Home Sales Volumes and Median Prices
There were 43 homes sold for $2,000,000 or more between January 1, 2015 and August 22, 2015. The median price of those sales was $3,196,000. Between January 1, 2014 and August 22, 2014, there were 45 homes sold. The median luxury home price for this period of 2014 was $3,800,000. When comparing this year to last year, there was roughly a 4% drop in sales volume and a 16% drop in median price. Just to be clear, the drop in median does not reflect any sort of change in values in the market. It is a reflection of the inventory sold.

Notable Maui Luxury Home Sales for the Year to Date
Here are some notable numbers that I thought were worth passing along from this year’s luxury home sales.

  • The highest priced sale thus far this year was for a home in the Keahou at Makena Subdivision. The 4 bed/ 4.5 bath home with 6,737 square feet of living space is located on 4.23 acres. It sold for a whopping $41,775,000. That isn’t just the high sales price for the year, it is the highest ever sale price for a home on Maui by a significant margin.
  • Including the Keahou at Makena sale, there were 8 sales over $5,000,000.
  • Wailea/Makena and Ka’anapali were the two busiest luxury home markets through the better part of the last eight months. Realtors reported nine sales in both of those markets.
  • Of the 43 luxury home sales for the year to date, 14 sales were either oceanfront or beachfront.
  • The 43 sales were spread among 12 different towns or resorts in Maui County. Hana and Molokai are two communities that haven’t seen all that many $2,000,000 sales over the previous few years, but they each had one $2,000,000 plus transaction this year.
  • The 43 sales included one bank owned property and two short sales.

A Look at Selected Luxury Home Markets Around the Island
The Maui Luxury home market is fairly diverse. Buyers typically focus their search on one or perhaps two areas of the island. With that in mind, we want to look at how some of the different areas around the island performed during the first eight months of 2015.

This chart compares the sales volume of homes over $2,000,000 around Maui County during the first eight months of 2014 and the first eight months of 2015.

Makena and Wailea
The Wailea and Makena area typically sees the most sales activity of any luxury community on island. That rang true during the first half of 2015 as it tied Ka’anapali for the busiest area for closes on the island. Digging a little deeper within the numbers, there were 8 sales in Wailea and just one sale in Makena. Within Wailea, there was a good cross section of neighborhoods that saw activity. There was a sale in Maluhia, a sale in Wailea Highlands, 2 sales in Wailea Golf Vistas, 2 sales in Wailea Golf Estates and 2 in Wailea Kialoa. The sales activity in Wailea was actually up a little from last year. There were 7 homes sold in Wailea proper in the first eight months of 2014.

Makena saw a drop in activity with the one solitary sale compared to 5 sales during the same period the year before. It is hard to say why there was a dip in sales in Makena. Some of that could just be a case of market variability and inventory. The one other factor that could be coming into play is the Makena Golf and Beach Club. This new development spearheaded by Discovery Land Company is located at and around the current Makena Golf and Beach Resort. This new community is set to be Maui’s most exclusive and high end luxury development to date. There are no single family homes for sale in the community yet, but there are some very high end home sites on the market in Maluaka Estates. There has been one lot sold and an additional three lots are under contract. All four lots have prices of $10,000,000 or more. It is possible that some of those buyers may have been potential buyers for other Makena properties. That said, Discovery Land Company is known to have a loyal following that might draw buyers who might not have otherwise looked at Maui.

I thought it was worth briefly revisiting the high sale in Makena. The sale at Keahou smashed the old Maui sales record by $14,700,000. I will be honest, the sales price is something of a head scratcher. The neighboring property is on a smaller piece of land and the house is 1,200 feet smaller, but it is currently listed for sale for $13,400,000. It seems like quite a stretch for there to be a $28,375,000 difference in value between the two homes. As much as it makes the new listing seem like a value, I think it points to the big sale as something of an outlier.

It will be interesting to see what happens over the rest of the year in Wailea and Makena. There is still a fair amount of inventory for buyers to choose from. There are twenty active home listings on the market currently with 7 properties in Makena and 13 in Wailea. Check out the full inventory of Makena and Wailea Homes for Sale on MauiRealEstate.com.

Ka’anapali
Ka’anapali had a pretty strong first eight months of the year with 9 total sales. That is up a little over the seven sales last year. The sales came from six different neighborhoods within Ka’anapali. There were 3 sales in the Pinnacle Neighborhood, 2 in the older section of Ka’anapli Golf Estates, 2 in the Summit at Ka’anpali, and a single sale in both Ka’anapali Hillside and Ka’anapali Coffee Farms. The high sale for the year to date was $3,500,000 for a four bedroom, three and a half bath home with 3,715 square feet of living space on a .65 acre lot in the Pinnacle.

There are 13 homes actively listed for over $2,000,000 in Ka’anapali. That should give buyers who prefer Ka’anapali some pretty good options. You can see the full inventory of Ka’anapali Homes for Sale on MauiRealEstate.com.

Kapalua
Kapalua has been the third busiest luxury home market this year with 7 closes over $2,000,000 for the year to date. All of the subdivisions of Kapalua with the exception of One Kapalua Place have seen sales activity thus far this year. There were 2 sales in Pineapple Hill Estates, 2 sales in Pineapple Hill, 2 sales in Plantation Estates and a single sale in Honolua Ridge. The high sale was $5,700,000 for the Honolua Ridge property. For a price tag of $5,700,000, that buyer now owns a four bedroom, five and a half bath home with 6,509 square feet of living space on a 2.82 acre lot. It has stunning views overlooking the renowned Honolua Bay.

The Kapalua market currently has 29 homes actively listed for sale. This is the biggest inventory of luxury homes of any of the communities around the island. This makes for an excellent selection for potential buyers. That may also allow for some opportunities. Typically, high end sellers have more staying power and will hold out for a premium. That said, you could make an argument that we have already seen a premium property go at a substantial discount with this year’s high sale in Kapalua. The home in Honolua Ridge sold for $4,000,000 below its original asking price and $1,995,000 below the list price at the time that it sold. You can see the full inventory of Kapalua Homes for Sale on MauiRealEstate.com.

Lahaina
There are two parts of Lahaina where high end home sale activity tends to be concentrated. The first is along the oceanfront. Homes along Front Street and Baby Beach typically start over $2,000,000. The other area is just south of the town in the neighborhood of Launiupoko. Launiupoko has been one of the stronger markets for high end sales over the last couple of years. There have been five sales in Lahaina thus far this year. Three of the sales have been in Launiupoko and two have been oceanfront homes. The highest priced sale was $3,500,000 for a 4 bedroom, 4 bathroom residential condominium with 3,675 square feet of living space on 8.513 acres.

There are 16 active luxury home listings for sale in Lahaina at this time. Eleven of the homes are in Launiupoko with the rest located along the ocean. Lahaina is another market where buyers have some pretty good options. Check out all of the current Lahaina Luxury Home listings on MauiRealEstate.com.

Upcountry
The Upcountry area of Maui tends to see fewer high end sales than the resort communities of the island. That said, there are some pretty spectacular estates located along the flanks of Haleakala. Kula and Olinda are places where you will see some bigger acreage estates. There are also some homes along Baldwin Avenue below Makawao that fit the luxury home mold. The first eight months of the year have seen only two sales above the $2,000,000 mark in the Upcountry Area. There was one sale in Kula and one sale in Olinda. Last year, there was just one sale over $2,000,000 in the Upcountry area in the first eight months of the year.

The highest priced sale Upcountry for the year to date was $3,500,000. That was for a 24 acre estate in Olinda. It included a 3,300 square foot, three bed, three bath home and a separate two bedroom cottage. The 24 acres property included three separate parcels of land all with their own water meter.

While there haven’t been a lot of high end home sales Upcountry this year, there has been an uptick in buyer activity over the last two months. There are four homes in Kula listed for $2,000,000 that are currently under contract. That is more than anywhere else on island. There are an additional 16 homes listed for more than $2,000,0000 currently on the market Upcountry. That means a pretty good selection for high end buyers looking for more privacy or a different feel than the resorts or the beach. You can see all of the Upcountry Luxury Home listings on MauiRealEstate.com.

North Shore
The North Shore of Maui has become an increasingly popular location for luxury home buyers over the last five years. Prior to this year, Paia and Spreckelsville was the focal point of high end sales while the Haiku market lagged behind. We saw something of a shift this year. The Spreckelsville market has had limited inventory, Paia has been quiet and Haiku has seen the strongest sales activity since the downturn began. There were three total sales over $2,000,000 through the first eight months of the year. Last year, there were six sales on the North Shore in the first eight month’s of the year. For this year’s sales, two were in Haiku and one in Spreckelsville. The Haiku sales were particularly notable as they were the first and second highest priced transactions for homes in that community. The highest sale was for the 38 acre Baldwin Estate. This historic property includes a 10 bedroom, 10.5 bathroom home with 8,716 square feet of living space as well as a number of outbuildings.

Buyers looking for North Shore luxury homes will find that market conditions are going to vary based on the specific community. Spreckeslville is arguably one of the only true seller’s markets for luxury homes on the island. There are no active home listings for more than $2,000,000. Over the last few years, roughly half of the homes that have sold in this neighborhood have sold before coming to market. Paia has been quiet and it currently boasts the largest inventory of oceanfront homes of any area on the island. I think there may be some values and/ or motivated sellers to be found among those listings. Haiku has seven active listings currently on the market giving buyers some good options. You can check out the current inventory of North Shore Luxury homes on MauiRealEstate.com.

Overall Maui Luxury Home Market Outlook and Thoughts
The Maui Luxury Home market continues to offer a broad cross section of homes for potential buyers. From the privacy of Upcountry Estates to Beachfront Luxury compounds, there is considerable depth of inventory. While a deep inventory typically gives buyers more leverage, that isn’t always the case with the luxury home market. Luxury home owners typically have the means to hold on to properties for longer periods of time and many are less likely to adjust their pricing. That said, there are still bound to be a few sellers out among the current inventory who may have higher motivations. The challenge is finding those sellers.

I would anticipate that the rest of the year will continue to see sales figures at or close to the levels we saw during the fall and early winter of 2014. While projected increases in interest rates have the potential to slow sales activity at lower price points in the market, the majority of the luxury sales involve cash transactions or private banking. The biggest threat to the high end market is the overall economy. If the recent stock market uncertainty continues, you may see some buyers postpone their purchases. Contact The Maui Real Estate Team if you are interested in buying or selling a luxury home on Maui. We would welcome the opportunity to sit down with you for a free consultation to discuss your needs.

Pete Jalbert