Maui Real Estate Blog

Sneak Peek at the June 2014 Maui Real Estate Statistics

June is always a fun month on Maui. With events like the Maui Film Festival, The Kapalua Food and Wine Festival and the Slack Key Guitar Festival, it is little wonder why the month always seems to pass by in a blink of the eye. The end of the month also means another opportunity to take the pulse of the Maui Real Estate market. This Sneak Peek at the Maui Real Estate stats takes a look at June’s median prices and sales volumes compared to June of 2013. I also want to share some of the other interesting numbers that I came across while compiling the June sales volumes. I give my thoughts on the state of the market, and I give a sense of what the sales might look like in the coming months as we document the number of properties that went under contract over the last month. Without further ado, here are the numbers for June.

June 2014 Maui Real Estate Sales Volumes and Median Prices

This table compares sales volumes for homes, condos, and parcels of land in Maui County during June 2013 and June 2014.
This chart compares the June 2013 and June 2014 sales volumes for Homes, Condos and Land in Maui County, Hawaii

There were 90 homes sold in June with a median sales price of $535,000. Last June there were 92 homes sold with a median price of $579,500. That is a 2% dip in sales volumes and an 8% dip in median price.

There were 94 condos sold last month with a median price of $444,500. In June of 2013, there were 125 condos sold with a median of $400,000. That equates to a 25% drop in volume and an 11% jump in median price.

There were 18 lots sold on Maui in June of 2014 with a median of $545,500. Last June there were 19 sales reported with a median of $469,260. That is a modest dip in volume of 5% and a 16% increase in median price.

Other Noteworthy Numbers from the June 2014 Real Estate Sales Activity in Maui County

While compiling the numbers above, I came across a few other numbers that I think are worth sharing.

  • The high home sale for the month was $5,700,000 for a cottage on 4.55 oceanfront acres in Olowalu.
  • That was one of six total home sales over $2,000,000 for the month of June. There were 2 home sold in Ka’anapali, 2 in Wailea, and one in Launiupoko.
  • The first six months of the year proved to be strong for luxury home sales. There were 37 homes sold for over $2,000,000 during the first half of 2014. There were 26 sold in the first half of 2013. That is a 42% jump in activity over the first six months of 2013.
  • The highest priced condo sale last month was a 3 bedroom unit at Hoolei that closed for $3,250,000.
  • The Hoolei sale was one of 7 sales over $1,500,000 last month. Hoolei was a hotbed of high end activity with two other sales over $1,500,000. The other condo complexes with big transactions included Ka’anapali Ali’i, The Terraces at Manele Bay on Lanai and Honua Kai (two sales).
  • This was also the end of a strong first half of 2014 for luxury condo sales. There 51 condos sold for over $1,500,000 during the first six months of the year. Last year there were 31 condos sold for over $1,500,000. That is a 65% jump in activity.
  • There were 12 REO or bank owned sales in June. That is up over last June’s 5 sales. There appears to be a little bit of an uptick in bank owned properties coming on the market. I will have a few more thoughts on the bank owned numbers below.

The Numbers That Really Stood Out and What They Mean

The condo numbers stood out to me the most of any part of the June stats. This is two months in a row where condo sales have been significantly lower compared to last year. As mentioned above, the luxury side of the market is outperforming 2013 so that means other parts of the market are under performing. Over the last two months, the primary culprit appears to be condos priced under $500,000. There were 120 sales priced under $500,000 in May and June of this year compared to 181 during May and June of 2013. That’s a 33% drop in activity. Why the big drop in sales? Shrinking inventory and price increases are playing a part. The inventory of condos under $200,000 that prohibit vacation rentals has seen a big dip. Many of those condos that were in that range last year are well into the $200,000s this year. We have also seen a pretty big drop in the number of vacation rental condos available under $400,000.

Home sales experienced a much smaller drop in activity in June compared to last year. Why are home sales doing a little better than condo sales? Anecdotally, it also appears as if we are seeing an uptick in inventory in the $600,000 and under range. My clients looking at entry level homes and properties just above that level have seen more options lately. Local buyers are feeling pressure to snatch up the new inventory as entry level homes have seen strong appreciation and interest rates threaten to rise on better economic news.

Some of the increased inventory we are seeing on the market is bank owned. This was one of the first months in a while where bank owned sales outpaced sales from the same month a year ago. This looks like it might sustain itself for at least a couple of months, and it is worth watching over the longer term. There were 19 bank owned listings that came on the market in June. That is the highest number of bank owned listings we have seen in a month since May of 2012. We are 3 days into July and there are already 3 new REO listings. Hawaii has a big backlog of properties facing judicial foreclosure moving through the court system. It appears as if some of the backlog might be starting to move through the courts. This bank owned inventory may help satiate some of the pent up demand from buyers.

Bargain hunters who are looking to find a bank owned home for a steal of a price may be disappointed. Most banks seem to have a different pricing strategy in a rising market vs. a falling market. While many banks were dumping their assets below comparable sales as the market was falling, they are seeking market prices in the rising market. In some cases, they are pricing above the market and having to adjust pricing downward. While there may be a few bargains here or there, REOs won’t provide the same opportunities that they did 3-4 years ago.

June Pending Sales

As mentioned previously on the blog, property sales can be a lagging indicator for the market due to transaction times. As a result, we have been keeping track of the pending sales on our blog. These numbers should also give you some sense of what we might expect for sales volumes in July and August.

This chart compares the number of properties that went pending in Maui County during June of 2014 and June of 2013

The number of homes that went under contract in June was up 28% over the number that went under contract in June of 2013. Combined with the fact that there were more homes going under contract in May, I would anticipate stronger home sales for July. The number of condos that went under contract was down 24% compared to last year. That is a continuation of recent trends where condo pendings have been lower compared to last year. The one outlier is land sales. Land sales activity appears to be way down in June with a 74% drop in the number of properties going under contract.

Thoughts for Prospective Maui Home Buyers and Sellers

What does all of this mean for buyers and sellers. While there may be some new inventory out on the market for home buyers, there has been some pent up demand as well. A couple of the more intriguing new listings that I saw hit the market this week are already in multiple offer situations. That means buyers looking at the middle and the lower price points in the market will need to have their ducks in a row when looking. Buyers who need financing assistance should be pre-approved prior to looking. If you see a well priced property that fits your needs, you will need to act quickly or another buyer will beat you to the punch. Sellers have a bit more of a mixed bag. There are still some pockets of the market with higher inventory. Sellers in those market that want to sell quickly may need to lower their pricing expectations to stand out from the competition. Over priced properties are sitting even in some of the busier segments of the market. Contact The Maui Real Estate Team if you are considering buying or selling a home on Maui. We would welcome the opportunity to sit down with you for a free consultation.

Pete Jalbert

Maui Real Estate Blog

Unofficial November 2012 Maui Real Estate Statistics

It’s the most wonderful time of the year according to Andy Williams. I can’t argue with Andy. December is off to a beautiful start on Maui with sunny skies, calm winds, glassy waves, more whale sightings and clear views of Haleakala and the West Maui Mountains. That also means November is done and it is time for me to crunch some numbers and come up with our unofficial November Maui Real Estate Statistics. November was another surprisingly busy month for island real estate. While the fall months are typically the slowest for real estate activity, that hasn’t been the case this year. Here are the numbers I came up with after looking through the sales data followed by some context and analysis of the current Maui Real Estate market conditions.

A Comparison of Real Estate Sales volumes during November 2011 and November 2012 for Maui County, Hawaii
A comparison of real estate sales volumes for Maui County during November 2011 and November 2012

By my count, there were 83 homes sold this November at a median price of $470,000. Last November, there were 76 homes sold at a median price of $422,500. That calculates to a 9% increase in volume and a 13% increase in median prices when comparing the two Novembers.

There have been 96 condos reported sold this November at a median price of $390,945. By comparison, 77 condos were reported sold last November at a median price of $265,000. That is a 25% increase in volume and a 48% increase in median prices between this November and last November.

I counted 22 land sales in Maui county during November of 2012 with a median price of $455,000. By comparison, there were 9 land sales during November 2011 with a median sales price of $505,000. That calculates to a 244% increase in sales volume and a 10% decrease in median prices.

There were quite a few other numbers that I thought were worth sharing from my research compiling these statistics.

  • There were 21 bank owned sales last month. Most of those sales were single family homes, but surprisingly 9 of the 21 were land sales. By comparison, there were 39 bank owned sales in November of 2011. That is a 54% drop in bank owned sales. The lower number of bank owned sales should be a continuing trend with limited numbers of bank owned properties coming on the market.
  • There were 24 short sales that closed successfully last month compared to 22 sales that closed in November of 2011. We are continuing to see a steady supply of short sale closes as banks are working more proactively with homeowners who are delinquent with their mortgage payments.
  • The highest sale for the month was over on the Island of Lanai. A buyer paid $4,150,000 for a 5,227 square foot ocean view home in the Manele Bay area of the island. I will have a little more on Lanai’s market in the discussion below. Last November, the high sale was $3,000,000 for a home in the Pineapple Hill area of Kapalua.
  • There were two homes sold over $2,000,000 in Maui County including the one on Lanai. There were 10 condos sold in Maui County over $1,500,000 this November. By comparison, the November 2011 numbers were 2 homes sold and 4 condos sold above those respective price points.
  • Buyer activity remained strong with 249 properties going under contract during the month of November. This means November 2012 trumped October 2012 for the title of busiest month for new escrows this year. This is actually one of the busiest months in several years. As discussed in Part II of our Unofficial October Stats, this increased activity is a reflection of a shift in the market.

There are quite a few things worthy of discussion in this month’s Maui statistics. First things first, I want to provide a little context on some of these stats. The increase in condo medians is a number that jumps off the screen. This is a dangerous stat that is easy to misinterpret. To be clear, condo values on Maui have not increased by 48%. This is a classic case of medians changing due to big shifts in sales activity at different price ranges. In November 2011, there were ten sales under $100,000. This November, there was only one sale under $100,000. Shrinking inventory at the lowest price ranges combined with modest price increases translates to far fewer sales below $100,000. Conversely, there was an increase in luxury condo sales this month with ten sales over $1,500,000. That compares to four sales over $1,500,000. More high end sales and less low end activity means a bump in median value regardless of what is going on with property values. While there have been some price increases between this year and last in segments of the Maui condo market, those increases in value have been far less than 48%.

The land market is another place that produced eye catching numbers with a 244% increase in sales volume. It is important to keep in mind that part of the reason for the dramatic increase can be attributed to the low number of sales in November 2011. There are some other factors in play as well. We have seen a few small spikes in land market activity over the last couple of years. Most of the spikes could be attributed to buyers responding to values in the market. There were a total of nine bank owned sales in the land market last month, and it can be argued that each of these sales were good comparative values. If the market stays true to recent form, we might expect to see land sales volume dip again next month. That being said, there is a part of me that wonders if we might see more sustained activity in the land market in the coming months. With inventory shrinking on the home market, there may be more buyers looking for alternatives in the land inventory.

As noted above, the high sale of the month for Maui County occurred on the Island of Lanai. In addition to that home sale, three of the ten condo sales over $1,500,000 were in the Manele Bay area of Lanai. When it was announced that Larry Ellison had purchased the island of Lanai, I speculated that there may be an uptick in the Lanai second home market. It appears that this may be coming to fruition and there is something of a Larry effect in play. In the first six months of the year, there was only a single close over $1,000,000. After Mr. Ellison’s purchase, there have been five sales over $1,000,000. Overall, there were 14 properties sold in the first six months before the Ellison announcement, there have been 18 closes in the five months after the announcement with a healthy volume of properties under contract.

The Island of Lanai as seen from Maui

So what is the big picture on Maui? As it stands, it is clear that our slow season has been anything but slow. We are in a period of heightened buyer activity. Limited inventory, low interest rates and improved consumer confidence have stoked the fires of the market and resulted in increased sales volumes. The tighter inventory and increased demand has also resulted in some modest price increases in a lot of different market segments. Homes and condos priced at or below the median sales price are more likely to have seen some upward price pressure. With December marking the start of our peak tourism and real estate seasons, it would appear that the dynamics are in place for a continuation of current trends. In other words, we should see more sales and modest price increases. That being said, there is a pretty big caveat. While it is likely that inventories will remain relatively tight, consumer demand could shift with any economic challenges. With fiscal cliff negotiations still outstanding, there is an air of uncertainty in the economy.

What does that mean for buyers and sellers? If we see a continuation of current conditions, buyers should expect a competitive landscape. Well priced properties will often attract multiple offers. Over asking sales prices are common. Buyers that require financing should absolutely get pre-approved with a lender prior to looking at properties. That will give you a better sense of your budget, and a pre-approval letter is a big help when competing against other buyers. Many sellers are asking for pre-approval letters with offers. Sellers will find an interesting market place. Well priced, well maintained properties are selling quickly. Overpriced properties are languishing with little interest. Sellers should look closely at recent comparable sales when determining go to market pricing. This type of market demands professional, experienced representation. Contact The Maui Real Estate Team for assistance buying or selling Maui Real Estate.

Pete Jalbert

Maui Real Estate Blog

Official March 2012 Maui Real Estate Statistics

Last week the official March Maui Real Estate Statistics were released by The Realtors Association of Maui (RAM). The numbers that they released mirror what we posted earlier in the month via our Unofficial Stats. The official stats provide a little more granularity with community level data. They also provide monthly data going back to January 2007 for additional context.

If you have read these official posts before, you might know the one other thing that I like to look at with the RAM stats is their inventory tracking. RAM executive Terry Tolman publishes the current volume of listed inventory for homes, condos and land. The general trend has been shrinking inventory. This month, we saw a slight uptick in home inventory and a slight decrease in condo and land inventory. We are seeing the impact of inventory on the low end condo market where there has been a modest in prices. Scarcity and positive rent vs. buy comparisons have finally brought some pricing stability to this hard hit segment of the Maui Real Estate market. Inventory is likely to remain an important factor in market dynamics. There has been some rumbling that we may see an uptick in bank owned inventory coming to the market this summer. It will be interesting to see if this is true, and if it would be sufficient to have an impact on market dynamics. We will continue to monitor market inventory on the Maui Real Estate Blog. Contact The Maui Real Estate Team with questions or the market or for assistance buying or selling Maui Real Estate.

Pete Jalbert

Maui Real Estate Blog

Unofficial August 2011 Maui Real Estate Statistics

The Maui Real Estate Team hopes everyone had a great Labor Day Weekend. In between weekend fun, I took some time to sort through our Realtor’s Association database to look at last month’s sales activity. The numbers below are the “unofficial” Maui Real Estate statistics for August. They provide something of a sneak peak of what you will see in the official stats that will likely be released by the Realtors Association of Maui sometime later this week. As always, I always give some context for the numbers and a few thoughts on what they mean for the Maui market.

Thus far, there have been 81 sales reported for August 2011 at a median price of $410,000. By comparison, there were 69 sales in August of 2010 at a median price of $460,000. That represents a 17% increase in sales volume and an 11% decrease in median price when comparing this August and last August.

I counted 86 condo sales in August 2011 at a median of $266,000. The August of 2010 numbers totaled 81 sales at a median price of $310,000. That translates to a 6% increase in sales volume and a 14% decrease in median price when comparing this August to last August.

There have been 11 land sales reported in August at a median price of $180,000. This compares to 7 sales at a median of $387,500 during August of 2010. That translates to a 57% increase in volume and a 54% decrease in median price.

Short sales and Bank Owned Properties (REO) continue to be significant market drivers for Maui Real Estate. There were 55 REO sales and 19 short sales that closed last month. Of the 81 home sales, 42 were REOs or short sales. That is approximatley 52% of the home transactions. Of the 86 condo closes, 30 were REO or short sales. That equates to roughly 35% of the total condo sales. Two of the eleven land sales were REOs.

Looking at the numbers above, it was kind of a ho hum month with nothing too out of the ordinary among the sales figures. I was struggling with writer’s block earlier, but I was able to muster a few thoughts on the stats and some additional nuggets that I came up with while mining the data.

Overall, I see the continuation of some of the general trends we have seen throughout the year. Home sales outpaced the 2010 volumes, but not by huge margins. Medians continue to come in lower that the 2010 monthly medians. The dip in medians is accounted for by adjustments in value and a high volume of low priced closes driven largely by bank owned sales. August was a pretty big month for bank owned home sales with a total of 30 closes.

Condo volume for August of 2011 outpaced the volume for August of 2010 by a relatively small margin. That difference would have been a little larger were it not for for a bump in sales totals in August 2010 due to long term new development closes. As much as I hoped to never type the words “Honua Kai Effect” again, we saw it in play this month albeit on a much smaller scale. There were only two long term new developer contract closes in August 2011 versus ten in August 2010. Speaking of new developer closes, I would be remiss if I didn’t mention the impact of current new developer offerings. There were 17 additional new developer closes for condos this month. These were all based on recent contracts. New condo developments are offering good incentives and compelling prices to stay competitive in a buyer’s market.

Land sales volume has been down this year overall, but August 2011 outperformed August 2010. The median sales price for land was down pretty substantially when comparing August 2011 to August 2010. The monthly median of $180,000 was the one sales number that raised my eyebrows a little. At face value, this month’s median is a head scratcher considering that there is limited inventory available for under $200,000 on Maui. The nice thing with the small sample size for land is that it is easy to determine what is driving medians. I looked through the eleven sales and found an interesting cross section of closes. Among the sales were two lower priced parcels on Molokai, a one acre parcel with title and access issues in Wailuku and a small parcel in Wailuku that was formerly home to a large radio antenna. These one off purchases and a low number of high end sales helped to drive down the median. While we are seeing values slip in the land market, changes in medians do not mirror actual decreases in value.

I thought it was worth touching on the luxury market numbers I saw while combing through the stats. We have seen some pretty strong ultra luxury activity over the last couple of months. This August we saw three home sales over $6,000,000 including a new North Shore record of $9,600,000 for an oceanfront estate in Spreckelsville. That means we have now seen new record high sales for the island, the North Shore, Kapalua and Wailea/Makena this year. The three sales over $6,000,000 in August of 2011 compares to one sale over that price in August of 2010. On the land front, there was a big sale Upcountry with 236 acres closing for $6,250,000. This was the former Kula ‘I’o development that never quite got off the ground. High end condo sales were actually down a little this August compared to last year with five sales over $1,500,000 compared to six in 2010.

I thought it was worth noting that there were two luxury condo sales that really caught my eye. Both were under that $1,500,000 barrier that I used as a dividing line for luxury condo closes. A Na Hale O Makena unit closed for $925,000. That was the lowest priced close in the complex since 2003. There was also a Kapalua Ironwoods that closed for $1,100,000. You have to go back ten years to see prices in Ironwoods at that price level. These sales make for an interesting contrast with some of the record highs that we have seen in the luxury market. It is hard to draw too many conclusions from these two closes other than the fact that it is a pretty schizophrenic real estate market. You could also argue that ultra luxury record closes are not indicative of the performance of the overall Maui luxury market.

What does all of the above mean in the scheme of the greater Maui Real Estate market? What is the outlook for buyers and sellers? Overall, the data still seems to indicate that this is a buyer’s market. That being said, some buyers may find the inventory limited in some market segments. There can also be considerable competition for the best values that come on the market. Sales above asking price are common among the best bank owned deals. Buyers who require assistance with financing should contact a mortgage professional to get pre-qualified before beginning their search. There are some really good interest rates available, but strong credit and employment are necessary to take advantage of the better financing options. Buyers should also be aware that banks are closely scrutinizing the condition of the properties being purchased. Homes in poor condition may not be able to be financed or they may require some sort of renovation loan. Sellers need to closely evaluate their particular market segment when developing a pricing strategy. Some market segments still have excess inventory. Other segments may still be seeing significant competition from bank owned properties and short sales. In the condo market, new development offerings can also be stout competition for conventional sellers. In these market conditions, it pays to work with a knowledgeable, full-time Realtor. Contact the Maui Real Estate Team with questions or for assistance buying or selling Maui Real Estate.

Pete Jalbert