Maui Real Estate Blog
Maui Market Musings Volume XV
Welcome to the 15th edition of our market musings. The last musings was a little more of a backwards looking post as we reviewed notable numbers from the June Stats and took a deep dive into the land market during the first half of the year. This edition focuses on statistics that might be better suited to addressing current market conditions. We also take a longer look at the Wailea and Makena markets. We review the first six months of sales activity and take a look at current market conditions and the market outlook. There is a lot to digest in this post so you may want to be suitably caffeinated before proceeding.
While June was a month of substantive increases in inventory, thus far the month of July has seen more limited change. The inventory of single family homes is actually lower now than it was on June 30th. At that time, there were 241 active listings. As of July 23rd, the inventory decreased 3% to 234 active listings.
For the condo market, the inventory of active listings increased modestly. On June 30th, the number of active listings was 199. As of July 23rd, the inventory increased 7.5% to 214 active listings.
Maui’s single family home inventory trends appear to be diverging from the rest of the country when it comes to inventory. That said, we are seeing variability in our market place. Inventory and levels of activity vary by price point and community. We should have an updated break down of inventory trends by price point shortly after the first of the month.
As of July 23rd, 35.04% of all active listings reduced their price at least once. That is up modestly from July 4th when 34.03% of all active home listings reduced asking price.
For condos, 27.57% of all active condos reduced their price as of July 23rd. That is up from 24.63% of condos on July 4th.
We are little bit ahead of the national average when it comes to price reductions, but the number of price reductions appears to be increasing at a slower rate than national markets.
It is interesting to see our rate of price reductions increasing slowly. Prior to the Covid boom, Maui was always a place where sellers tended to be slower to reduce price. Longer days on market were more common. One question we find ourselves asking a lot around the office is what a new real estate normal will look like on island moving forward? Will we go back to typical Maui seller behavior pre-covid or will seller behavior more closely resemble mainland markets? It may take some time to determine the answer to that question.
Another metric we started tracking earlier in the year is the percentage or properties that go under contract within 10 days of coming to the market. Of the homes and condos listed between July 1st and July 8th, 31.91% went under contract within 10 days of coming to market. That is actually up from June 14th-21st when only 25.37% of listings went under contract within 10 days of coming to market. That said, this is also the first time this year when the percentage of homes going under contract within 10 days was lower than the same period of 2019.
It is also worth noting that there is difference between the home and condo market. Of the homes listed between July 1st and July 8th, 23.53% went under contract within 10 days of coming to market. Of the homes listed during the same seven day period of 2019, 25.81% went under contract within 10 days. The condo market continues to see properties go under contract at a brisker pace. Of the condos listed between July 1st and July 8th, 36.67% went under contract within 10 days. That is just ahead of condos listed during the same seven days of 2019 when 36.11% went under contract within 10 days
Some Quick Thoughts on Current Conditions
It’s a strange market out there. Buyer demand is well below what we saw during 2021 and earlier this year with far fewer properties under contract. That said, inventory levels remain well below normal in most communities around the island. It’s likely that the lack of inventory is one reason why we aren’t seeing more price reductions.
It seems as if there is a little bit stronger demand in the condo market than the single family home market judging by the higher percentage of properties going under contract within 10 days. That comes despite a little more condo inventory coming to market.
Buyers will find conditions less competitive than earlier this year. However, well priced properties in areas and price points with low demand can still generate multiple offers. Overall, sellers can expect longer days on market and fewer buyers. Sellers should be particularly mindful of market conditions specific to their community and price point when pricing their property. It’s also worth remembering that negotiation and give and take is a lot more likely today than it was six months ago.
Wailea and Makena Market Overview
This is the first of a handful of features we will be doing in our market musings looking at specific communities on the island. Today, we are focusing on the resort markets of Wailea and Makena. Its worth noting that I used the term markets plural. While our MLS lumps the two areas together, the two communities have differences that make them unique. Wailea is significantly more developed with large hotels, a shopping center and a lot more neighborhoods and condo complexes. While expensive, the entry point for Wailea is much lower than Makena. Makena is smaller, less developed and has the highest concentration of high priced homes on the island.
Wailea Home Sales
This is a look back at single family home sale activity in Wailea during the first six months of 2022. These are some of the most notable numbers from that time.
- Maui Realtors reported 17 homes sold in the Wailea Resort in the first half of the year. That is down 43% from the 30 sales reported during the first six months of 2021.
- Inventory constraints played a significant part in the reduced sales. Decreased demand may be another factor in the second quarter of the year, but it is hard to say definitively.
- Seven of seventeen sales closed for over asking price. Ten of seventeen sold for asking price or above. Demand was strong for the limited inventory available.
- Nine of the seventeen sales were reported to be all cash transactions.
- The median and average price of the homes sold in the first six months of the year is $2,800,000 and $3,478,441 respectively. This is actually down from last year when the median and average price of $3,475,000 and $3,973,168.
- To be clear, the value of homes in Wailea did not depreciate this year. This shift in medians and averages stems from a difference in the composition of inventory sold. The chart below shows the difference between the first halves of 2021 and 2022. While there were still a fair number of sub-$2,000,000 sales in 2021, there was also a much higher volume of transactions for $4,000,000 and above in 2021. This stems in part from the much lower inventory of homes above $4,000,000 in Wailea this year.
- The lowest priced home to sell during the first half of the year in Wailea closed for $2,270,000. That buyer purchased a 3 bedroom, 4 bath home with 2,562 square feet of living space and a pool in the Wailea Kai subdivision.
- The highest priced Wailea sale during the first half of the year closed for $8,750,000. The home in Wailea Highlands includes 4 bedrooms, 7 baths and 8,657 square feet of living space on just under a half acre.
- Wailea Golf Vistas experienced the most sales activity with 5 transactions. Wailea Pualani saw the second most sales with 4 transactions.
Wailea Condo Sales
The numbers below are some of the most noteworthy from the first six months of condo sales in Wailea.
- Maui Realtors reported 77 condo sales in Wailea during the first half of the year. That is down 51% from the 157 sales reported during January-June of 2021.
- Again, scarcity was a big factor in the decrease in sales. At one point in the first quarter, active Wailea inventory dipped to 6 condos. Some of the difference between the two years can also be attributed to new developer sales in Makali’i. The 2021 sales were boosted by 20 closes in Makalii based on contracts signed 2-3 years prior.
- Of the 77 sales, 26 or 33.77% sold for over asking price. An impressive 54 out of 77 sales or 70.13% of all transactions closed for asking price or above. Again, this points to strong demand and competition for the limited supply.
- Maui Realtors reported that 48 out of 77 or 62% of closed transactions were cash purchases.
- The median and average prices of condos sold in Wailea came in at $1,630,000 and $2,408,720 respectively. The median price increased 20.91% and the average price increased 26.56%. These numbers reflect not only increasing values, but also a greater proportion of high priced transactions.
- The lowest priced Wailea condo sale during the first part of the year closed for $650,000. That was for a studio unit in Wailea Ekahi.
- The highest priced condo to sell during the first half of 2022 is located in Wailea Beach Villas. The ground floor unit in the D building closed for $12,500,000. The 3 bedroom, 3.5 bathroom unit includes 2,889 square feet of living space and a private plunge pool.
- Wailea Ekahi and the Palms at Wailea had the most sales activity of any complex in Wailea Resort to start the year with 14 sales each.
Makena Home Sales
- Maui Realtors reported 7 home sales in the Makena area during the first half of 2022. That is the same number as what was reported during the first half of 2021.
- Two of the seven sales closed for over asking price. None of the homes sold for above asking. As you get to these price points, competition decreases and negotiation is more common.
- The median sales price for the 7 Makena homes sold is $17,200,000. The average sales price came in at $18,825,564. That is a 72% increase in median sales price over last year’s $10,000,000 sale. It is a 35.94% increase over last year’s average sales price of $13,848,071.
- This year’s low sale came in Makena came in at a $12,875,000. The oceanfront home in Makena Place includes 4 bedrooms, 4.5 bathrooms and 4,304 square feet of living space.
- The highest priced sale in Makena and the highest sale on Maui for the year to date closed for $26,490,700. That estate includes 8 bedrooms, 8 bathrooms, 10,464 square feet of living space plus a pool house on an acre across the street from the ocean.
- In terms of activity within subdivisions, two homes closed in Makena Place and two homes closed in One Palauea Bay.
Makena Condo Sales
- Maui Realtors reported 9 condo sales in Makena during the first 6 months of 2022. That is down 36% from last year’s first half tally of 14 sales.
- Two of the nine sales sold for full price. No sales closed for above asking price.
- The median and average prices of the 9 condos sold are $4,000,000 and $4,950,645 respectively. Median increased 42.98% over last year’s median of $2,797,500. The average price increased 26.89% over last year’s average of $3,901,500.
- The lowest priced condo transaction in Makena closed for $3,250,000 for a 2 bedroom, 2.5 bathroom 2,745 square foot unit at Na Hale O Makena.
- The highest priced condo transaction in Makena during the first six months of the year closed for $11,256,000. That was a Molokini Residence at the Makena Golf and Beach Club with 5 bedrooms, 5.5 bathrooms and 4,430 square feet of living space.
- Makena Surf saw the most sales activity during the first half of the year with 4 closes.
Wailea and Makena Market Outlook
Of course all of the sales referenced above reflect past market demand. The million dollar question, or twenty million dollar question in the case of some Makena residences, is what can we expect for the second half of the year? Surprising market behavior over the last two years makes any sort of prognostication a challenge and current economic uncertainty makes it that much harder. That said, it is worth at least touching on both the supply and demand side of the equation.
Wailea and Makena Inventory
On the supply side, there is still some variability by location and property type. There are currently 8 active home listings in Wailea with 4 pending. That is a pretty limited supply considering sales and current pending. It is worth noting that of that supply, a couple of sellers are reaching for some pretty big numbers for their respective neighborhoods. While record highs are normal of late, some of the prices are well above previous neighborhood highs. It is also worth noting that only 3 of 6 subdivisions have active inventory, and 5 of 8 listings are in Wailea Pualani.
There are currently 24 active condo listings in Wailea with 8 pending sales. A quick side note, the pending number does not include the 75 pending new developer sales at La’i Loa at Wailea Hills. This is up quite a bit from the 6 active listings on February 1. That said, it is still less than 2 months supply. Again, when honing in on certain condo complexes the inventory is particularly limited. There are six condo complexes with just 1 active listing and 5 condo complexes with no active inventory. It is also worth considering that 3 of the active listings are seeking prices well above all time highs in their complex. There are a number of other sellers seeking new high prices for their respective location or floor plan in their development.
There are currently 5 active home listings and 1 pending sale in Makena. That’s almost 5 months of inventory based on the first half of the year, but it is worth noting that the 7 sales during the first halves of 2021 and 2022 is pretty extraordinary activity. That makes the 5 active listings a healthy inventory for prospective buyers with the considerable means necessary to shop in this part of the island.
The Makena condo market inventory is literally zero. If you are looking for a place in one of the three condo developments or the Makena Golf and Beach Club, it is a waiting game.
The big unknown is what type of new inventory we may see through the end of the year. Inventory growth in July thus far is negligible.
What about Wailea and Makena Demand?
With Makena and Wailea predominantly second home markets, what type of demand will see from second home buyers in a shifting market? The amount of cash involved with transactions makes the market less sensitive, but not completely immune to increases in mortgage rates. Nationally, second home demand is down according to Redfin reports. What about some of the current market indicators we’ve used for the general market?
Of the eight properties listed in the area this month, two went under contract in less than 10 days or 25%. That is just a hair better than the overall Maui market. Of the current Wailea condo inventory, 29% of active listings reduced their asking price. For Wailea Homes, 28.57% of active listings reduced their price. For Makena Homes, 60% or 3 of 5 listings reduced their price. The Wailea numbers are below what we are seeing for price reductions island wide. The one caveat I might add is that historically, resort market listings are slower to adjust price. The Makena number is high, but it also is worth mentioning that pricing properties in the $10,000,000 plus range comes with its own set of challenges. These are large, very unique custom homes not as well suited to comparative valuations.
One last thing to mention is seasonality. Looking at the chart above, you can see that there is a general seasonality to the market in Wailea Home Sales with more properties going under contract during the first half of the year than the second. The same is true for Wailea condos. Makena is a little more random due to its small sample size. If the market follows typical behavior, we should expect less sales activity this year.
Based on all of the above, the Wailea and Makena markets should see less activity for the remainder of the year due to the combination of market trends, seasonality and limited supply. Barring a massive influx of supply and/or a significant worsening of the current economic situation, the limited supply should keep prices elevated.
A Little Maui Beauty to Brighten This Post
Contact The Maui Real Estate Team
Congratulations if you made it to the end of this post. It was a long one! It also must mean you are pretty interested in the Maui market. Feel free to Contact The Maui Real Estate Team with questions or for assistance buying or selling property on Maui. We would welcome the chance to be of assistance.
Maui Real Estate Blog
Wailea and Makena Market Report: 2013 Year in Review and 2014 Outlook
Earlier this winter, I decided to do some in depth market reviews on a handful of communities around the island. I was able to publish posts on Paia and Spreckelsville, before getting sidetracked. I have wanted to take on the resort markets of Wailea and Makena for quite some time. This is a post that has been sitting in some form of a draft for the better part of the month. A busy schedule as a Realtor and a new dad, combined with the breadth of this market has made it tough to put the finishing touches on this post. Today, I finally got over the hump.
The Wailea and Makena resort communities are home to some of the more expensive real estate on island. Homeowners are drawn by the weather, the incredible beaches, shopping, dining, resort amenities and golf courses. In this post, we wanted to compare 2013 sales to what we saw in 2012. We also want to provide a few thoughts on what you might expect for the rest of 2014 in the Wailea and Makena market. Since we are almost to the end of the first quarter of 2014, we have the advantage of being able to review some of the initial sales data for the year. Without further ado, here are the numbers for Wailea and Makena in 2013.
There were 27 homes sold in the Wailea area with a median price of $2,750,000 during 2013. There were 26 homes sold during 2012 with a median price of $1,387,500. That is roughly a 4% increase in sales volume and a 98% increase in median price.
During 2013, there were 123 condos sold in the Wailea area with a median price of $1,100,000. The 2012 numbers were 114 condos sold with a median price of $757,500. That is approximately an 8% increase in sales volume and a 45% increase in median price.
During 2013, there were 13 lots sold with a median price of $1,225,000. There were 5 lots sold during 2012 with a median price of $875,000. That is a 260% increase in sales volume and 40% increase in median price.
In addition to the numbers above, here are a few other numbers that I thought were worth sharing regarding the Wailea and Makena Real Estate market during 2013.
- Of the 27 homes sold, six were in the Makena area.
- The high sale was $9,200,000 for an oceanfront home at Makena Place.
- The Makena Place transaction was one of 14 sales over $2,0000,000. It was one of 7 sales over $5,000,000. In 2012, there were 8 sales over $2,000,000 with 3 sales over $5,000,000.
- There were only 2 homes sold for under $1,000,0000 in Wailea during 2013. That is way down from the seven sold under $1,000,000 in 2012.
- The high condo sale was $11,395,000 for a Villa at The Andaz Residences.
- The Andaz close was one of 34 condo sales over $1,500,000 in 2012. That was an increase over the 27 sold for $1,500,000 or more in 2012.
- Kai Malu and the Palms at Wailea were the condos that had the most sales activity with 23 sales and 16 sales respectively.
- Only 3 of the 123 condos sold were in Makena. There was one unit sold in Na Hale O Makena and two units at Makena Surf.
- There were only 2 condos sold in Wailea for less than $500,000 in 2013. That was down significantly from the 15 sold under $500,000 in 2012.
- The high sale for land was $10,000,000 for 159 acres across the street from the ocean in Makena.
- There were 5 bank owned sales (REO) in Wailea in 2013. That is a 50% reduction from the 10 that sold in 2012.
Looking at the Wailea and Makena sales data for 2013, the big jumps in median prices are arguably the most eye catching numbers. All too often the change in median prices can be misrepresented as a representation changes in property values. While it is safe to say there was some appreciation in Wailea, it is also pretty clear we didn’t see 98% increases in home values, 45% increases in condo values and 40% increases in land values. The big bumps in median come from a decrease in sales activity at the low end of the market and an increase in ultra luxury sales.
The inventory of homes under $1,000,000 and condos under $500,000 decreased sharply in 2013. Buyers searching for lower priced opportunities had options in places like Wailea Fairway Villas and Grand Champions. In 2013, inventory in both of those complexes decreased and prices increased. That pushed prices on all but two sales in those complexes above $500,000. The same trend was evident with Wailea Homes. In 2012, there were quite a few opportunities to get into the market below $1,000,000 in neighborhoods like Wailea Kai, Wailea Pualani and Wailea Kialoa. Those opportunities were far more limited in 2013 with only 2 home sales below $1,000,000.
While there were fewer bargain hunting opportunities, more buyers were willing to dish out a premium for Wailea and Makena Properties. There was a 26% increase in the number of condos sold over $1,500,000 and a 75% increase in the number of homes sold over $2,000,0000. This was part of an island wide increase in luxury sales activity. As we have postulated in other statistics posts on our blog, big years on the stock market tend to make for big years for luxury real estate sales on Maui.
Being that we are almost done with the first quarter, there is more opportunity to comment on current real estate market dynamics in Wailea and Makena. The chart below compares the number of properties sold this year as of March 17th with the number of properties sold last year through March 17th.
As you can see from the chart, the sales activity looks pretty similar to what we saw during the start of 2013. Home sales are up modestly by 2 transactions, condo sales are the same and land sales are off by 1 from last year’s pace. There were a few other things that I thought were worth sharing from year to date sales activity.
- As mentioned previously, we saw a decrease in sales under $500,000 for condos and under $1,000,000 for homes in Wailea during 2013. That trend has continued into 2014. There have been no condo sales under $500,000 and no home sales under $1,000,000 to date. There are no homes listed or pending for less than $1,000,000. There are only two pending sales under $500,000 for condos with no active listings in that price range.
- For the most part, the Wailea market is still trading for less than peak market prices. There is one exception though as Wailea Elua saw its two highest ever sales prices in the last couple of months.
- The high home sale thus far this year was $9,300,000 for an oceanfront home in Makena Place. As of March 17th, that was one of 4 home sales to date this year over $2,000,000 in Wailea and Makena.
- The high condo sale thus far this year is $4,450,000 at Wailea Point. As of March 17th, that was one of 9 condo sales over $1,500,000 in Wailea and Makena for the year to date.
What can we expect for the rest of the year in Wailea and Makena? Demand thus far appears to be close to what we saw last year. I would anticipate that to continue if the stock market and overall economy stay the course. We have seen a decrease in Canadian luxury home buyers with the Canadian Dollar off 10% from last year. That has the potential to decrease sales volume. With the exception of lower priced homes and condos, there appears to be a pretty healthy inventory for buyers to choose from. There is over a year of active inventory for homes and land. There is just under a year of active inventory for condos, but that inventory is likely to increase. New developments are likely to have some of the biggest impact on the market. We have seen two new development go to market thus far, with at least one more and possibly three more coming to market before the end of 2014.
The first new development to hit the market was small in listings and big in price tag. Makena Sunset will consist of four condominium homes located directly across the street from Maluaka Beach. The homes will be 4 bedrooms and 4 bathrooms with approximately 4,200 square feet of living space. There will also be an additional 1,400 square feet of lanai space. Each residence has its own private pool. There is a laundry list of additional amenities offered with each of these spectacular properties. One of the four listings is under contract. The remaining three properties are offered for $10,250,000 through Makena Wailea Real Estate. The Maui Real Estate Team may represent interested parties as their buyer’s agents.
The second new development to come to market this year was the Ridge at Wailea. This is a vacant land offering with homes sites up near the Hotel Wailea. Pricing ranges from $1,550,000 to $2,800,000 for the 9 lots that are roughly a half acre in size. This development is being represented by Wailea Realty. The Maui Real Estate Team can represent interested parties as their buyer’s agent. It will be interesting to see how well this development is received by the market. The last land offering in this range was the Bluffs at Wailea. That development came out during the market doldrums of the last real estate downturn and was not well received by buyers. That land is now going to be developed as condos (more on that below).
There is the possibility of one additional land offering hitting the market this year. A second phase of Wailea Golf Estates is planned and that would include 16 additional luxury home sites. The time frame to go to market has yet to be announced.
There is at least one condo development that should hit the market this year as well. Keala O Wailea will consist of 70 condos spread over 7 three story buildings. It will be built next to the Wailea Gateway Center at the site of the aforementioned Bluffs at Wailea. The 70 condos will include 4 floor plans ranging in size from 1196 square feet to 1510 square feet. The top floor penthouse suites will be the largest units. The Keala O Wailea will prohibit vacation rentals. The community will have a nice pool area and should have big views from that location. Pricing for the development has not been announced, but it has been suggested that the prices will be “affordable for Wailea.” To be clear, that doesn’t mean affordable housing by any standard definition, but we should see starting prices under $1,000,000. Additional information on the development and sales reservations should be coming some time around the middle of this year. As with any new development on Maui, it is not out of the realm that those dates could be pushed back. If the pricing holds true to what has been insinuated, I would expect Keala O Wailea will receive strong interest from buyers.
Makali’i at Wailea is a condominium development that is scheduled to be built across from the Fairmont Kea Lani Hotel in Wailea. This complex is supposed to go to market in the last quarter of 2014 with construction planned to start in 2015 and run through 2017. Preliminary plans for Makali’i call for 68 units spread over 17 buildings of four units each. The condos will feature a modern design with a lot of glass. I saw the preliminary sketches for the condos and they will be very unique from the current inventory in Wailea. It is expected that there will be two and three bedroom floor plans with roughly 1,500 to 1,700 square feet of living space. The condos should have excellent views. The community will have a pool and club house area for residents. Makali’i will also prohibit vacation rentals. I haven’t heard anything regarding the pricing for the condos, but I would expect that they will be at a higher price point than anything at Keala O Wailea.
The impact of the new developments on the Wailea and Makena markets will be interesting to watch. I have found that activity at new developments may mean slower activity at comparable existing condos. I would think places like Kanani Wailea, higher priced units at Wailea Fairway Villas and potentially Kai Malu could be impacted by a place like Keala O Wailea. We may see an overall decrease in sales volume as the new condo developments will be unlikely to see units close until construction is complete.
Contact The Maui Real Estate Team if you are interested in buying or selling property in the Wailea and Makena area. The Maui Real Estate Team would welcome the opportunity to sit down for a free consultation. You can also search the current inventory of Makena and Wailea Condos for Sale and Makena and Wailea Homes for Sale on MauiRealEstate.com.
Maui Real Estate Blog
Wailea and Makena Market Report
The South Maui Resort Community of Wailea is world renowned for it’s beautiful beaches, great golfing, fine dining, shopping and more. Makena is located just to the South of Wailea Resort. It offers its own stunning beaches, golf and a quieter setting. Both areas offer exclusive real estate and some of the most expensive properties on the island. While we are well past the first of the year, we wanted to provide a market update looking at how Wailea and Makena performed during 2012. We also give some thoughts on the 2013 market outlook.
There were 25 home sales in Wailea and Makena in 2012 at a median sales price of $1,410,000. By comparison, the 2011 numbers were 29 home sales at a median price of $2,100,000. That calculates to a 14% decrease in activity and a 33% decrease in median price.
There were 114 condo sales in Wailea and Makena during 2012 with a median sales price of $757,500. There were 101 sales in Wailea and Makena during 2011 with a median sales price of $900,000. That is a 13% increase in activity and a 16% decrease in median price.
There were 5 land sales in Wailea and Makena in 2012 at a median price of $875,000. The 2011 Wailea and Makena Land sales figures were 5 sales at a median of $2,000,000.
Here are a few other numbers of note that I thought were worth sharing about the 2012 Wailea and Makena Real Estate Market:
- The high home sale for the year was $9,850,000 for an oceanfront home in Makena Place. Also of note, there was an estate along Keawakapu Beach that closed for $23,000,000. This was classified geographically as a Kihei closing, but that area is often thought of as part of Wailea. About half the sales closed along that stretch of beach are classified as Wailea sales while the other half are Kihei closes.
- There were a total of eight home sales over $2,000,000 in Wailea/Makena. There were fifteen $2,000,000 plus sales in the area during 2011.
- Four of the twenty-five home sales were in Makena. There were six Makena sales in 2011.
- The low home sales price was $775,900 for a bank owned home in Wailea Pualani.
- The high condo sale was $5,992,000 for a three bedroom/three bath unit at Wailea Beach Villas
- There were 28 condo sales over $1,500,000 in 2012. By comparison, there were 41 condo sales over $1,500,000 in 2011.
- Grand Champions was the Wailea condominium with the most sales activity. There were 16 closes in 2012.
- There were nine bank owned sales in Wailea and Makena during 2012. There were twelve bank owned sales in 2011. Wailea and Makena have not seen near the number of bank owned listings as other communities.
The Wailea and Makena Real Estate markets saw improved overall activity during 2012 overall. Much of this increased activity occurred at lower price points for this market. The sharp dip in median prices for homes and condos reflect a slow down in activity at higher price points in the market. There was a 47% decrease in homes sold over $2,000,000 and a 32% decrease in condos sold over $1,500,000. This is in line with some of the trends we saw island wide.
What will 2013 bring for the Wailea and Makena Real Estate markets? We have the advantage of almost two months of activity to get a sense of what is happening in the market. For home sales, we are seeing signs of improvement. There are already four homes sold with six more pending sales. Of note, six of the pending or sold homes are priced over $2,000,000. If we were to continue at this pace, it would bode well for ultra luxury homes in Wailea and Makena.
The Wailea and Makena condo market appears to be following a similar pace to last year. There are 38 condos that have either sold or are currently pending in the area. The ultra luxury condo market does not appear to be taking off at the same pace as the ultra luxury home market with only five condos over $1,500,000 that are either pending or sold since January 1.
Some markets around the island have a muddled 2013 outlook due to a lack of inventory. What about Wailea and Makena? The chart below shows the Wailea and Makena home inventory by price point and compares it the 2012 Wailea and Makena Home Sales by price point.
The Wailea and Makena home market still has over a year’s worth of inventory based on last year’s absorption rates. The lower price points of the market are the only places were scarcity could be an issue at this point. There is only one active listing under $1,000,000 compared to the six sales in that price range in 2012. There is only one active listing priced between $1,000,000 and $1,250,000 compared to three sales in 2012. I surmise that this is going to be a price range with very limited opportunities during 2013. Bank owned opportunities are likely to be few and far between, and we may well see some upward price pressure. As you get higher in price, the options increase. Over $2,000,000, there is a few year’s worth of inventory based on last year’s absorption rate. That being said, it looks likely that absorption rate may be increasing based on early 2013 activity.
The chart below looks at 2012 Makena and Wailea Condo sales by complex and compares them to the current active inventory of Wailea and Makena Condos.
The Makena and Wailea Condo market appears to have a similar outlook for 2013 compared to the home market. Lower priced condos like Wailea Fairway Villas and Grand Champions are showing increased scarcity. As a result, you are seeing some upward price pressure. As you move to the condo complexes with higher price points, you start to see greater depth of inventory. One thing that differentiates the condo market is that there are two new developments on the market in 2013. The Suites at Wailea is a new offering that just came on the market in January. This low density vacation rental is situated at the top of Wailea. It is a unique offering in that there is a special focus on services and amenities. All owners will be required to purchase membership in Club 72. Club 72 membership provides access to the health spa, preferred dining at Capische Restaurant, Cooking classes, valet services, limo service and a lot more. The one bedroom condos at the Suites at Wailea Start in the low $600,000s. While the offer price is relatively low for Wailea, the monthly association and Club 72 fees come in at approximately $2,000 a month. Initial market feedback has been relatively tepid. It will be interesting to see if the market wraps it’s head around this amenity heavy offering.
The other new condo development that came on the market in January is Andaz Wailea. This much anticipated beachfront resort is situated on 15 acres on Mokapu Beach. There will be a traditional luxury hotel component and 19 luxury villas on the property. Twelve of the luxury villas are included in the initial offering. The villas will range in size from just under 2,000 square feet to over 4,000 square feet. Pricing ranges from just over $5,000,000 to over $11,000,000. Andaz is still under construction with the hotel set to open during the summer of 2013. The residences are expected to be completed a little later in the year. These ultra luxury condos are not being listed on the multiple listing service, but the developer is currently taking binding reservations. Contact The Maui Real Estate Team if you are interested in learning more about the villas listed for sale at Andaz Wailea.
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What does all of the above mean for those who are interested in buying a property in Wailea and Makena in 2013? Buyers shopping for condos under $1,000,000 or homes under $1,500,000 will find that they have limited inventory to choose from. Well priced homes and condos in this range tend to go quickly when they do come on the market. As buyers go up in price range, the inventory and increases quite a bit. Ultra Luxury condo buyers in particular have a lot to choose from between Andaz and existing offerings like Wailea Point and Wailea Beach Villas. That being said, I would be hard pressed to call it a true buyer’s market. Many of the sellers in this market have deep pockets and can afford to wait for more favorable market conditions. Sellers who are considering entering the market, will need to adjust their strategy in part based on their price point and their urgency. Sellers who are anxious to redeploy their capital will likely need to price aggressively to ensure a shorter time on market.
The Makena and Wailea Real Estate markets offer a lot of options for interested buyers. Contact The Maui Real Estate Team today for a free consultation that will help you identify potential properties that might fit your needs. You can check out the full inventory of Makena and Wailea Homes for Sale, and Makena and Wailea Condos for sale on MauiRealEstate.com.
Maui Real Estate Blog
Wailea and Makena Mid Year Real Estate Market Update
We may be almost midway through August, but I wanted to follow through on our promise to provide midyear market updates for a hand full of Maui communities. Today, we are going to cast the spotlight on the resort communities of Wailea and Makena. This corner of Maui is a a world renowned resort travel destination. Wailea and Makena are synonymous with stunning beaches, great golf, fine dining, luxurious resorts and high end shopping. All of these amenities combine to make Wailea and Makena desirable locales for second home owners. The following is a comparison of the sales numbers between the first half of 2012 and 2011 for the Wailea and Makena luxury markets.
There were 17 home sales reported in Wailea/Makena with a median sales price of $1,635,000 during the first six months of 2012. During the same period of 2011, those totals were 10 sales with a median price of $1,472,500. That is a 70% increase in volume and an 11% increase in median prices. There were 58 condos sold in Wailea with a median price of $780,000 during January through June of 2012. The numbers for the first half of 2011 were 65 condos sold with a median price of $975,000. That is a 17 percent drop in volume and a 20% drop in median price. There was only one land sale in Wailea/Makena during the first six months of 2012. There were two during the first six months of 2011.
Here are some other noteworthy numbers for the first half of 2012.
- There were three home sales in Makena during the first six months of 2012. By comparison, there were no sales in Makena during the first six months of 2011. On the other side of the coin, there were no condo sales in Makena during the first six months of 2012. There were four Makena condo sales in the first six months of 2011.
- The high sale during the first six months of 2012 was $9,850,000 for a 4,155 square foot home oceanfront home in Makena Place. The high in the first six months of 2011 was $5,200,000 for a 5,967 square foot home in Wailea Golf Vistas.
- The highest priced condo transaction in Wailea for the first half of 2012 was $5,992,000 for a 2,983 square foot unit at Wailea Beach Villas. The high condo sale in the first half of 2011 was $12,500,000 for a front row unit at Wailea Beach Villas.
- The lowest priced home sale during the first six months of 2012 was $775,000 for a bank owned home in Wailea Pualani. The lowest priced home sale in the first half of 2011 was $900,000 for a home in Wailea Kai.
- The lowest priced condo sale during the first six months of 2012 was $400,000 for a two bed/two bath unit at Grand Champions. Last year, the low priced sale was $360,000 for a one bedroom, bank owned unit in Wailea Ekahi.
- There were a total of six REO sales and one short sale in all of Wailea and Makena during the first half of 2012. The numbers were eight REO sales and eight successful short sales in all of Wailea and Makena during the first half of 2011.
The most striking element of the Wailea and Makena numbers was the divergence in market performance between homes and condos. While activity was clearly up for home sales, the numbers trended down for the condo market. I can’t say there is a clear cut reason for the difference in activity. That being said, I have a few thoughts. Looking at the home side of the equation, the bump may be a case of buyers responding to values. At our broker Billy’s suggestion, I looked at original asking price vs. sales prices for homes in Wailea. Looking at the five highest priced sales, the difference between original asking price and sales price was 10%, 15%, 53%, 28% and 20% respectively. The 10% number difference between original list price and sales price on the Makena Place sale may actually be a little low. This home had been on and off the market without selling dating back to 2007. Back then, it was priced as high as $14,900,000. While I can’t say this unequivocally, it appears that buyers responded to these properties in part because of a perception of value. An increase in well priced properties may well be the driver for the increase in activity.
I think this is something worth noting for luxury sellers. There is still a pretty healthy luxury inventory on the market. The buyers like Peter Thiel are more an exception than a rule. Luxury buyers are showing that they are value conscious in this market. Motivated sellers may want to take heed and position their home so that it stands out as a value among the rest of the inventory.
The reasons for the decrease in activity in the luxury condo market are a little murky. In my search for answers, I compared the sales volume of individual condo complexes in the Wailea and Makena area. You can see this comparison in the chart below.
There was one thing that stood out the most while looking at this chart. There appears to be a sharper decline in activity on the high end of the condo market. Among the places that saw sharper declines in activity, Wailea Palms is the only complex with a median less than $1,000,000. Other complexes with more notable declines included Papali, Wailea Beach Villas, Hoolei, Wailea Point, Makena Surf and Na Hale O Makena. All of these complexes are condos with median prices over $1,000,000 and in some cases well over $2,000,000. I looked back at all of the sales and my suspicions appear to be supported. There were 30 sales over $1,500,000 during the first six months of last year. This year that number shrank to 15 sales. What’s driving a high end condo slow down in Wailea and Makena? That’s tough to say. The decline in volume at Papali and Hoolei may stem from a decrease in inventory. These are new developments that have sold all but a few of the original developer listings. There is only one new developer listing remaining at Papali and the majority of the twelve listings at Hoolei are resales. With the rest of the luxury market, lack of inventory isn’t driving the decline in activity. There are an additional 39 condos on the market over $1,500,000. If these sellers are serious about selling, they may want to take a page from the book of Wailea luxury home sellers and start to sharpen their pencils.
The land market in Wailea and Makena remains limited. The one sale this year was for a property in Makena with upside development potential. There are fourteen vacant lots listed currently. Two of the fourteen are under contract. Looking at this inventory, many of these lots are resales. I can’t see a lot of activity in this market segment unless more of these listings become values in the eyes of buyers.
Contact The Maui Real Estate Team if you have questions or would like assistance buying or selling Wailea and Makena Properties. Search MauiRealEstate.com for the current inventory of Makena and Wailea Condos for Sale. You can also peruse the current inventory of Makena and Wailea Homes for Sale.