Welcome to Maui Real Estate Musings Volume XIV! The fourteenth edition of the musings looks back at some of the notable numbers from the June 2022 Maui Real Estate Statistics. There is also an in-depth look at the land market during the first half of 2022. Without further ado…

Notable Numbers from the June Maui Real Estate Statistics

The numbers below are from just the island of Maui. They do not include sales from the islands of Lanai or Molokai. For that reason, they are a little different than the Realtor’s Association of Maui Statistics. It is also worth keeping in mind that these numbers look backwards in terms of market demand. The sales are based primarily on contracts written earlier in the spring from March through May.

June Home Sales

• Maui Realtors reported 83 homes sold in June of 2022. That is down 25% from the 110 homes sold in June of 2021.
• Sales numbers continue to decrease due to both decreased demand and limited inventory throughout the spring.
• While demand may be down, the limited inventory still created a competitive environment for prospective buyers. Of all the homes sold in June on Maui, 33.78% sold for over asking price and 54.22% sold for asking price or above.
• The lower price points of the market remained the most competitive. Of the homes sold for under $1,000,000, 61% sold for over asking price and 84% sold for asking price or above.
• Competition eased a little from May when 35.48% of all homes sold for over asking price and 61.29% sold for asking price or above. It is also the first month this year where the percentages are lower than the year before. The June 2021 numbers were 36.36% above asking and 54.55% asking price or above. For a little context, June 2019 “pre-covid” numbers were 3.45% sold over asking price and 27.59% sold for asking price or above.
• The Median Sales price for the homes that closed in June came in at $1,275,000. That is 14% higher than June 2021’s median of $1,117,500.
• The Average sales price of homes sold in June came in at $1,837,250. That compares to last June’s average of $1,734,816.
• Average sales price continues to be boosted by strong luxury market activity. That includes one sale over $10,000,000, two additional sales over $5,000,000 and a total of 16 homes sold over $2,000,000.
• The highest priced transaction in June closed for $16,013,250. The five bedroom/ 3 bath oceanfront home in Makena is one of the very limited number of homes on island with zoning that allows vacation rentals.

June Condo Sales

• Maui Realtors reported 147 condos sold in June. That is 38% lower than the 239 sold in June of 2021.
• As with the home market, decreased volume reflects both a decrease in demand and constrained inventory.
• Demand for the limited inventory remained sufficient throughout the spring to keep the market competitive among buyers. Of the June condo sales, 33.33% sold for above asking price and 60.54% sold for asking price or above.
• That is pretty comparable to May when 31.94% sold for over asking price an 66.67% sold for asking or above. Again for some pre-Covid context, in June 2019 only 12.2% of sales closed for over asking and 37.4% sold for asking price or above.
• The median price of the condos sold in June is $840,000. That is 29% higher than last June’s median of $650,000.
• The average price of the condos sold in June is $1,240,840. That 26.14% higher than the average of $983,638 in June of 2021.
• Luxury condo market activity is helping to push up that average sales price. Twenty-nine condos closed for more than $1,500,000 including 3 condos over $5,000,000 and 1 over $10,000,000.
• The highest priced condo to sell in June is located in the Makena Golf and Beach Club. The Molokini Residence floor plan with 5 bedrooms, 5.5 bathrooms and 4,430 square feet of living space closed for $11,256,000.

Looking at the Maui Land Market

The Maui land market is something of a forgotten stepchild of Market Musings. We typically focus on the far busier home and condo markets. In an attempt to make up for past oversight, I thought I would take a deeper dive into the land market for the year to date.

Year to Date Sales Volumes

	Sales	New Pending Sales	New Inventory	Cancelled Listings
January	19	25	28	4
February	27	16	15	7
March	20	21	23	5
April	20	17	34	10
May	16	9	20	11
June	7	8	10	8

Looking at the numbers in the chart above, the data that stands out the most is the decrease in sales in June. The decline in new pending sales in May and June suggest that we are likely to see lower sales number in the next month or two as well.

The chart above gives some context on how monthly land transactions in 2022 compare to the previous four years. If you are looking at the chart on a smaller device and you can’t read the key, the darker blue line is 2022, the orange 2021, the grey 2020, the yellow 2019 and the light blue 2018. Needless to say, 2022 sales volume is well below the first half of 2021. While 2022 sales started stronger than 2018-2020, sales appear to be trending below the pre-covid numbers in 2019 and 2018.

The other thing that the chart speaks to is the variability in the market. Year to year patterns in market activity are a little harder to distinguish. You can see some signs of seasonality with the first halves of the year typically busier than the second. Unsurprisingly, 2020 is a clear outlier with a much stronger second half of the year. Sales during the first half of 2019 are quiet for a “normal” year. Month to month fluctuations make the chart a little noisier.

A lot of the noise stems from the limited volume of land sales on a monthly basis. A few more or a few less buyers in any one month can make a big difference in the chart. While the island hasn’t had a lot of new land developments over the last five years, sales in these developments can provide a pretty health boost to the monthly numbers. Sales in places like Mahana Estates in Kapalua and Haiku Town Acres helped boost sales volume in late 2020 and spring of 2018 respectively. Otherwise, the market is largely driven by resales, small subdivisions and condominiumized lots.

Year to Date Pricing

The median price of the lots sold in the first half of the year came in at $845,000. That is 20.71% higher than the median during the first half of 2021. The average sales price for lots during the first half of the year came in at $1,355,768. That is a whopping 55.60% higher than January to June 2021 average of $871,266.

The high average price this year stems both from an increase in the proportion of sales over $1,000,000 and a decrease in the proportion of sales below $500,000. A whopping 39.82% of all sales in the first half of 2022 closed for $1,000,000 or higher. That compares to 29.21% of the sales during the first half of 2021. The percentage of lots sold for $500,000 or under came in at 20.35% in the first half of 2022. That compares to 25.84% selling for $500,000 or less in the first half of 2021.

Inventory

While inventory grew this spring, the rate of growth slowed in June, and new inventory is limited to date in July. The price distribution of the inventory is notable as well. Of the 79 active lots on the market as of July 14th, only 15.9% are listed for under $500,000 while 63.29% of the inventory is priced for $1,000,000 or higher. A whopping 21.52% of the inventory is priced for $3,000,000 or higher.

Maui Land Market Outlook

As mentioned above, the decrease in pending sales suggest slowing sales volume will continue in the near future. That shouldn’t be too big of a surprise with the overall volume of sales slowing on island. The question is whether the decrease is a blip or a trend?

I can’t speak with any sense of certainty, but it is worth noting that the land market faces headwinds going forward. Lower priced inventory is scarce. Higher interest rates and uncertainty over the direction of future interest rates is a barrier for those who want to build and refinance into a conventional home loan going forward. My understanding is that building material costs remain pretty high although there may be some relief in the future as commodity prices come down. That said, construction labor is likely to remain high on island. When talking to a contractor earlier this year, he indicated he had to keep raising the hourly wage of his employees. Otherwise, employees struggled to afford rentals under his older wage structures. It will likely require a decrease in local rents or a big construction slow down for labor costs to adjust.

The other question is to whether we will continue to see higher demand in the $1,000,000 plus inventory. Only 13-16% of all sales closed for over $1,000,000 during 2018-2019. Will we continue to see elevated demand for higher priced lots as the market normalizes?

The one thing likely to bolster the land market moving forward is continued scarcity. There aren’t a lot of land projects on the horizon. Resales, condominiumized lots and the occasional small subdivision are the likely source for inventory in the future. This is an island so areas with sufficient water, infrastructure and zoning for future development remain finite.

A Little Maui Beauty to Brighten Your Day

Located on the far south end of Maui, La Perouse Bay is the site of the last lava flow on Maui, dating back to 1790. As part of the 'Ahihi Kina'u Natural Area Reserve, the north area, Moanakala, remains an excellent choice for snorkeling when conditions are favorable. pic.twitter.com/cidBdjOF8I

— Maui Hawaii (@Maui) July 13, 2022

Contact The Maui Real Estate Team

Questions about this post? Interested in buying or selling property on Maui? Contact The Maui Real Estate Team. One of our agents would welcome the chance to sit down with you to answer questions and to learn more about your Maui Real Estate needs.

Holiday decorations are going back in closets, the smoke from New Year’s fireworks has cleared and new calendars have been put up for the New Year. That means we are due for another installment of our Unofficial Maui Real Estate Statistics. December proved to be a very busy month for real estate sales. October and November were the busiest months of the year for properties going under contract. We saw that reflected in the higher closes this month. Here are all of the details on this month’s stats followed by some thoughts and context for the December numbers.

There were 82 homes reported sold in December with a median sales price of $511,750. For frame of reference, the December 2011 numbers were 79 homes sold at a median sales price of $411,000. That calculates to approximately a 4% increase in volume and a 25% increase in median values between this December and last December.

I counted 140 condos sold in December with a median sales price of $377,950. Last December, Maui Realtors reported 89 sales with a median price of $304,000. That translates to a 57% bump in sales volume and a 24% increase in median prices.

I counted 26 total land sales for December in Maui County with a median sales price of $315,000. For December 2011, there were 9 sales with a median sales price of $375,000. That is a 288% increase in sales activity and an 16% decrease in median values when comparing Decembers.

Here are a few other interesting numbers that I came across while compiling the Maui sales volumes and medians.

• There were 20 bank owned sales last month on island. Most of those transactions were home sales. In December of 2011, there were 58 bank owned sales. That is a 66% drop in bank owned activity compared to last December.
• There were 22 short sale transactions that were completed successfully last month. There were 21 successful short sales reported in December of 2011.
• The highest sales price for a home was $23,000,000 for a beautiful oceanfront Estate on Keawakapu Beach in Wailea. This estate home features 5 bedrooms, six full baths, two half baths and over 6,000 square feet of living space. The home was situated on .63 acres of beachfront land. This is the second highest ever sales price for a home on Maui.
• There were a total of four luxury homes sold over $2,000,000 last month. In December of 2011, there were six homes sold over $2,000,000.
• There were five luxury condos sold over $1,500,000 last month. Last December, there was only one condo sold over $1,500,000.
• The land sales volume was the highest single month total in Maui County since June 2007.
• The condo sales volume was the second highest monthly total since March 2006

Land has been the ugly step child of the Maui Real Estate market for some time now. Sales have been tepid since 2007. While there have been a handful of months when we may have seen 20+ sales during this span, that month was usually followed by a month of ten sales or less. That changed with the last two months. After reporting 22 sales in November, there were 26 sales reported this month. With shrinking home inventories, we are seeing home buyers expand the scope of their search to include raw land. This is part of what is driving what appears to be a resurgence. It will be interesting to follow the land market over the coming months to see if this level of heightened sales activity is sustained.

The condo market also experienced sales volumes that we have seldom seen since the peak market days. The only month that performed better since 2006 was April 2010. That month of high performance deserved an asterisk as there were 40 new developer closes at Honua Kai based on pre-construction contracts that were originally drafted back in 2005. The December numbers weren’t bolstered by neither the same level of new developer sales or long term contracts. This is particularly surprising as the fall season is usually a relatively weak time for condo buying activity as there are fewer visitors. It will be interesting to see what happens in the coming months during our peak buyers season. Limited inventory and/or potential economic uncertainties are the two impediments that could keep us from sustaining high levels of buyer activity.

One other thing to note with the numbers above are the shifts in median pricing. After a few years of decreasing property values, we did start to see some modest price increases particularly at the lower and middle price ranges in the market. That being said, the 24% and 25% increases in median sales price that we saw respectively in the home and condo market are not due exclusively to increases in property values. Price increases have tended to be far more modest. The biggest driver in the shift in medians are changes in the inventory. While 2011 offered healthy inventories at the lower and middle parts of the market, the inventory contracted significantly during 2012. Fewer sales at the low end combined with more activity in the middle and higher price ranges means higher median sales prices.

With the winter buyer season officially here, what do the numbers above mean for buyers and sellers? For buyers, many segments of the Maui market are proving to be competitive. With limited inventory in many different parts of the island, the conditions are in place for multiple offers and above asking sales prices when well priced properties come on the market. Buyers who require financing to assist with their purchase should take the time and effort to be pre-approved for a mortgage prior to looking at properties. A pre-approval letter may be a requirement with some sellers and/or it could differentiate you from buyers who are only pre-qualified. While inventory is limited in many parts of the market, sellers can’t be complacent. Lots of properties are going under contract, but it appears that there are quite a few transactions that are falling through. If you have the capital, address deferred maintenance. If you can, consider having a home inspection done so that you can help identify and address potential deal breakers in advance. Prices are going up in many segments of the Maui market, but over-priced properties aren’t getting a lot of attention. Look closely at recent comparable sales when determining a go-to market price. Now more than ever, professional and responsive representation is important. Contact The Maui Real Estate Team today to discuss how we may be able to work with you to achieve your real estate goals on Maui.

Stay tuned to the Maui Real Estate Blog for more year end statistics and thoughts on the Maui real estate market. We hope to publish year end stats in the coming days. We will also be taking a look at how individual Maui communities perform in the next week. We already posted on the Spreckelsville market earlier this week. Keep your eyes peeled for year end updates on Paia, Haiku, Wailea, Kaanapali, Kapalua and more.

April is here and that means it is time to check in on how the Maui Real Estate market performed in March. Market activity is a frequent subject of conversation on our island. I have had more than a few interactions this month where people have asked, “Is it true the market is on fire?” Others have stated unequivocally that the Maui Real Estate market is booming again. Needless to say, there appears to be quite a bit of hype about Maui property sales. The question I have is whether the market meets the hype. That’s what I am hoping to answer with this month’s Unofficial Maui Real Estate statistics. Without further ado, here is what I found after sorting through the Maui MLS data for the month of March.

By my count, Maui Realtors have reported 80 home sales for March 2012 at a median price of $432,500. That compares to 89 homes sold in March 2011 at a median of $450,000. That is around a 10% dip in volume and a 4% dip in median prices when comparing this March to last March.

Maui Realtors have reported 128 condo sales last month at a median price of $370,000. By comparison, there were 124 condos sold at a median of $289,000. That represents a 3% increase in volume and a 28% increase in median prices for March 2012 over March 2011.

Land transactions for March 2012 stand at 21 sales at a median price of $455,000. Last March, there were 10 sales reported at a median of $517,500. That is a robust 110% increase in sales volume and a 12% decrease in median price.

The Maui Real Estate market continues to be impacted by the sale of Bank Owned Properties (REOs) and Short Sales. There were 66 bank owned or short sale closes on Maui last Month. Of the 80 homes that sold, 34 were REOs or Short Sales. That is 42.5% of the sales volume. Of the 128 condos that sold, 30 were REOs or Short Sales. That is 23% of the condo sales. Of the 21 land sales that closed, 2 were REOs. There were an additional four bankruptcy sales among the 21 closes.

Looking at the numbers above, the land sales volume is the big stand out for the month. The ugly step child of my unofficial stats posts is getting a day in the sun. Land sales started to slump from a volume stand point in the middle of 2007. Over that span of time, there had been only one month with 20+ sales. That was in early 2008 when there were 24 sales. The majority of those sales were a bulk purchase in a single development. What drove the market resurgence and is this the sign of increasing health in the land market? I would venture that value and opportunity are what drove an upswing in buyers. We are starting to see sellers adjust their pricing to levels where buyers are willing and able to purchase. The question remains whether March will start the beginning of an improved land market or if it is just an anomaly. There is still between 4 and 5 years worth of land inventory on the market so there is quite a ways to go before we see the dynamics in place to substantially raise values.

The condo market produced the second most eye catching number of the month with a 28% increase in median over March 2011. To be clear, this jump does not mean condo values have increased 28% over the last year. The biggest reason behind the change relates to where market activity is occurring. During March of 2011, much of the sales activity was lower priced bank owned properties. This year, there is less bank owned inventory and tighter entry level inventory. This has actually led to some modest price increases for some entry level condos. This shouldn’t come as too big a surprise as this segment of the market was the first to see prices decrease and was the hardest hit segment of the Maui market.

While lower priced activity has slowed due to lack of inventory, we have seen more activity in the middle ranges of the condo market. The increase in middle range sales is helping to push up medians. Buyers appear to be responding well to new development properties with 30 sales that were new developer offerings last month. Much of this new development activity is happening in the middle price ranges of our market. We are also seeing a little more activity in the middle ground of the second home and vacation rental market. This is part of a national upswing on vacation rental properties and second homes. Canadian buyers continue to have an impact as currency exchange remains favorable. While the middle ground has been stronger, the ultra luxury condo market is off a little over last year. There were 4 sales over $1,500,000 this March compared to 7 sales last March.

The dip in home sales numbers may just be a reflection of monthly variability. Home sales have been alternating between better than the year prior and a little slower than the year prior for the last few months. While the numbers are by no means poor, they do contradict the word on the street. The Maui market appears to be making some strides to a slow recovery, but it may not meet be experiencing the booming recovery that some are proclaiming. It will be interesting to see what the next few months bring us. We are rapidly approaching the end of peak buying season for Maui which should lead to a decrease in demand. On the other side, we continue to see tightening inventories in some segments of the market.

For those that are thinking of sticking their toe in the Maui market, my advice hasn’t changed. Buyers who want to enter the market will find that there are properties priced well below peak market values. The best opportunities can be competitive with multiple offers and above asking sales prices on some of the better values. With that in mind, buyer’s who need assistance with financing should take the time to get pre-approved with a bank up front. It is best to get approval with a bank with experience lending in Hawaii. Buyers should be prepared to strike quickly when they see properties that meet their needs at good prices. Sellers will find that there is still competition via lower priced REOs, short sales and motivated conventional sellers. The Maui Real Estate team works closely with their sellers to look at comparable sales and evaluate their niche of the market. Sellers who have the means should address deferred maintenance and other issues that could deter buyers. If you are interested in buying or selling property on Maui, Contact The Maui Real Estate Team for market knowledge, professionalism and responsive service. Aloha!