Tag: Maui Real Estate Sales Volumes
Maui Real Estate Blog
Maui Market Musings Volume XXIV
This is our 24th installment of the Maui Market Musings. This latest edition looks at market activity and inventory levels as of the end of February. These posts tend to be long so I will keep the intro on the short side. Without further ado, here are the numbers.
February Market Activity
The tables below show new inventory, new pending listings and closed transactions during February with data from the previous five years provided for additional context.
Like most places, inventory remains constrained on Maui. February did not provide much in the way of inventory relief. New home inventory came in 44% lower than February of 2022. It is between 41% and 52% lower than the three Februaries prior to the start of Covid. New condo inventory is 54% lower than February of 2022. It is anywhere between 48% and 57% lower than any of the three months of February between 2018 and 2020.
While inventory remains low, transaction volume does too. Pending home sales came in 39% lower than last year. The activity in the home market for this February is anywhere between 31% and 37% below the three Februaries between 2018-2020. For the condo market, the drop from last year is more dramatic with 54% fewer pending sales. February 2023 pending condo sales are anywhere between 38% and 51% below the three Februaries prior to Covid.
From time to time, I will hear someone rationalize that low buyer activity is just due to lower inventory. You might be able to make that argument with some segments of the vacation rental condo market. That said, affordability is clearly a significant factor in driving the lower volumes. Prices just haven’t seen significant adjustments since the spike in rates. That’s not to say that there aren’t buyers in this market, it is just a smaller pool.
This February’s closed transactions reflect the low pending sales between November and January. For homes, the 38 homes sold is 54% lower than last February. That is between 49% and 60% lower than the three last pre-Covid Februaries. On the condo side, the 65 closed sales is 59% below last year and anywhere between 44% and 50% below any February between 2018 and 2020.
End of February Maui Home Inventory
The charts below show active and pending home sales by price point and community on the last day of the month over the last three months.
|$750,000-$999,999||25||28||21||25||30 (+9)||28 (+3)|
|$1,000,000-$1,499,999||78||20||71||30||59 (-12)||40 (+10)|
|$1,500,000-$1,999,999||36||11||33||9||32 (-1)||7 (-2)|
|$2,000,000-$2,999,999||37||12||42||7||37 (-5)||13 (+3)|
|$3,000,000-$4,999,999||31||9||32||10||35 (+3)||9 (-1)|
|$5,000,000-$9,999,999||27||8||27||6||26 (-1)||9 (+3)|
|$10,000,000-$19,999,999||14||0||16||0||13 (-3)||1 (+1)|
|Total||258||100||257||99||247 (-10)||115 (+16)|
|Haiku||29||7||26||7||27 (+1)||5 (-2)|
|Kahului||16||13||13||11||18 (+5)||8 (-3)|
|Kapalua||5||3||7||1||6 (-1)||2 (+1)|
|Kihei||39||7||32||17||29 (-3)||24 (+7)|
|Kula||21||10||21||11||14 (-7)||14 (+3)|
|Lahaina||18||11||19||9||16 (-3)||8 (-1)|
|Makawao||35||4||31||6||27 (-4)||8 (+2)|
|Napili/Kahana/Hono||13||3||13||1||12 (-1)||2 (+1)|
|Pukalani||7||3||11||4||7 (-4)||6 (+2)|
|Sprecks/Paia||9||1||8||1||10 (+2)||0 (-1)|
|Wailea||13||6||16||3||14 (-2)||7 (+4)|
|Wailuku||25||25||30||17||35 (+5)||21 (+4)|
Three Notable Things About the End of February Maui Home Inventory
- Active home inventory dropped 4% between January 31st and February 28th. Pending sales increased 16%. The new listings in February and the new pending sales in February further up the page provide some context. The decrease in inventory is largely due to new listings coming in way below normal. An increase in pending sales is pretty normal for this time of year, but the rate of increase is well below normal.
- Market activity was something of a mixed bag by price point. The $1,000,000-$1,499,999 saw the biggest increase in pending sales. That is a little bit of a surprise with interest rates increasing again.
- Looking at the inventory at a community level, all of Upcountry saw an increase in pending listings and a decrease in active listings. Kula inventory is particularly low. Kihei also saw a notable increase in pending sales. The resorts were relatively quiet. While Wailea pending sales increased by a few, buyer activity is still below normal for this time of year.
End of February Maui Condo Inventory
The charts below provide end of the month active and pending condo inventory by price point and district. It is worth noting that the Wailea pending sales continue to receive a boost from 75 new developer units under contract in La’i Loa at Wailea Hills. These properties went pending between 2020 and the the first quarter of 2021. Priced from just under $1,500,000 all the way up to over $4,000,000, these long term contracts are also skewing the pending sales upwards in this price range. Paradise Ridge Estates is another new development in Kihei with 18 pending sales based on contracts signed between 2018 and the first quarter of 2022. Eight units in Paradise Ridge Estates closed on March 1st so the impact will be diminished in next month’s numbers.
|$250,000-$499,999||12||16||14||11||16 (+2)||14 (+3)|
|$500,000-$749,999||38||25||49||31||41 (-8)||42 (+11)|
|$750,000-$999,999||42||27||39||42||29 (-10)||45 (+3)|
|$1,000,000-$1,499,999||32||21||29||32||33 (+4)||30 (-2)|
|$2,000,000-$2,999,999||18||36||17||40||18 (+1)||41 (+1)|
|Ka’anapali||22||9||24||12||27 (+3)||6 (-6)|
|Kapalua||12||3||13||6||14 (+1)||5 (-1)|
|Kihei||61||45||65||72||52 (-13)||79 (+7)|
|Napili/Kahana/Honokowai||50||16||50||14||52 (+2)||21 (+7)|
|Wailea||27||79||26||81||28 (+2)||85 (+4)|
Three Notable Things from the End of February Condo Inventory
- Active condo listings dipped 2% and pending condo listings increased almost 7% between January 31st and February 28th. Again, the story may be better explained by the numbers for new inventory and new pending sales in February further up this post. It’s expected to see pending sales increase in February. The extent to which they are increasing is well below normal.
- Looking at active and pending sales by price point, the biggest decrease in active listings and the biggest increase in pending listings occurred under $1,000,000. The higher price points were quiet with an increase in listings and only one additional pending over $1,500,000..
- At a district level, Kihei and Napili/Kahana and Honokowai saw the biggest increase in pending sales. This is not too big of a surprise considering the season. This is peak buying season for vacation rental condos. The resorts are surprisingly quiet with Ka’anapali and Kapalua seeing a drop in pending sales. Wailea’s pendings increased modestly after a quiet January.
Some Quick Thoughts
Weird conditions persist. There is still something of a balance in this market that is sustaining prices. As established above, demand is lower, but inventory remains low too. That’s what differentiates Maui from markets on the mainland seeing more significant price decreases. That said, Maui is not monolithic. There are parts of the market where properties are going under contract quickly and others where the days on market are steadily ticking upward.
Buyers searching for vacation rental condos in beach towns like Kihei can expect properties to go under contract relatively quickly. It may not be 2021 or early 2022, but when a 2 bedroom vacation rental in a good complex hits the market, it is safe to say it won’t last more than a few days. It is hard to assess the depth of that buyer pool, but inventory is so incredibly scarce that prices continue to go up in this area due largely to scarcity.
On the other end of the spectrum, the luxury condo market is quiet. Between January 1 and the end of February, only 5 condos went under contract for more than $2,500,000. This is well below 29 during the same period of 2022. It’s worth noting, activity is below pre-Covid levels but the drop off isn’t quite as steep. Slower activity in the luxury market is a national trend. The reasons extend beyond rates.
The home market is also pretty variable. The one real difference with the condo market is that there are no segments of the market that truly feel frothy. Some new listings are going under contract relatively quickly, but it a far cry from the madness of last February.
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Maui Real Estate Blog
Maui Market Musings Volume XXII
We are starting off 2023 with volume 22 of our market musings. Early January means that we are in the beginning of what is traditionally our peak real estate season on Maui. This post helps to give a sense of recent market demand and current inventory levels as we enter into what should be the busiest 3-4 months of the year for real estate transactions on island.
December Market Activity
We start things off by taking a look back at December. How many new listings came to market, went under contract and sold? Activity from the five previous Decembers are given for additional context.
New inventory during the month of December was below normal. The number of new listings is anywhere between 25% and 36% lower than what we would anticipate in the pre-Covid Decembers of 2017-2019. This December’s home inventory benefited from an influx of new listings in the Hoku’ula subdivision in Upcountry Maui towards the end of the month. Were it not for those 19 listings, new inventory would be even further below what’s considered normal.
New condo inventory was significantly lower than usual in December. It is anywhere between 47% and 56% below the December new inventory of 2017-2019. Whether it’s the golden handcuffs of low interest rates, the lack of potential replacement properties or just loving their place on Maui, people are holding on to their condos for now.
While new inventory was low, buyer demand also remained low in December. The number of new pending home sales came in at anywhere between 32-33% below what we saw in the three years prior to the start of Covid.
New Pending condo sales came in between 45% and 52% below the activity seen over the years prior to Covid. The slow down in new condo inventory and sales activity is particularly pronounced over the last few months.
The closed transactions in December give us some insight to market demand a little earlier in the fall. Most of these closes came out of contracts agreed to in October and November. Home sales were between 28 and 33% lower than a typical Pre-Covid December. Condo sales in December are between 45 and 53% lower than the three Decembers prior to the start of Covid. Of course, this December’s home and condo sales are way below 2020 and 2021 sales volume.
End of December Maui Inventory
Inventory, or lack thereof, continues to be a significant factor in our market. While new inventory remains low, quieter buyer activity over the last 2-3 months allowed for modest growth in the overall number of properties for sale. That said, we still have a lot less inventory that what was more typical pre-Covid. The charts below provide detail on active and pending listings by price point and community.
End of December Home Inventory
|<$750,000||9||15||5||14||6 (+1)||10 (-4)|
|$750,000-$999,999||29||29||31||25||25 (-6)||28 (+3)|
|$1,000,000-$1,499,999||64||28||61||28||78 (+17)||20 (-8)|
|$1,500,000-$1,999,999||41||13||28||17||36 (+8)||11 (-6)|
|$2,000,000-$2,999,999||35||10||34||11||37 (+3)||12 (-1)|
|$3,000,000-$4,999,999||32||7||32||7||31 (-1)||9 (+2)|
|$5,000,000-$9,999,999||26||5||23||9||27 (+4)||8 (-1)|
|$20,000,000+||3||1||5||1||4 (-1)||2 (+1)|
|Totals||248||108||233||112||258 (+25)||100 (-12)|
|Kihei||40||11||31||15||39 (+8)||7 (-8)|
|Kula||20||11||22||12||21 (-1)||10 (-2)|
|Lahaina||22||13||15||13||18 (+3)||11 (-2)|
|Makawao||13||9||11||7||35 (+24)||4 (-3)|
|Napili/Kahana/Honokowai||11||6||9||3||13 (+2)||3 (-3)|
|Sprecks/Paia||8||2||7||3||9 (+2)||1 (-2)|
|Wailea||11||4||16||4||13 (-3)||6 (+2)|
|Wailuku||40||21||32||19||25 (-7)||25 (+6)|
Notable Numbers from the End of December 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.
- For the second month in a row, the inventory of active home listings increased on Maui. Active inventory increased 10.7%. A good portion of the bump in inventory can be traced to the 19 new developer listings in the Hoku’ula subdivision.
- Changes in active inventory varied by price point. Five price points increased in inventory, three decreased and one was unchanged. The price range with the biggest increase in inventory was between $1,000,000 and $2,000,000. Again, that was largely due to Hoku’ula. It was notable that the $750,000-$999,999 price range saw the biggest drop in active listings from the month prior. Inventory in that segment increased steadily in the the previous three months. With a higher percentage of financed buyers in this price point, the spike in interest rates earlier in the fall curtailed buyer demand.
- Overall Pending home inventory decreased from the end of November. The number of pending homes dipped 10.71% between November 30th and December 31st.
- By price point, pending sales increased in three price ranges, decreased in five and remained unchanged in three price points. The biggest increase in pending sales occurred in the $750,000-$999,999 range. Perhaps recent decreases in interest rates provided some relief to buyers in that price range. The biggest decrease in pending sales occurred in the $1,000,000-$2,000,000 price range.
- At a community level, inventory trends continued to vary. Inventory increased in 5 communities, decreased in 4 and remained unchanged in 5 districts. The biggest increase by far was in Makawao (the Hoku’ula effect) followed by Kihei. Wailuku inventory decreased the most.
- Pending sales decreased in most communities. Kihei pending sales decreased the most month to month. Wailuku experienced the biggest increase in pending sales.
End of December Maui Condo Inventory
|<$250,000||2||4||1||4||2 (+1)||2 (-2)|
|$250,000-$499,999||19||12||19||14||12 (-7)||16 (+2)|
|$500,000-$749,999||32||35||43||33||38 (-5)||25 (-8)|
|$750,000-$999,999||27||27||28||29||42 (+14)||27 (-2)|
|$1,000,000-$1,499,999||21||30||31||24||32 (+1)||21 (-1)|
|$1,500,000-$1,999,999||14||33||21||28||26 (+5)||29 (+1)|
|$3,000,000-$4,999,999||10||17||11||17||10 (-1)||18 (+1)|
|$5,000,000-$9,999,999||11||1||12||2||14 (+2)||0 (-2)|
|Total||154||200||187||190||198 (+11)||174 (-16)|
|Ka’anapali||18||9||25||4||22 (-3)||9 (+5)|
|Kahului||5||5||5||5||4 (-1)||3 (-2)|
|Kapalua||12||4||14||2||12 (-2)||3 (+1)|
|Kihei||43||60||53||61||61 (+8)||45 (-16)|
|Lahaina||8||4||14||8||11 (-3)||12 (+4)|
|Ma’alaea||3||6||4||8||5 (+1)||5 (-3)|
|Napili/Kahana/Honokowai||33||17||39||19||50 (+11)||16 (-3)|
|Wailea/Makena||19||85||23||85||27 (+4)||79 (-6)|
|Wailuku||11||10||8||8||4 (-4)||4 (-4)|
Notable Numbers from the End of December 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 the fall of 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, 53.44% of the current pending condo inventory is in La’i Loa or Paradise Ridge Estates.
- For the third straight month, end of month inventory of active condo listings grew. It increased 5.88% from the end of November.
- Looking at the inventory by price point, there continues to be a lot of variability. While most price points saw modest changes, the inventory of $250,000-$749,999 condos decreased by a decent margin. The inventory of condos priced between $750,000 and $999,999 increased substantially. There was also a bump in inventory between $1,500,000 and $1,999,999.
- End of the month pending condo sales dropped for the third straight time. Pending sales dropped 8.43%.
- Most price ranges saw a decrease in pending sales by the end of the month. The $500,000-$749,999 price range saw the biggest drop in activity followed by the $2,000,000-$2,999,999 price point.
- At a community level, most locations saw modest changes in inventory. There were exceptions. Kihei and the Napili, Kahana and Honokowai MLS district saw pretty big increases. Ka’anapali and Wailuku both saw notable decreases in inventory.
- Most communities saw a decrease in pending sales by the end of December. Kihei saw the biggest decrease in pending sales. While Wailea’s decrease was smaller, it is notable that the vast majority of the remaining pending sales are longer term contracts at La’i Loa. Only 4 of the 79 pendings in Wailea at the end of the month were condos outside of that development.
- The West Maui communities of Ka’anapali and Lahaina were both notable for their increase in pending condo sales.
How Quickly Are Things Going Under Contract
We started tracking the percentage of properties going under contract in ten days or less all the way back in February. At the time, the market was in a frenzy and 56% of all new listings went under contract within that first ten days of coming to market. We’ve seen things slow considerably since that time. I took a look at properties that came to market between December 13th and December 20th. Of the 35 listings that came to market, 25.71% went under contract within the first ten days. That is actually up from when we last checked in November when only 15.9% of all properties went under contract.
Looking specifically at homes, 20% of the homes listed between December 13 and 20th went under contract within 10 days or less. Last year during the same period, 15.38% of new home listings went under contract in 10 days or less. In 2019, 20% of homes went under contract in 10 days or less.
Of the condos that came to market between December 13th and 20th, 30% went under contract within 10 days. For perspective, 41.51% of all condos listed between December 13-20th, 2021 went under contract in ten days or less. In 2019, 15.22% of condos listed during that same time period went under contract in 10 days or less.
My biggest takeaway from these numbers is that we are well off the frenzy of 2021 and the first quarter of 2022. Response to new listings is closer to what we had pre-Covid. Back then, quality properties priced well tended to go quickly. That continues to be the case today. Unless there is a lot of push back from the readership or we see a clear shift in market conditions, I am going to retire this metric from future musings posts.
While market activity remained slow in December, it doesn’t seem to be fazing too many sellers. As of December 31st, only 33.33% of all active listings had one or more price reduction. That is down from 37.02% on November 30th and 39.92 on October 31st. It was all the way up at 42.21% in late September.
The condo market is seeing even fewer price reductions. As of New Year’s eve, only 25.25% of all active condo listings were reduced in price one or more times. That is down slightly from 25.53% on November 30th and 29.41% on October 31st.
I surmise that low inventory and seller hopes for a seasonal increase in buyers has led more seller to stick their guns on pricing.
Quick Thoughts On the Market as We Enter Maui Peak Buying Season
Needless to say, the trajectory of the market isn’t entirely clear at the start of buyer’s season. Inventory is up from last winter, but still well below normal. Demand is lower, but it should potentially increase just due to seasonality. Affordability is down significantly from this time last year, but there is still a lot of cash in our market and rates are better than they were earlier in the fall. Add it all together and it makes prognostication a challenge. About the only thing I feel comfortable predicting is continued variability in conditions by price range and by location around the island. We will continue to provide market observations as buyer season progresses on the blog.
A Little Maui Beauty
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With the uncertainty in the Maui Real Estate market, quality representation is more important now then ever. Contact the Maui Real Estate Team. Our experienced agents welcome the chance to discuss your real estate needs. We look forward to being of assistance.
Maui Real Estate Blog
Maui Market Musings Volume XX
Well, we made it to our twentieth Market Musings. This post took me a while to put together. I want to say it’s because it is chock full of tremendous insight. The truth is my last 9-10 days consisted primarily of battling Covid. My symptoms made writing this post a protracted slog. Give me some grace if there are typos and/or a few not so coherent thoughts interspersed throughout the text.
In our last post, I talked about the relative resilience of the Maui market under higher rates. Since that time, rates rose even more. The additional bump in rates or perhaps just a longer duration of time with higher rates is weighing on the Maui market. The single family home market in particular is feeling the burden of higher rates and decreased affordability. Musings 20 takes a look at some of the current market indicators including active and pending inventory, price reductions and how quickly new listings are going under contract.
End of October Maui Single Family Home Inventory
|<$750,000||11||11||7||14||9 (+1)||15 (+1)|
|$750,000-$999,999||31||44||21||46||29 (+8)||29 (-15)|
|$1,000,000-$1,499,999||58||28||45||33||64 (+19)||28 (-5)|
|$1,500,000-$1,999,999||46||13||44||17||41 (-3)||13 (-4)|
|$2,000,000-$2,999,999||36||12||33||12||35 (+2)||10 (-2)|
|$3,000,000-$4,999,999||32||11||35||11||32 (-3)||7 (-4)|
|$5,000,000-$9,999,999||26||5||27||6||26 (-1)||5 (-1)|
|Totals||256||124||225||140||248 (+23)||108 (-32)|
|Hana||8||2||9||1||10 (+1)||0 (-1)|
|Ka’anapali||10||4||10||3||7 (-3)||2 (-1)|
|Kahului||11||25||7||26||16 (+9)||16 (-10)|
|Kihei||44||16||35||16||40 (+5)||11 (-5)|
|Lahaina||23||7||21||10||22 (+1)||13 (+3)|
|Napili/Kahana/Hono…||14||4||9||7||11 (+2)||6 (-1)|
|Pukalani||8||5||6||7||8 (+2)||3 (-4)|
|Spreckelsville/Paia||15||3||10||4||8 (-2)||2 (-2)|
|Wailea/Makena||16||4||10||8||11 (+1)||4 (-4)|
|Wailuku||41||22||36||26||40 (+4)||21 (-5)|
End of October Home Inventory Review
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 community with the most activity.
- After a pretty healthy drop in Inventory in September, active home listings increased by 10.22% by the end of October.
- The bulk of the inventory increased occurred between $750,00 and $1,500,000 with an increase of 27 listings in that range.
- It appears that this increase in inventory stems more from slower activity than an influx of new listings. That is reflected in the pending sales data with 20 fewer pending home sales between $750,000 and $1,500,000.
- This make sense as this is an area of the market where a higher percentage of buyers are using financing. Looking at all of the sales between August 1 and October 30th, 18.93% of the buyers in this price range paid cash. In all other price ranges, 41.77% of buyers used cash. Plain and simple, the increase in mortgage rates is hitting this segment of the market harder.
- Overall, the number of pending home sales decreased 22.86% between the end of September and the end of October. That is a substantial decrease, but worth noting that pending sales typically decline in the fall.
- Looking at the market on a community level, all but three districts increased inventory. The exceptions being Kula, Spreckelsville/Paia and Ka’anapali. Ka’anapali’s decrease stemmed in part due to cancelled listings rather than increased sales.
- Kahului experienced the biggest increase in active listings and the biggest decrease in pending sales. With the vast majority of the inventory in this community priced between $750,000 and $1,300,000, this is a market where the increased rates appear to causing a bigger shift in conditions.
End of October Condo Inventory
|<$250,000||1||6||1||3||2 (+1)||4 (+1)|
|$250,000-$499,999||14||17||11||16||19 (+8)||12 (-4)|
|$500,000-$749,999||34||43||28||40||32 (+4)||35 (-5)|
|$750,000-$999,999||33||43||33||33||27 (-6)||27 (-6)|
|$1,000,000-$1,499,999||29||31||19||36||21 (+2)||30 (-6)|
|$1,500,000-$1,999,999||24||35||18||34||14 (-4)||33 (-1)|
|$2,000,000-$2,999,999||22||38||14||43||15 (+1)||40 (-3)|
|$5,000,000-$9,999,999||8||1||7||0||11 (+4)||1 (+1)|
|$10,000,000+||4||0||4||0||3 (-1)||1 (+1)|
|Total||181||233||145||222||154 (+9)||200 (-22)|
|Ka’anapali||25||16||17||14||18 (+1)||9 (-5)|
|Kahului||3||7||3||4||5 (+2)||5 (+1)|
|Kihei||50||63||48||61||43 (-5)||60 (-1)|
|Lahaina||9||10||5||7||8 (+3)||4 (-3)|
|Ma’alaea||3||6||4||4||3 (-1)||6 (+2)|
|Napili/Kahana/Hono…||45||25||29||30||33 (+4)||17 (-13)|
|Wailuku||9||14||8||12||11 (+3)||10 (-2)|
End of October Condo Inventory Review
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, 46.5% of the pending Condo inventory is in La’i Loa or Paradise Ridge Estates.
- After three straight months of decreased inventory, condo inventory increased by a modest 6.2%
- The largest increase in inventory occurred in the $250,000 to $499,999 price range. While this price range has a lower percentage of cash buyers than the overall condo market, the difference isn’t all that substantial.
- Active inventory increased in 6 out of 10 price ranges, decreased in three and stayed the same in one.
- Pending sales decreased 9.91% this month. As with home sales, it isn’t too uncommon to see pending sales decrease this time of year.
- The decrease in pending condo sales by price point was fairly consistent through most ranges, with the exceptions being the very lowest price range and the very highest price points in the market.
- At the community level, modest increases in inventory were common across the board. The two districts that actually saw a decrease in inventory at the community level were Ma’alaea and Kihei. Both are markets with a lot of vacation rentals. This is a market segment that is still seeing decent demand.
- Napili, Kahana and Honokowai experienced the biggest drop in pending sales. This is another big vacation rental condo market. Is the difference in activity levels a case of no clear narrative or just variability? This is something to watch with next month’s numbers.
How Quickly Are Properties Going Under Contract
One other metric we use on the blog to track market demand is how quickly properties are going under contract. Specifically, what percentage of new listings are going under contract in ten days or less. The very first time we started documenting this metric was back in February. At that point, 56% of all new listings went under contract within 10 days or less. Between September 12th and 19th, that number shrank to 34%. Between October 11th-18th, the number of properties that went under contract within 10 days or less fell further to 25.58%.
When you break it down by homes and condos, you can see that condos continue to show some measure of resilience. For condos listed between October 11th and 18th, 40% went under contract with buyers in ten days or less. That’s actually up from mid September when the number was 36.66%. For additional context, 66.67% of condos went under contract in 10 days or less between October 11th and 18th, 2021. Going back to 2019, 26% of all condos listed between October 11th and 18th went under contract in 10 days or less.
The numbers for the home market point to a more pronounced cooling. Only 13.04% of all homes listed between October 11th and 18th went under contract in 10 days or less. In mid-September, that number was 32.14%. For additional context, 54.17% of homes listed between October 11th and October 18th, 2021 went under contract in tend days or less. Going back to 2019, 9.09% of all homes listed between October 11th and October 18th, went under contract in ten days or less.
One market indicator that surprised this month is the number of active listings with price reductions. Nationally, price reductions continue to rise as the real estate market slows under the weight of higher interest rates. Based on the numbers above, one might expect to see more price reductions, particularly with the home market. With fewer properties going under contract quickly and fewer properties going under contract in general, shouldn’t sellers be adjusting to the market?
As of the the 31st, 90 of 248 active home listings or 39.92% reduced their price one or more times. On September 29th, 42.41% of homes went under contract in 10 days or less. On September 2nd, 42.97% of all active listings had one or more price reduction.
On the condo front, 45 of 153 or 29.41% of active condo listings on October 31, 2022 reduced their price one or more times. That’s up from 25% on September 29th. On September 2nd, 27.84% of all active condo listings had price reductions.
Some General Thoughts on the Numbers Above and The State of The Market
It’s been an interesting last six months in the Maui Real Estate market. The first quarter of the year was largely a continuation of 2021. Strong demand combined with limited inventory to fuel strong price growth. Demand slowly started to taper in the second quarter. That said, inventory remained low. While the frenzy of the first quarter subsided, there was a balance between limited supply and just enough demand to make for a competitive market for buyers. While we were well below the frenzy of earlier in the year, homes and condos in particular sold faster and at a higher percentage of asking price than they would in a normal market.
This trend of a balanced ratio between buyers and sellers continued through the summer. Inventory actually contracted through most of the summer, but we lost FOMO (fear of missing out) buyers from the market. The lack of FOMO buyers had an impact. We started to see some downward pressure on values in limited parts of the market. With a discerning buyer pool, flawed properties that would have sold easily in the first quarter weren’t getting any love from buyers.
In my last musings, I showed stats that pointed to the relative resilience of this market despite rates well over 6%. The stats above point to a further shift downward in the market . Or at least two out of three did. The third is a reflection of Maui as a real estate market as a whole.
The increase in inventory and the decrease in pendings show a market where the balance in supply and demand is starting to shift. This is less due to an influx of new inventory as much as it is to decreased demand. When you look at the number of homes going under contract within 10 days or less, you can see where the push above 7% rates is starting to decrease the number of buyers. I am sure the more negative national real estate news is also having an impact on the buying decisions of some. Fomo has been replaced by wait and see.
The decrease in price reductions is the one anomaly in this market. As the market cools, you would expect sellers to adjust. Prior to Covid, Maui’s market dynamics were different than the typical mainland market. Sellers took time to adjust prices and days on market could really pile up before a listing was considered stale. It’s also worth remembering that this shift is pretty recent. We may need to see these conditions persist for a longer before more sellers begin to adjust prices.
The one other thing to note is that while we saw a shift in market conditions in these most recent stats, conditions remain variable. That’s pretty clear when we look at the difference between homes and condos. As of mid-October, new condo listings still went under contract much faster than they did pre-Covid. Condo inventory remains tight compared to demand and the volume of cash buyers blunts the impact of higher rates.There is variability in the home market too. The luxury market, which again includes a higher percentage of cash buyers, appears to be moving relatively well.
Looking forward, it will be interesting to see where the market goes from here. Since it’s taken me longer to write this blog post, I have the advantage of watching market conditions over the first ten days of November. While I haven’t crunched the numbers in any detail, pending sales stabilized to start the month. Yesterday’s inflation print out caused a shift in the bond market and mortgage rates to drop a half a point.Will that persist or will higher rates return? Needless to say, it’s too early tell. If anything, this points to continued weird market dynamics with a lot of variability in conditions.
A Little Maui Beauty to Brighten Your Day
It may not be Monday but…
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Variable market conditions and general market weirdness demand quality representation. Contact the Maui Real Estate Team to talk to one of our experienced agents if you are thinking of buying or selling Maui Real Estate. One of our healthy agents will be happy to learn more about your real estate needs. We look forward to being of assistance.
Maui Real Estate Blog
Maui Market Musings Volume XI
Once again it’s time for another edition of Maui Market Musings. Your almost weekly source for the latest and greatest Maui Real Estate Statistics and market observations. The musings are also rumored to cure insomnia for those that have no interest in real estate. Although, we need to go through clinical trials before we can make that claim officially. This edition of the musings looks at notable numbers from the May stats and a few statistics that point towards current market conditions.
Notable Numbers from the May Maui Statistics
I looked through the latest statistics from the Realtor’s Association of Maui (RAM) and did a little number crunching of my own. The numbers below represent some of the more interesting items from the May Sales activity on Maui. They are just for the island of Maui. RAM’s stats include sales on Lanai and Molokai.
May Home Sales
- Maui Realtors reported 93 home sales on Maui. That is down 20% from last year’s 116 sales.
- While increased mortgage rates in March and April likely impacted sales, low inventory remains a factor too. The end of the month inventory of active home listings between February and April averaged about 15% below the same period of 2021.
- While we may be seeing lower sales numbers, competition for the available inventory remained robust. Of the homes that sold, 35.48% sold for over asking price and 61.29% sold for asking price or above.
- That is quite a bit stronger than last May when 25.86% sold for above asking price and 50.86% sold for asking price or higher. It is also higher than April when 32.35% sold for over asking price and 55.88% sold for asking price or above.
- The median price of homes sold in May is $1,225,000. That is 20% higher than the May 2021 median home sale price.
- The increase in median is a reflection of both price appreciation and a lack of inventory at lower price points. There were only 8 homes sold on island for less than $800,000 last month. The May prior, 37 homes sold for less than $800,000.
- The average price of homes sold in May 2022 came out to $2,309,049. That is a 34% increase over last May’s median of $1,724,917.
- Strong activity in the luxury home market drove the high average price. Two homes sold for over $20,000,000. Six total homes sold for more than $5,000,000. Twenty-seven homes sold for over $2,000,000.
- The high sale for the month closed for $26,490,700. For that sum, the new owners acquired a home with 10,500 sf of living space, 8 beds, 8 baths, 3 kitchens, along with a separate pool house with room for guests, a six car garage and a caretaker’s quarters. The property is situated on an acre across the street from the ocean in Makena. This was the highest priced home to sell for the year to date.
May Condo Sales
- Maui Realtors reported 144 condo sales in May. That is 39% lower than the 237 sold in May of 2021.
- As with homes, increased mortgage rates may be tempering demand, but inventory is also impacting sales volume. The average number of active condo listings at the end of the month from February through April averaged about 56% less than the same period of 2021.
- While demand may be lower, the limited supply continues to make for a competitive market. Of the condos sold, 31.94% sold for over asking price in May. An impressive 66.67% sold for asking or above.
- That is a lot higher than the numbers from May 2021 when 15.28% sold for over asking price and 42.68% sold for asking price or above. The number of properties selling for above asking price in May 22 is down a little from April 22. That said, the percentage selling for asking price or above is higher.
- The median price of condos sold in April is $747,000. That is 21.46% higher than last April’s median.
- The average sales price for the condos sold in April came out to $1,136,318. This is 13.68% higher than the average price in April 2021.
- Luxury condo transactions remain strong with one sale over $10,000,000, 3 over $5,000,000 and 22 sold for $1,500,000 or higher.
- The highest price condo sale for the month closed for $11,900,000. That buyer now owns a 3 bedroom, 4 bathroom condo with 2,814 square feet of living space at the Andaz Residences Wailea.
Current Market Indicators
If you are long term reader of our stats post, you will know the familiar refrain that sales are a lagging indicator. We wanted to look at just a few stats that might give a better sense of current market conditions.
As noted repeatedly in the May sales stats, inventory, or lack thereof, remains a big driver in our market. On the last day of May, there were 213 active home listings in Maui County. That is a 7.5% increase from 198 listings at the end of April. On the last day of May, there were 175 active condo listings. That is just 1.7% above the 172 on the last day of April.
Nationally, the inventory of homes for sale rose 25% from April to May. Maui is clearly lagging behind the mainland when it comes to changes in inventory. That said, as noted in Market Musings X, any increase in inventory on Maui at this time of the year goes against pre-Covid trends. Inventory dropped on Maui between the last day of April and the last day of May in 2017, 2018 and 2019.
We also continue to track the number of properties going under contract within the first ten days of coming to market. Of the 55 homes and condos listed between May 18th-25th, 17 or 34.54% of the new listings went under contract within the first ten days of going on the market. That is a slight decline from the 35.55% between May 7th and 14th. It is down substantially from the 56% we reported in mid-February. For comparison to Pre-Covid days, 23.8% of listings that went to market between May 18th-May 25th, 2019 went under contract in the first ten days.
The one last metric we are trying to track is price reductions. The number of active home listings with price reductions is sitting at 29.5%. This is down from May 24th when 33% of active home listings reduced their price at least once. Of the active condo listings, 20.9% reduced their price one or more times. That is up from the 18.2% of active condo listings that reduced their price on May 24th.
A Couple of Thoughts on The Numbers
One number that stood out is the decrease in the number of price reductions among the active home listings . Prior to calculating the numbers, I expected to see an increase in price reductions for active home listings. Anecdotally, it seems like there are more price decreases. So why the lower number? Without doing a deep dig into the recent pending sales, I suspect that price reductions are proving to be effective. People overshooting the market initially are able to find the market via price adjustments.
Overall, the numbers above point to a market that while cooler than this winter, still remains resilient. The shifts in the market are gradual and not drastic. Inventory numbers well below normal combine with existing levels of demand to create conditions that are still more competitive than a “normal” Maui market.
While the numbers show some of the variability in the market between homes and condos, they don’t show the variability by geography and price point. On May 31st, I went through the end of the month inventory for homes and condos and broke it down by geography and price point. The purpose of the exercise wasn’t so much for this post but to create a baseline for future analysis trying to track potential shifts in inventory and demand at a district and price point level. That said, there is pretty clearly some variability evident. This post is getting a little long already so I will save my findings for the next edition of the Musings. The one immediate takeaway is that sellers will likely want to talk to their Realtor about conditions specific to their segment of the market when determining pricing and negotiation strategies.
The Obligatory Maui Photo Tweet to Brighten This Blog Post
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Contact the Maui Real Estate Team if you have any questions about this post or if you need assistance buying or selling Maui Real Estate. We look forward to hearing from you and discussing your real estate needs.
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Maui Market Musings Volume VI
The sixth edition of Maui Market Musings is here. The latest edition includes a review of the first quarter statistics that point to scarcity and competition in the market. It also delves into the taboo question of whether we are in a housing bubble. For that and a little more, keep on reading.
All Done with Quarter One
March 31st marked the end of the first quarter. The end of the quarter presents an opportunity to look back at the sales activity during that time. Specifically, I wanted to show the numbers that point to the scarcity of listings and the resulting competition for properties on the market.
The signs of scarcity are pretty clear in the numbers. New listings of single family homes decreased 9.5% compared to the first quarter of 2021. New listings of condos fell 8.9% compared to the first three months of 2021. We entered the year with low inventory and the lower number of new listings meant less relief for buyers. There was an average of 188 homes for sale during the first quarter. That is down 29% from the average of 264 during quarter one of 2021. The average number of condos for sale during the first quarter of 2022 was 71% lower than early 2021! The lack of inventory showed when it came to sales volume. Home sales for the quarter are 13.7% lower and condos sales are 3.7% lower.
The signs of heightened competition are also readily apparent in the first quarters statistics. Days on market for homes dropped 13.7% compared to the first three months of 2021. The average days on market for condos in the first quarter was 76 compared to 143 in the first quarter of 2021. That is a 46.9% drop! Competition impacts bidding strategy and drives offer prices higher. Of the homes that sold in the first quarter, 64.58% of the homes sold for list price or above. That compares to 42.21% during the first three months of 2021. For the condos that sold in Q1, 71.02% sold for asking price or above compared to 34.52% in the same period of 2021.
Of course, changes in the median prices also reflect increased competition. Median home and median condo prices increased 20.4% and 25.2% respectively compared to the first quarter of 2021. The March monthly median prices were both all time highs at $820,000 for Maui condos and $1,177,500 for Maui homes. For the data geeks looking for more numbers, here is a link to the Realtor’s Association of Maui March Statistics.
Are We in a Bubble?
The question now is where does the market go from here? After two straight years of extraordinary growth, the conventional wisdom among real estate economists seems to be that the national real estate market should slow gradually as the year progresses. Rising interest rates would help to cool demand despite continued low inventory. Over the last week, some economists are taking a more bearish outlook. Most prominently, the Dallas Branch of the Federal Reserve released a paper that highlights what they see as signs of a housing bubble.
The Dallas Branch’s paper highlighted the metrics that indicate a growing break between the market and what fundamentals support. Specifically, they site price to rent and price to income ratios as being out of balance. They show that the current ratios are starting to look similar to what we experienced during 2006/2007 when the last real estate bubble was about to burst. If comparisons to 2006 and 2007 give you a case of the cold sweats, take some solace from the fact that the Dallas Fed is not predicting a similar fallout if there is a housing correction.
Another thing that is worth noting from the Fed’s article is their explanation for what causes bubbles and markets to diverge from fundamentals. It often happens when there is a widespread belief that price increases will continue. Buyer’s fear missing out before prices go up and so they bid more aggressively. This of course helps to spur price increases. In light of this, I thought this tweet from Economist Ali Wolf from Zonda was interesting.
Will the Dallas Fed’s article put a dent in some of the exuberance that caused market fundamentals to fall out? In other words, will the widespread belief in additional price increases start to fade? Or will discussion of housing bubbles fade as we move away from the publication date of the article? It is worth noting that the discussion of bubbles is happening at a time when interest rates for 30 year loans spiked near 5%. Is there a threshold with mortgage rates that saps that exuberance?
While there may be a few more people raising concern about a housing bubble, it’s safe to say that this is not an emerging consensus. There are still a significant number of economists advocating for the gradual shift. This is a volatile time in our world making prognostication that much harder.
What does this mean for buyers and sellers? For buyers wondering whether now is an ok time to buy, we ask two questions. Can you afford it and how long do you plan to own the property? With the first question, how much of a stretch is it for you to buy right now? Are you going to be leaving yourself house poor? If the answer to the last two questions is yes, it may not be the best time to buy. Are you planning to hold the property for 5-10 years or just looking for an interim home for a couple of years? If it is a more short term purchase, again now may not be the best time to buy. It depends on your individual circumstances.
For sellers, market conditions remain in your favor. That said, it is a time to be more vigilant about economic and market conditions. We are continuing to see sellers really push the envelope on pricing with mixed levels of success. If and when market conditions start to cool, those sellers may end up way out of line with the market.
Notable on Recent New Inventory
Over the last week or so, it seemed like a few more properties came to market that only sold within the last couple of years. I looked at new listings between March 21st and April 4th to see if the data backed up anecdotal observations. Of the 150 new listings, 15 sold previously between 2020 and 2022. That’s a nice even 10%. Looking at those 15 listings, it is clear that there are some that are fix and flips, some are flips with limited or no improvements made by the seller, some appear to be sales due to life changes and some are just head scratchers. The head scratchers were the properties that closed and were back on the market within the month with more limited price increases.
A little Maui Beauty to Brighten the Post
A drier than normal winter meant fewer rainbows on Maui. The return of trade showers last week brought not only some much needed moisture, but also some color to the sky.
Contact The Maui Real Estate Team
Dynamic market conditions, limited inventory and strong competition demand quality representation. Contact The Maui Real Estate Team if you need assistance buying or selling property on Maui. We would love to take the time to discuss your real estate needs.
Maui Real Estate Blog
Maui Market Musings Vol. IV
This week’s market musings takes a look at some of the notable numbers from the February sales statistics and the latest on interest rates. Without further ado…
Notable Numbers from The February Stats
The Realtors Association of Maui recently released their February 2022 statistics. These are some of the numbers that I found particularly noteworthy.
- New inventory decreased for homes and condos 6.7% and 17.3% respectively compared to February 2021. This speaks to Maui’s continued inventory crunch.
- Pending sales for homes and condos dipped by 27% and 31% compared to last February. This is in part due to a lack of inventory and in part because the period between February and April of 2021 were the busiest in Maui’s history for closed transactions. For these same reasons, I surmise you will see similar year to year decreases in pending sales throughout the rest of the Spring.
- The days on market for homes increased just than 1% compared to last February. On the other hand, condo days on market dipped 46.8% compared to last February. While some of this is due to a particularly strong condo market, this can also be traced to a divergent home and condo market during 2020. Home inventory decreased throughout 2020. Condo inventory, and vacation rental condo inventory in particular, increased throughout most of 2020. It only started to trend down towards the end of the year after the reopening of our tourism economy in October. There was a pretty healthy inventory of condos with higher days on market to start 2021. As a result, many of the early 2021 sales had pretty high days on market. In 2022, there are a lot fewer condo listings sitting around for long before going under contract.
- The median sales price of single family homes and condos increased 18.3% and 31.2% respectively. To be clear, these numbers do not directly reflect changes in property values. Changing values do influence median sales price. However, the median price is also influenced by the composition of the properties sold. We touched on estimated price increases since the start of Covid in Musings Volume II. Across a variety of properties, we saw values increases between 28 and 46% over the last two years.
- Single family home inventory decreased 25.6% compared to last February. Condo inventory is down 71.3%. Again, this goes back to the differences of inventory to start 2021. The condo market had a pretty healthy supply of condos for sale, while the home market entered the year with far fewer condos. Relevant to the here and now, inventory levels remain really low for both homes and condos.
- Two markets stood out for an increase in activity. Both the Kihei and the Napili, Kahana, Honokowai districts saw big increases in condo sales. Vacation rental condo sales drove the increased activity. Sales of Kihei condos that allow vacation rentals are up 32% this February compared to last February. Sales of Napili, Kahana and Honokowai vacation rental condos were up a whopping 93.75%.
Interest Rate Watch
After flat to declining interest rates, the 30 year fixed rate jumped above 4% for the first time since 2019.
This is a resumption of the upward trend over the last six months. Rates dipped with the start of the war in Ukraine as investors shifted from equities to more secure bonds. Mortgage rates tend to generally follow the ten year treasury bond. A subsequent sell off in bonds due to news on inflation and future fed increases allowed rates to increase again. While the gradual increase in rates is forecast to continue, some economists predict that global uncertainty may dampen the rate of increase in mortgage rates this year.
And For Something Non-Real Estate Related…
My posts can’t be all numbers all the time. Chances are if you are reading this, your interest in the island extends beyond real estate. You appreciate Maui’s people, natural beauty, flora and fauna. With that in mind, I thought it was worth sharing this short video from earlier in the week. Here is one of Maui’s most famous winter visitors being saved from an entanglement of fishing gear.
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That’s it from this week’s Market Musings. Contact us if you have any questions about the market, requests for content on future posts or of course need assistance buying or selling property on Maui.