Maui Real Estate Blog

Maui Market Musings Vol. I

Welcome to Maui Market Musings! This is a new feature that I hope to post weekly or at least every other week. This is going to be something of a grab bag post where I hit on a variety of topics relevant to the Maui Real Estate market and beyond.

January Statistics

The first month of the year is done and dusted and that means the Realtor Association of Maui January stats are out. Here are some numbers worth highlighting.

  • Pending Home and Condo sales decreased in January compared to January of 2021 by 21.3 and 31.3% respectively.
  • The decrease in activity is due largely to decreased supplies. The volume of homes and condos for sale are down 34.6% and 75.8%. As it stands, there is about 1.8 months of home inventory and .8 months of condo inventory on the market. Six months supply is typical of a balanced market.
  • The limited supply is translating into upward price pressure. The median home price increased 18.1% compared to last January and the median condo price rose 26.3%. Those numbers aren’t an exact reflection of changes in property values compared to last January as the composition and price point of properties sold is going to have an impact. That said, it is safe to say that prices are up substantially.
  • Limited supply is meaning that properties are selling faster. Days on market for homes decreased 26.8% compared to last January. Days on market for condos decreased 39.9%.
  • Current market conditions also mean that properties are selling for a higher percentage of list price. On average homes are selling for 100% of list price and condos are selling for 100.1% of list price.

What Does This Mean for Buyers and Sellers?

How are these numbers translating to what we are seeing first hand in the market? We listed a nice home in Haiku last week. Within that first week, we showed the property just over 20 times, received 12 offers and went under contract for well over asking price.

Buyers should expect that properties priced close to market will attract multiple offers. The buyers winning these bidding wars are being aggressive in some cases going well over asking price and waiving some if not all contingencies. Sellers who price close to market can expect a lot of showing activity with their home.

The pricing close to market component is important. While some buyers are really reaching, some sellers may be overshooting the market. We are seeing this in particular with some higher priced parts of the market. Last year, twelve homes sold in the Lanikeha subdivision. The average sales price for the twelve homes was $2,942,347 and the median price was $2,879,500. As of right now, there are seven active listings, no pending sales and no sales. The average price of the $5,439,714 and a median price of $5,200,000. Only one of the seven listings is priced below last year’s high sale for the neighborhood. While the year is young, this is one area where homes are currently sitting.

The inventory crunch, short days on market and rising prices are not unique to Maui. This is a national trend. Mike Simonsen of Altos Research tracks this on a weekly basis and he reported new national lows for inventory last week.

It’s worth reading through Mike’s whole thread. He also touches on Interest rates. Speaking of rates…

Rising Interest Rates

Mike’s thread mentions the impact of rates on the market. On a national level, the market appears to be relatively unfazed by the raise in rates. It hasn’t been insubstantial. Talking to one Maui lender today, she indicated rates are up .5 to .6 percent over the lat 45 days and .35% in just the last 15 days. With rates predicted to rise further, it will be interesting to watch the market overall and the lower price points in particular. Maui residents are already struggling with affordability.

The Vacation Rental Condo Market

One of the stronger areas of the Maui market is vacation rental condos. Low inventory and strong demand is pushing prices up. Last week, I came upon an an analysis that claimed Maui is the best market for vacation rental investments in 2022. I have to say, I question that analysis. There is no doubt Maui is a desirable place to own a vacation rental condo, but that isn’t based on rental returns. It seems if anything that the vacation rental market is doing well in spite of rental returns. While rental rates are going up, they aren’t quite keeping up with appreciation. Buyers looking at proformas for vacation rental condos are finding mostly 2-3% CAP rates. It seems like more buyers are looking at their condos as use assets where income helps to defer a portion of the costs.

Last Day for Hoku’ula Lottery Registration

Tomorrow is the last day to register for the Hoku’ula market rate housing lottery . This Upcountry subdivision will bring a significant amount of new inventory to market over the next year. There are already 98 workforce housing homes under contract with 98 market units coming. The price point for the homes available range from $1,285,000 to $1,650,000. The neighborhood offers good views, new construction, and about as convenient an Upcountry location as you could find.

Contact The Maui Real Estate Team

We hope this first edition of the Maui Market Musings offer some insight into current conditions. Contact The Maui Real Estate Team if there are any subjects you want us to touch on or if you need assistance. We look forward to being of service.

Pete Jalbert

Maui Real Estate Blog

Weekly Maui Real Estate Update May 16

Sales Down, but Pending Sales Trending Up

It’s that time of the week when I check in on the Maui Real Estate market during the age of Covid-19. We continue to see some promising signs as pending sales activity increases. On the other end of the spectrum, this week’s closed sales numbers are the lowest yet since the pandemic began. Low pending sales in late March in early April left their mark are impacting current closings.

Weekly Pending Real Estate Sales by Property Type in Maui County since the emergence of Covid-19 as a global threat.
A chart of pending weekly pending real estate sales by property type between late February and Mid May. The weeks run Wednesday through Tuesday. I used this start and end time based on the beginning of stay at home orders which began on March 25th.

Maui Realtors reported 39 new pending sales over a seven day period between March 6th and 12th. That is an 8% increase over the previous week and the fourth straight weekly increase in pending sales. It is only 5% below the same week of 2019. While that number looks pretty remarkable all things considered, context is key. The 41 sales from the same week last year appear to be a comparatively slow week for activity in the spring of 2019. The weeks before and after included 62 pending sales and 60 pending sales respectively. While we are seeing positive signs with the increase of activity, buyer activity has yet to rebound like some mainland markets.

Inside This Week’s Pending Sales

  • The 39 pending sales from the last week include 21 pending home sales, 14 pending condo sales and 4 new lot pendings.
  • This marks seven of eight weeks that pending home sales outpaced pending condo sales.
  • The composition of condo sales shifted this week. This is the first time that non-vacation rental condo pendings outpaced vacation rental pendings.
  • The four land pending sales is the highest weekly total since early March.

This Week’s Closed Transactions

Weekly real estate sales in Maui County by property type from late February through Mid May. The sales show the impact of the Covid-19 pandemic on market activity
This chart shows weekly closed transactions by property type from late February through mid May. The impact of Covid-19 particularly as you get closer to present with most pre-pandemic sales already closed.

Maui Realtors reported 27 closed transactions over a seven day period between May 6th and 12th. That is down 25% from last week and 58% from the same seven day period of last year. Many pre-covid contracts closed already and the bulk of the sales stem from transactions during the pandemic. Closed sales are a lagging indicator of market demand.A lot of these transactions that are closing were from the weeks of really slow activity in late March and Early April.

The closed transactions include 12 home sales, 14 condo sales and 1 land sale. The one other thing that I thought was notable from the closings was the comparatively high number of luxury market sales. Fifteen percent of the transactions closed for more than $2,000,000.

A Quick look at The Big Picture

Maui and Hawaii in general effectively flattened the curve. We reported the last new case on island on Saturday. Only one patient remains hospitalized on Maui. These positive signs will allow the opening of additional business on the island. Hair and Nail salons are set to open May 22nd. Dine in restaurants open June 3rd. That said, social distancing will be in place for the foreseeable future. The governor is discouraging tourism through at least June. Determining a safe and effective plan for reopening the island’s for tourism remains a significant challenge.

It is likely that the lack of tourism will weigh on our real estate market, but the extent it will impact us remains a big unknown. At this time, inventory remains very low and prices appear to be stable.

Contact The Maui Real Estate Team if you are considering buying or selling property on Maui. We would welcome the chance to talk, Zoom or Facetime to discuss your real estate needs.

Pete Jalbert