It’s that time again. This is the twenty-first edition of the Maui Market Musings. Our weekly, biweekly, monthly update on the Maui Real Estate market. The latest edition looks at active and pending inventory, price reductions and demand for new listings. There are plenty of words down below, so I will spare you from any more up here…

End of November Maui Home Inventory

	9/30/22		10/31/22		11/30/22
	Active	Pending	Active	Pending	Active	Pending
<$750,000	7	14	9	15	5 (-4)	14 (-1)
$750,000-$999,999	21	46	29	29	31 (+2)	25 (-4)
$1,000,000-$1,499,999	45	33	64	28	61 (-3)	28
$1,500,000-$1,999,999	44	17	41	13	28 (-13)	17 (+4)
$2,000,000-$2,999,999	33	12	35	10	34 (-1)	11 (+1)
$3,000,000-$4,999,999	35	11	32	7	32	7
$5,000,000-$9,999,999	27	6	26	5	23 (-3)	9 (+4)
$10,000,000-$19,999,999	11	0	9	0	14 (+5)	0
$20,000,000+	2	1	3	1	5 (+2)	1
Total	225	140	248	108	233 (-15)	112(+4)

	9/30/22		10/31/22		11/30/22
	Active	Pending	Active	Pending	Active	Pending
Haiku	24	7	28	9	29 (+1)	10 (+1)
Hana	9	1	10	0	10	0
Ka’anapali	10	3	7	2	9 (+2)	2
Kahului	7	26	16	16	16	13 (-3)
Kapalua	4	0	6	0	5 (+1)	3 (+3)
Kihei	35	16	40	11	31 (-9)	15 (+4)
Kula	22	11	20	11	22 (+2)	12 (+1)
Lahaina	21	10	22	13	15 (-7)	13
Makawao	13	11	13	9	11 (-2)	7 (-2)
Napili/Kahana/Hono…	9	7	11	6	9 (-2)	3 (-3)
Puklanai	6	7	8	3	10 (+2)	3
Sprecks/Paia	10	4	8	2	7 (-1)	3 (+1)
Wailea	10	8	11	4	16 (+5)	4
Wailuku	36	26	40	21	32 (-8)	19 (-2)

Notable Numbers from the End of November Maui Home Inventory

The information above is provided with the usual framework. The home inventory data by price point includes all of the island of Maui, but excludes the islands of Molokai and Lanai. The district information is limited to the districts and communities with the most activity.

• After an increase in inventory in October, Maui home inventories decreased again in November. Active listings dropped 6.1%.
• Looking at the the active inventory by price point shows a mix of trajectories. While most price ranges decreased, the continued increase between $750,000 and $999,999 is notable. This is a part of the market with more financed buyers. Those buyers are feeling the affordability impact of higher rates. The $10,000,000 plus price range is not known for financed buyers. That said, it also saw an increase.
• Pending sales actually increased between the end of October and the end of November. While the increase was a modest 3.7%, the increase in activity comes as somewhat of a surprise considering both rates and the more significant decrease between late September and late October.
• Broken down by price point, the picture is more mixed. Again, fewer properties went under contract in that $750,000-$999,999 price range. Pending sales increased in the $1,500,000 to $3,000,000 range. The biggest percentage increase in pending sales was in the $5,000,000 to $9,999,999 price range.
• At a community level, inventory trends were all over the place. Kihei, Lahaina and Wailuku all experienced notable decreases in inventory. Most other markets experienced modest changes with increases or decreases of a couple of homes. The Wailea active inventory increased the most month to month.
• There was also a lot of variability in the end of month change in pending sales by community. Pending sales increased in five communities, remained unchanged in five districts, and decreased in four. Kapalua and Kihei saw the biggest increase in pendings. Kahului and the Napili, Kahana, Honokowai area decreased the most.

End of November Maui Condo Inventory

	9/30/22		10/31/22		11/30/22
	Active	Pending	Active	Pending	Active	Pending
<$250,000	1	3	2	4	1 (-1)	4
$250,000-$499,999	11	16	19	12	19	14 (+2)
$500,000-$749,999	28	40	32	35	43 (+11)	33 (-2)
$750,000-$999,999	33	33	27	27	28 (+1)	29 (+2)
$1,000,000-$1,499,999	19	36	21	30	31 (+10)	24 (-6)
$1,500,000-$1,999,000	18	34	14	33	21 (+7)	28 (-5)
$2,000,000-$2,999,999	14	43	15	40	18 (+3)	39 (-1)
$3,000,000-$5,000,000	10	17	10	17	11 (+1)	17
$5,000,000-$9,999,999	7	0	11	1	12 (+1)	2 (+1)
$10,000,000+	4	0	3	1	3	0
Total	145	222	154	200	187 (+33)	190 (-10)

	9/30/22		10/31/22		11/30/22
	Active	Pending	Active	Pending	Active	Pending
Ka’anapali	17	14	18	9	25 (+7)	4 (-5)
Kahului	3	4	5	5	5	5
Kapalua	10	4	12	4	14 (+2)	2 (-2)
Kihei	48	61	43	60	53 (+10)	51 (-9)
Lahania	5	7	8	4	14 (+6)	8 (+4)
Ma’alaea	4	4	3	6	4 (+1)	8 (+2)
Napili/Kahana/Hono…	29	30	33	17	39 (+6)	19 (+2)
Wailea	19	86	19	85	23 (+4)	85
Wailuku	8	12	11	10	8 (-3)	8 (-2)

Notable Numbers from the End of November Maui Condo Inventory

Again, the tables above come with the usual framework for our end of month inventory. The table by price point includes all condos on Maui, but it does not include condos on the islands of Molokai or Lanai. The table with districts is limited to the communities with the most activity.

Pending sales at La’i Loa at Wailea Hills skew the data in Wailea and the $1,500,000-$5,000,000 price ranges. There are 75 pending sales in that development based on contracts penned in 2020 and the first quarter of 2021. Pending sales in La’i Loa won’t start to close until sometime in 2023. Paradise Ridge Estates in Kihei also skews the data albeit to a lesser extent. There are 18 pending sales with that development based on contracts penned between 2018 and the first quarter of 2022. Overall, 49.73% of the pending condo inventory is in La’i Loa or Paradise Ridge Estates.

• End of month condo inventory increased for the second straight month. Active inventory grew by 21.42%.
• Seven out of ten price ranges increased inventory between the end of October and the end of November. Two price ranges remained constant and only condos priced below $250,000 decreased in active inventory.
• The largest increases in active inventory occurred between $500,000-$749,999 and $1,000,000 to $1,999,999.
• Pending sales dipped 5% between the end of October and the end of November. Pendings in four price points decreased, increased in three and remained unchanged in three.
• The biggest decrease in pending sales occurred between $1,000,000 and $1,999,999.
• Active inventory increased in all but two communities. Only Wailuku saw a decrease while Kahului inventory remained unchanged. Kihei increased the most by the number of units and Lahaina increased the most by percentage.
• Pending sales increased the most in Lahaina. Kihei pending sales decreased the most.

Pending Sales vs. New Listings

With the shift in active and pending sales, it is worth taking a look at what’s driving inventory levels. How did November stack up against other years for new listings and new pending sales?

	11/2022	11/2021	11/2019	11/2018	11/2017
Homes	79	114	125	147	140
Condos	109	187	208	153	193

Looking at new inventory in November, you can see that we are well below last year. For homes, there were just over 30% fewer listings than last November. More notably, last month’s new inventory was anywhere between 39% and 46% less than what came to market in November of 2017-2019. The decrease in new condo inventory entering the market in November is even more pronounced. There were roughly 42% less condo listings last month compared to November 2021. New inventory came in anywhere between 53% and 56% lower than Novembers 2017 and 2019. The one outlier being November of 2018. Even that year had 40% more new listings than this year.

	11/2022	11/2021	11/2019	11/2018	11/2017
Homes	63	95	90	80	83
Condos	69	180	147	110	125

While inventory remains low, the number of properties going under contract decreased significantly from last November and the Pre-Covid Novembers Prior. New pending home sales this November are almost 34% lower than last November. They are down between 21 and 30% compared to the Novembers between 2017 and 2019. Again, the difference in the condo market is a little more dramatic. New Pending sales from November 22 are almost 62% less than November of 21. This November’s new pending sales are between 37% and 53% lower than November 2017-2019.

Looking at the numbers above, inventory clearly remains low. Pending sales are also down quite a bit. While some of the decrease in pending sales may be attributed to the limited inventory, decreased demand is the bigger driver for the decrease in activity. The weight of decreased affordability impacts a number of buyers.

How Quickly Are Things Going Under Contract?

Another metric we use to track the market is the speed at which properties are going under contract. Specifically, what percentage of new listings are going under contract in 10 days or less. We started tracking that number in mid February during the peak of last winter’s frenzy. At the time, 56% of all new listings went under contract in ten days or less. Prior to this post, the last time I checked this metric was for the period between October 11th and October 18th. At that time, 25.58% of properties listed during that span went under contract in ten days or less. Between November 21st and November 28th, 15.9% of all properties went into escrow within that ten day span.

Of the single family homes that came to market between November 21st and November 28th, 13.64% went under contract in ten days or less. For context, 36% of homes listed between November 21st and November 28th, 2021 went under contract in ten days or less. Of the homes listed between November 21 and November 28th, 2018, only 4.17% of the properties went under contract in ten days or less.

Of the condos listed between November 21st and November 28th, 18.18% sold in 10 days or less. Last year, 43.24% of condos listed in that period sold for 10 days or less. Pre-covid, 29.26% of condos listed between November 21st and November 28th sold in ten days or less.

Overall, this is the most tepid response new listings received since we started tracking this data point. While the slower market activity could be a function of the Thanksgiving Holiday, the 2021 and 2019 numbers both remained busy despite Thanksgiving.

Price Reductions

A lot of sellers don’t seem to be fretting the smaller numbers of buyers on the market. That is evident in the recent numbers on price reductions in the active inventory. On November 30th, 37.02% of all active home listings reduced their price one or more times. That is down from 39.92% on October 31st and 42.41% on September 29th. While the percentage of homes with price reductions started to tick down nationally in the last couple of weeks of November, the percentage of price reductions started declining in early September on Maui.

On November 30th, 23.53% of all active condo listings reduced their price at least once since being listed. That number was 29.41% on October 31st. It was 25% on September 29th. It’s interesting to see that price reductions are down considering the decreased condo sales activity over the last month. Low inventory and the start of peak winter home buying season at the end of the month is emboldening sellers.

Quick Thoughts on the State of the market.

Weird. My one word summary for the current Maui Real Estate market. Some parts of the market continue to push to all time record highs, other parts are stalled, while other segments of the market are seeing modest price declines. Supply (or lack thereof) and affordability (particularly when you take into account borrowing costs) push and pull the market in different trajectories.

We’ve already looked at the fluctuations in active listings by price point and community in this post. It might be worth zooming out and looking at those same numbers island wide since late Spring.

While active listings fluctuated over the last five months, the end of November supply for homes and condos is lower than it was at the end of June. Demand, reflected in pending listings, fell steadily downward over that time. While the data in this post shows that demand is far less than a normal market, we still have constrained supply. Demand fell enough to cool market conditions, but supply remains limited enough to prevent across the board decreases in value. Variability in market conditions on island ultimately comes down to the balance between supply and demand at the community level and at different price points. The price points that are decreasing in value appear to be those that have more financed buyers. The places that continue to see record highs have extremely limited inventory and a high percentage of cash buyers.

A Little Maui Beauty To Brighten Your Day

A beautiful sunrise taken from the beach in Wailea.

Witnessed a stunning sunrise from Wailea, Maui.✨ pic.twitter.com/4yRU7pndYl

— HAWAI'I Magazine (@HAWAIIMagazine) December 8, 2022

Contact The Maui Real Estate Team

Navigating the weird market conditions demands quality representation. Market strategies for buyers and sellers vary by price and location. Contact The Maui Real Estate Team to discuss market conditions specific to your budget and areas of interest. Our savvy and experienced agents look forward to being of assistance.

June is already upon us. That means we are officially in to festival season on Maui. The Kapalua Wine and Food Festival gets underway today and The Maui Film Festival at Wailea is set to begin next week. It also means it is time to take a gander at the Unofficial Maui Real Estate Statistics. These are the numbers that I found by sorting through our Realtor MLS database. The Realtors Association of Maui should be releasing their own stats in the next few days. In the interim, here is a sneak peak at the numbers followed by a few thoughts on the market.

By my calculations, there were 61 homes sold in May 2012 at a median price of $382,500. Last May, Maui Realtors reported 71 homes sold at a median price of $418,000. That is a 14% drop in volume and approximately a 9% drop in median price.

Thus far, Maui Realtors have reported 112 condos sold at a median price of $334,500 for May 2012. The May 2011 numbers were 114 condos sold at a median price of $349,500. That’s less than a 2 percent drop in sales volume and around a 4% drop in median price.

The Maui land market saw 17 sales in May 2012 at a median price of $330,000. By comparison, there were 15 sales reported at a median price of $275,000 in May of 2011. That is a 13% increase in volume and a 20% increase in median price when comparing this May to last May.

The Maui Real Estate market is still seeing significant influence from bank owned sales (REO) and short sales. There were a total of 49 bank owned and short sale transactions last month. Of the 61 homes sold, 22 were REOs and shorts. That is approximately 36% of the volume. Of the 112 condos sold, 24 were REOs or shorts. That is 21% of the transaction volume. Of the 17 land transactions, three were bank owned.

While there has been a lot of discussion of a hot market on the street, this is another month where sales volume under performed compared to last year. That is now four out of five months this year where home sales have been lower than last year. This is the second month this year where condo volume has been lower.

There are two things that I think are worth addressing from the paragraph above. The first is the perception that the market is on fire vs. the reality of the numbers. I also think it is worth exploring why the market is seeing lower transaction volumes compared to last year. Is it a reflection of decreased market demand or is market supply starting to have an impact?

Why do people think the Maui Real Estate market is performing better than the numbers would indicate? I am sure there may be a few Realtors who might be guilty of hyping the market as a means to inflate buyer interest. That comes with the territory when you are working with sales professionals. People want you to know that their product is hot to heighten consumer interest. In this case, the product of Maui Realtors is the real estate market. That being said, I don’t think all of those hyping the market are doing it as a ploy to increase their sales activity. I do think there are more Realtors keeping busy this year vs. last year. How are more Realtors keeping busy when there is lower sales volume? The answer to that may lie in the distribution of sales. The one area where we have seen a healthy drop in transaction volume is among bank owned properties. There were 39% fewer bank owned transactions this May vs. last May. Bank owned listings tend to be concentrated in the hands of a smaller pool of agents. While this pool of agents has seen fewer transactions. We have seen more activity outside the REO market. That activity has been spread across a much broader pool of agents.

The question of why activity is lower is a little tougher to answer. I am not sure that I am going to provide definitive answers or much more than anecdotal evidence. With that caveat, I surmise that the decreased inventory is playing an important part in the decrease in sales volume. Inventory is as low as it has been in the last few years. Some buyers have been frustrated by the limited number of properties on the market. Last year, there was an abundant and well priced REO inventory that was drawing buyers into the market and increasing transaction volume. Due to national and local foreclosure moratoria, we have seen fewer bank owned listings through the first half of this year. While there were high volumes of lower end condo deals last year, the limited bank owned inventory has meant a healthy reduction in transaction volume. There has been a 24% decrease in volume for condo sales under $200,000 between this year and last year. Many of the properties that are on the market in this segment are attracting bidding wars as buyers vie over the limited inventory. We have even seen some price increases among the low end condo complexes as demand exceeds the current supply.

The luxury condo market is an area where we have seen an even bigger reduction in sales volume. Sales volume is off 56% when you compare the number of condos sold over $1,500,000 through the first five months of this year with the first five months of 2011. This segment has not been impacted by reduced REO inventory. In fact, this segment has been mostly devoid of bank owned properties. We have seen a small reduction in new development inventory. The successful Hoolei complex is mostly sold out. Also, most of the premier units at Honua Kai have sold. The reduction of inventory as a result may be a factor in some of the reduction in volume. It certainly doesn’t account for all of the dip in sales activity. The odd thing is that we aren’t seeing a similar reduction in the luxury home market. Sales volume this year is within a few percentage points of last year. It will be interesting to see if we see any upticks in the luxury condo market as the year progresses evening out some of the discrepancy we have seen thus far.

What does this all mean for buyers and sellers? The song remains the same from the Maui Real Estate Team. Buyers will continue to see opportunities in this market. That being said, most of the good opportunities are attracting multiple buyers. Buyers should be prepared to act quickly when good deals become available. Buyers that require financing should make sure to be pre-approved prior to looking. Having a pre-approval letter at your disposal will bolster the strength of your offer. Most Sellers will find that market conditions remain challenging. While bank owned inventory is down some, they continue to have a negative impact on home values. Sellers will need to closely monitor recent comparable sales when going to market. Overpriced homes aren’t getting a lot of love from home buyers. If a seller has the capital, efforts should be made to prepare your property for sale. Having a home inspection prior to listing is an excellent way to identify and address potential maintenance issues that could cost you money, or worse, become deal breakers while your home is under contract. In this market, you need intelligent, experienced and ethical representation when you are buying or selling. Contact The Maui Real Estate Team with questions on the statistics or for assistance buying or selling Maui properties.