Maui Real Estate Blog

Maui Luxury Condo Market Update

Earlier this month, we took a look at Maui’s Luxury Home Market. Today, I wanted to turn my sights towards the high end condominium market. This post will include totals on all of the condos sold for the year to date (as of September 20), notable numbers from this year’s sales, and market conditions specific to the three resort areas of Wailea/Makena, Ka’anapali and Kapalua.

When we have discussed luxury condos on our blog, we have used the $1,500,000 and above price point as the threshold for pricing. When we first started to look at the luxury condo market, that was something of a starting point for some of the really high end condos. To be clear, there are some very nice condos below this price point. That said, we want to be consistent with our methodology. So all properties discussed in this particular blog sold for $1,500,000 or more.

Maui Luxury Condo Sales Volume and Median Price
There were 69 condos sold thus far this year as of September 23, 2015. The median price for those sales was $2,250,000. Between January 1, 2014 and September 23, 2014, there were 63 sales at a median price of $2,575,000. That is roughly a 10% increase in volume and a 13% decrease in median price.

Notable Luxury Condo Sales Numbers for the Year to Date.
Here are some of the most noteworthy numbers from the luxury condo sales this year.

  • The highest priced condo to sell thus far this year closed for $8,500,000. This is a three bedroom, three and a half bath, beachfront unit with 2,919 square feet of living space at Wailea Beach Villas.
  • Including the sale at Wailea Beach Villas, there were a total of 12 condos sold over $4,000,000.
  • Honua Kai saw the most sales activity of any condo complex on the island. There were a total of 20 sales at Honua Kai over $1,500,000 including 11 new developer sales.
  • The Wailea and Makena Market saw the most sales activity over $1,500,000 with a total of 28 sales. Kaanapali saw the second most activity and Kapalua was third.
  • In addition to the sales activity in the major resort markets, there was one sale in Lahaina, one in Kihei, one in Spreckelsville and two on Lanai.
  • There were no bank owned condos or short sale transactions among this year’s sales

Wailea and Makena Condos
Wailea and Makena have had a good year for sales to date. The 28 sales reported exceeded last year’s total of 20. That is a 40% increase in activity. Much of that increase in activity occurred in Makena. While there was only one sale in Makena during the same period last year, this year there were 6 sales. Five of the six Makena sales were at Makena Surf. The remaining sale was at Na Hale O Makena. This was a particularly busy year for Makena Surf with the five sales reported thus far more than any year since 2004.

The Wailea sales over $1,500,000 were spread out among a variety of complexes. There were 7 sales at Hoolei, 1 at Andaz, 2 at Kai Malu, 1 at Papali, 1 at Wailea Ekahi, 3 at Wailea Elua, 3 at Wailea Beach Villas and 3 at Wailea Point. Hoolei continues to lead the way in high end sales in Wailea. The size of the condos combined with their price point and the potential to access amenities at the Grand Wailea continues to be an attractive option to buyers. While Wailea Beach Villas did not have the same sales volume, it was noteworthy for the fact that it had the top two highest priced condo sales on the island thus far this year.

This chart compares looks at the sales in Wailea for the year to date compared with the current active inventory on the MLS.

It will be interesting to see what happens in the Wailea and Makena market for the rest of the year and into 2016. There is still a good selection of variety to choose from on the MLS. There is plenty of active inventory on the MLS with 40 condos on the market. There are unlisted properties available at Andaz and the new Keala O Wailea development. There is also a chance that we might see pre-construction sales at Makali’i at Wailea before the end of the year. You can see all of the current Wailea and Makena Condos listed on the MLS on MauiRealEstate.com. Contact The Maui Real Estate Team if you have questions on any of the unlisted properties.

Kaanapali Condos
The Ka’anapali Condo market has also had a fairly strong year with 26 sales reported to date. That is down 7% from the 28 units sold during the same period last year. The Ka’anapali market has been buoyed over the last several years by activity at the Honua Kai Resort. Honua Kai has been a big draw as the first fee simple whole ownership new development along this stretch of coast for over 20 years. Of the 26 condos sold in Ka’anapali for $1,500,000 or more, 20 were at Honua Kai. Ka’anapali Ali’i has had 5 sales thus far this year. There was also one sale at the Masters.

This chart compares the year to date sales in the Kaanapali area with the current inventory of Kaanapali listings on the MLS.

The Ka’anapali luxury condo market is starting to see shrinking inventory with only 20 active listings over $1,500,000. A big part of that stems from Honua Kai. The developer is getting close to selling out their remaining units. There are only 3 new developer listings left on the MLS. I believe there are still a handful of additional new developer units in addition to those posted on the MLS. There are only three units active at Ka’anapali Ali’i with the remaining listings located at Ka’anapali Shores and the Whaler. It will be interesting to see if the dwindling inventory at Honua Kai will have an impact on places like the Whaler and Ka’anapali Shores. Buyers have shown a preference for the newer Honua Kai Condos leading to depressed sales at the other places. Will some of the older condos nearby start to see an uptick in activity? You can see the full inventory of Kaanapali Condos listed on the MLS via MauiRealEstate.com.

Kapalua Condos
The Kapalua Market has seen pretty similar activity levels to what we saw last year. There have been 10 sales reported in the year to date this year. There were 9 sales reported over the same period last year. The focal point for luxury condo sales in Kapalua has been the Montage Residences on Kapalua Bay. Montage came on the market last June. This property was formerly the Ritz Carlton Residences. The Ritz Residences went into foreclosure and the property was purchased by Lantern Capital. Lantern appointed Montage to manage and revamp the property. Montage has seen steady sales since it has come on the market despite pricing that starts in the mid three million dollar range. There have been 8 sales reported at Montage thus far this year.

The other notable sale was at Ritz Carlton Residences. To be clear, this is a different animal from the Ritz Residences Kapalua Bay that was previously foreclosed upon. These condos are part of the Ritz Carlton Hotel. The Ritz condos had been on the market closer to the downturn and weren’t getting as much traction. They are back under the market with a new sales team. It will be interesting to see how these condos are received by the market going forward. From what I have heard, they are getting a pretty good response.

While the two new developments have been relatively well received, some of the older complexes have seen slower activity. High end Kapalua condos like Coconut Grove and the Ironwoods are traditionally condos that see limited inventory and limited sales volume. There was one sale in the Ironwoods this year. Kapalua Bay Villas is a condo that seems to be getting poor market feedback by luxury buyers. There have been 4 sales over $1,500,000 at Bay Villas since 2009. There are currently 7 active listings in the complex with none pending. It appears as if sellers in this complex may need to adjust pricing if they are going to generate interest from buyers.

This chart compares the year to date sales vs the active MLS inventory for condos in the Kapalua Resort.

For the rest of the year, I would anticipate that we will continue to see activity at Montage and the Ritz. Buyers in Kapalua have a good selection of inventory to choose from. You can see the full inventory of Kapalua Condos on the MLS on MauiRealEstate.com. Contact The Maui Real Estate Team directly if you would like us to assist you with buyer representation at either the Montage or the Ritz. There is more inventory available at both of those condos than what is showing on the MLS.

Other Condo Sales Around the Island
In addition to the activity at the resort communities, there have been a handful of sales from other communities around the island. There was one sale in Spreckelsville at Sugar Cove, one in Lahaina at Puamana and one at the Royal Mauian in Kihei. There were also two sales over on Lanai including one at the Terraces at Manele and the other was at the Palms at Manele. The two Lanai purchases were both Larry Ellison buys as he continues to expand his holdings on the island. We tend to see limited activity on higher priced condos outside the main resort areas not so much due to lack of demand as it is a lack of inventory. There are only a handful of condos outside the resorts that can sustain prices of $1,500,000 or greater and they tend not to have a ton of inventory.

Overall Thoughts on the Maui Luxury Condo Market
Buyers still have a great collection of condos to choose from around the island. There are both new development opportunities and condo resales in more established condominiums. While the depth of the inventory may provide options, sellers in this price range tend to have more staying power. The challenge is finding potentially motivated sellers who might want or need to redeploy their money elsewhere.

I would expect that the luxury condo market will continue to be perform at or near the levels we have seen for the year to date. While interest rate increases have been postponed, this isn’t a part of the market that is as interest rate sensitive. The bulk of the buyers are using cash or private banking. The biggest potential impacts to the market come from the greater global economy. Poor performance in the stock market is a potential threat. There seems to be something of a correlation between the DOW and high end sales on the island. We have not seen any significant influxes of buyers from China like some cities in the Western U.S. and Canada. Contact The Maui Real Estate Team if you are interested in buying or selling a luxury condo on Maui. We would welcome the chance to sit down with you for a free consultation and to discuss your interests and needs.

Pete Jalbert

Maui Real Estate Blog

Sneak Peek at the March 2015 Maui Real Estate Statistics

The beginning of April means our peak visitor season is wrapping up. It is also time to bid farewell to the bulk of the Humpback Whales that winter in the waters off our coastline. The end of another month also means another opportunity to take a look at how the Maui Real Estate market is performing. This sneak peek at the March Maui Real Estate Statistics includes information on sales volume, median pricing, pending sales, notable numbers and a few thoughts on the stats and the state of the market for buyers and sellers. Without further ado, here are the March numbers.

March Real Estate Sales Volumes and Median Prices

This chart compares the real estate sales volumes for Maui County during March of 2014 and 2015

By my count, there were 83 homes sold in March 2015 at a median price of $625,000. There were 70 homes sold in March of 2014 with a median price of $590,500. That calculates to a 19% increase in sales volume and a 5% increase in median price.

I counted 122 condos sold in March 2015 at a median price of $442,500. By comparison, there were 127 sold with a median price of $420,000 in March of last year. That is a 4% decrease in volume and a 5% increase in median price.

I counted 14 lots sold in Maui county during March with a median sales price of $528,500. That is the exact same number of sales as March 2014 when there were 14 land transactions with a median price of $507,500. That calculates to a 4% increase in median when comparing this March to last March.

Other Notable March Maui Real Estate Sales Numbers
While compiling the sales volumes and median prices, I came across a few other numbers that were worth sharing from the March Maui Real Estate sales activity.

  • The highest priced home sale on Maui in March was $14,500,000 for a beachfront home in Kihei. The 5,682 square foot home is located on a half acre lot directly on Keawakapu Beach.
  • This was one of five home sales over $2,000,000 for the month. In addition to the Keawakapu home, there were sales in Kapalua, Spreckelsville, Olinda and one additional sale in Kihei.
  • The highest priced condo transaction last month was a 3 bedroom, 3.5 bath unit at Montage Kapalua Bay which sold for $3,995,000.
  • It was a busy month of sales for luxury condos on Maui with 13 closes over $1,500,000. There was one additional close at Montage, 4 sales at Honua Kai, 2 at Ka’anapali Ali’i, 2 at Wailea Point, a Wailea Elua, a Na Hale O Makena and a Masters.
  • The highest priced land sale last month was $1,250,000 for a 5.12 acre lot in Launiupoko.
  • There were 12 bank owned sales that closed in March as compared to 4 bank owned sales last March. There were 4 short sales that closed in March compared to 12 successful short sales last March.

Some Quick Thoughts on the March Stats
March saw a resurgence in home sales activity with sales outpacing both last month and the same period last year. The strength of the market varies by price range with homes below and close to the median sales price seeing the greatest amount of demand and activity. While Luxury home sales improved last month, we are still behind the pace of sales for 2014. This is an interesting market segment as there is a lot of inventory providing abundant selection for buyers. That said, it isn’t a true buyer’s market in the sense that there aren’t a lot of really motivated sellers. The majority of home owners in the higher price ranges tend to have additional staying power that thus far has enabled them to hold out for higher prices.

Condo sales activity dipped below the levels that we saw during March of 2014. Overall sales volume is being impacted by a soft middle of the market specifically in the vacation rental condo market. I would surmise that some of the dip stems from a lack of activity among Canadian buyers. The weakened Canadian Currency has put a good number of potential Canadian buyers on the sidelines. You could also argue that some of the decreased activity in the middle of the condo market may be due to inflated asking prices. With demand down, it is surprising to see how many condos are priced well above recent comparable sales. That said, this is another area of the market where seller motivation appears to be lacking. There are quite a few sellers with enough means and sufficient rental revenue to enable them to hold out for higher pricing. The lower price points of the market continue to see pretty healthy demand. The high end of the market condo market was particularly strong last month with 15 sales over $1,500,000. There is a good selection of high end condos on the market and buyers appear to be taking advantage of the quality available.

The land market continues to chug along at about the same clip as what we were seeing in 2014. Limited financing options and a lack of inventory at lower price points have been the biggest constraints to increased sales activity.

March Maui Pending Sales
Sales are always a lagging indicator of current demand. With that in mind, we started tracking pending sales in our monthly statistics posts. Here is a comparison on what we were seeing going under contract in March of 2015 compared to March of 2014.

This chart compares pending sales in Maui County during March of 2014 and March of 2015

It appears as if March was a pretty strong month for buyer demand for all but land, as both home and condo pendings outpaced what we saw in March of 2014. It is good to see the last full month of buyer’s season end on a good note. It will be interesting to see if the market sustains itself as we transition out of peak buyer’s season later in April.

What Does it Mean for Buyers and Sellers?
Maui market conditions have not seen any significant changes throughout our peak winter sales season. Buyers will find that market conditions vary pretty widely based on price point and geography. The greatest competition among buyers is occurring at or below the median sales price for each community. That said, buyers shopping at higher price points may find that well priced properties can go quickly at almost any price point. It all depends in part on demand within the specific community. As a result, buyers should prepare themselves so they can act quickly when the right opportunity comes along. We strongly advise buyers who will need financing assistance to get pre-approved prior to their search. Prospective Sellers should consult with a Realtor to better understand market conditions specific to their neighborhood and community. While some parts of the market are strong, other parts still have a glut of inventory. Sellers who want to sell quickly should take a strong look at depth of inventory and recent sales prices when developing their go to market pricing. Contact The Maui Real Estate Team if you have questions about buying or selling property on Maui. We would welcome the opportunity to sit down with you to learn more about your real estate needs.

Pete Jalbert

Maui Real Estate Blog

Wailea and Makena 2014 Year End Review and 2015 Outlook

After looking at the North Shore communities of Paia and Spreckelsville, we decided to head to South Maui for a look at the Wailea and Makena Real Estate markets. This is an overview of how this market performed in 2014 and what we may expect in 2015. Wailea is Maui’s most renowned resort community thanks in part to its beautiful beaches, three golf courses and luxury hotels and spas. Makena is the more understated of the two communities, but is arguably more exclusive with some of the island’s most expensive real estate. These are the notable numbers from the 2014 Wailea and Makena Real Estate Sales activity, a few thoughts on the 2014 market, followed by our thoughts on what to expect in these luxury communities during 2015.

This chart compares the real estate sales volumes for homes, condos and land in Wailea and Makena during 2013 and 2014

There were 32 homes sold in Wailea and Makena in 2014 with a median price of $1,892,000. In 2013, there were 29 homes sold with a median price of $2,750,000. That is a 10% increase in activity and a 31% decrease in median price.

There were 92 condos sold in Wailea and Makena in 2014 with a median price of $1,021,250. In 2013, there were 122 condos sold at a median price of $1,105,000. That is approximately a 25% drop in volume and an 8% drop in median price.

There were 7 land transactions in Wailea and Makena in 2014 with a median price of $1,550,000. There were 12 land sales in 2013 at a median price of $1,150,000. This is a 42% drop in sales activity and a 35% increase in median.

Notable Numbers from the 2014 Wailea and Makena Real Estate Market
While compiling the numbers above, I came across a few other numbers that were worth sharing.

  • Of the 32 homes sold, 7 were in Makena.
  • The high sale price for a home was $9,300,000 for an Oceanfront home in One Makena Place. This is the second year in a row that the highest priced sale was located in this gated enclave.
  • The Makena Place transaction was one of 15 sales over $2,000,000 and 6 sales over $5,000,000 that closed during 2014. In 2013, there were 14 sales over $2,000,000 and 7 sales over $5,000,000.
  • There was one sale under $1,000,000 in all of Wailea and Makena during 2014. The Wailea Kai home with three bedrooms, three baths and 1,766 square feet of living space sold for $890,000.
  • Wailea Fairway Estates was the subdivision in Wailea with the most sales activity with 6 closes in 2014.
  • The highest priced condo sold in Wailea and Makena during 2014 was one of the Villas at the Andaz Residences. This 3 bedroom, 4 bath condominium sold for $5,495,000.
  • The Andaz Condo was one of 26 condos that sold for $1,500,000 or more during 2014. There were 36 condo sales over $1,500,000 in 2013.
  • Grand Champions was the condo complex with the highest number of sales in 2014 with 12 total sales.
  • Only 2 of the condos sold were in Makena. Both of the condos that closed were at Na Hale O Makena.
  • There were 5 condo sales under $500,000 in 2014. In 2013, there were 2 condo sales under $500,000.
  • There were 5 REO or bank owned properties that closed in Wailea during 2014. That was the same as the 2013 REO sales totals for the area.

Thoughts on The Wailea and Makena Real Estate Market During 2014
There are a few things worth discussing from the 2014 Wailea and Makena Sales numbers. The dip in condo sales is certainly noteworthy. There was a decrease in condo sales island wide, but the 25% drop in Wailea outpaced the 11% drop throughout Maui County. It is especially interesting considering the fact that condos sales over $1,500,000 were up 9% around the island. There are no obvious reasons for the decrease in activity that jump out at me. With that in mind, I broke down the sales further to see if any plausible explanations appeared.

The first thought that came to mind was that there may have been a decrease in activity at the lower end of the market due to a contraction of inventory. That was something we were seeing in other geographic areas around the island. Looking at condo sales under $1,000,000 in Wailea, there was a 25% drop in total sales compared to 2013. However, when you look at condos sold between $1,000,000 and $1,999,000, there was a 38% drop in activity compared to the previous year. When you look at condos priced over $2,000,000, there was a 20% drop in activity compared to 2013. While it is possible the dip in activity below $1,000,000 may still be related to the contraction of inventory, what would explain the drop in activity in other parts of the market? It can’t claim to have definitive answers, but I have a couple of thoughts.

The dip in buyer activity in the $1,000,000 to $1,999,999 range may be a case of buyers deferring their purchase. There are a few different condo project that are expected to come to market in the Wailea market soon. Keala O Wailea and Makali’i at Wailea were both supposed to start pre-construction sales during the second half of 2014. Delays have pushed the initial sales sometime into 2015. There may be some buyers who opted to wait with the hopes of purchasing in one of the new developments verses purchasing at existing complexes like Kai Malu.

While the drop in sales was not as pronounced above $2,000,000, the dip was surprising nonetheless. There are a couple of factors at play that may have curtailed high end sales. Again, there may be competition from new developments. Makali’i may be causing some buyers to defer their purchase. At even higher price points, the Makena Golf and Beach Club may be causing some buyers to defer their purchases. The other factor at play is the draw of Montage in Kapalua. Traditionally, Wailea Buyers have been Wailea Buyers and Kapalua Buyers have been Kapalua Buyers. Even though they are both high end resorts on Maui, they tend to draw their own distinct clientele due to the unique personality of the resorts. When you look at the sales that have occurred at Montage, you are seeing quite a few buyers represented by Wailea area Realtors. It would appear that Montage is a property that has appeal to some traditional Wailea buyers.

The Wailea and Makena home market did not experience the same dip in activity as the condo market with sales exceeding 2013 totals. The dip in median home price does not reflect a decrease in values. It points to a shift in market activity with fewer high end sales and a few more homes sold in the $1,000,000-$2,000,000 range compared to 2013.

Activity in the the Wailea and Makena land market reflected the Maui Land market overall which saw a decrease in sales during 2014. The lack of sales wasn’t for lack of inventory. It is a question of where that inventory is positioned in the market. There was a lack of lower priced lots for sale. It also appears that the Ridge at Wailea, Wailea’s newest land development, may be priced above what the market is willing to support. There has only been one sale in the development since it came to market almost a year ago.

Wailea and Makena 2015 Real Estate Market Outlook
In our 2014 outlook, we anticipated that the Wailea and Makena Markets would be heavily impacted by the influence of new condo developments such as Makali’i at Wailea and Keala O Wailea. While some buyers may have deferred their purchases waiting for new developments scheduled to market, none of the new developments actually came up for sale. While we still don’t have definitive go to market dates for those two projects, the Makena Golf and Beach Club is starting to come on the market. This new development should have a big impact on the Maui Luxury market.

The Discovery Land Company’s Makena Golf and Beach Club is a significant new development. The area was in the initial stages of development during the last real estate boom only for the property to go into foreclosure during the downturn. The Wailea Beach and Golf Resort hotel, two golf courses and a total of 1,800 acres of land were purchased by consortium of AREA Property Partners, Trinity Investments and Stanford Carr Development LLC. The ownership group has chosen Discovery Land Company to spearhead a major redevelopment of the area that will occur in phases. Malauaka Estates is the first part of the development to hit the market. Maluaka Estates consists of eight oceanfront home sites with price tags ranging from $9 to $12 Million. Two of the Eight lots that hit the Maui Multiple Listings Service in the last month, and both are already under contract.

The existing Makena Beach and Golf Resort Hotel is being converted from a 310 room hotel into the Makai Residences. The Makai Residences will include 50 private residences ranging in size from 2,500 feet to 5,600 feet. Prices will range from roughly $6-$20 million range. The highest priced units will be far and away the highest priced condos sold to date on Maui.

In addition to the Makai Residences and Maluaka Estates, this phase of the Makena Golf and Beach Club will include the Kula Villas, Spa Hales and the Beach Cottages. The nine Beach Cottages will have 4 bedrooms, 4.5 baths and roughly 3,400 square feet of living space. Prices are anticipated to range from $9.5-$12 million. The 12 Kula Villas will be 3 or 4 bedrooms with sizes ranging from 2,950 to 3,900 square feet. Pricing is as of yet to be determined. The 5 Spa Hales are the smallest offerings in the resort to date. They will be two bedrooms and are likely to have the lowest entry point into the first phase of the Makena Golf and Beach Club.

Discovery also plans to create a a small village with a general store, restaurants, post office, retail space and a resort hotel. All residents will also be members of the Beach Club and have access to a variety of resort amenities.

The Makena Golf and Beach Club will be nothing short of the most significant new luxury development on the island since the creation of the Wailea and Kapalua Resorts. By all indications, the entry level price points will be significantly higher than either of those developments. It is tough to say what the impact will be on the rest of the Wailea and Makena market. The high price points will limit the impact on the lower priced properties in Wailea, while I suspect it may draw some buyers who would have otherwise been looking at some of the existing ultra luxury homes and condos within Wailea. This development also has the potential to attract buyers from some of the ultra high end resort communities on neighboring islands such as Kuki’o on the Big Island.

While we have spoken about the supply side of the market for 2015, we haven’t talked too much about demand. As it stands it appears that current economic conditions should favor a strong year for sales in Wailea and Makena. We may see a little less demand out of Canadian buyers due to the decrease in value of the Canadian Dollar.

You can check out the current inventory of Wailea and Makena Homes for Sale and Makena and Wailea Condos for Sale on MauiRealEstate.com You can also contact The Maui Real Estate Team if you are interested in buying or selling property in Wailea or Makena. .

Pete Jalbert

Maui Real Estate Blog

The May 2014 Maui Real Estate Statistics

June is the middle of fruit season on Maui. Local mangoes, lychee and lilikoi can all be found in farmer’s markets and grocery stores. June is also a month of Festivals and celebrations with the Wailea Film Festival, the Kapalua Wine and Food Festival, The Slack Key Guitar Festival at the MACC and more. The start of June also means that it is time to take another look at the performance of the Maui Real Estate market. We take a look at last month’s sales volumes, median sales prices and a few other notes and numbers from May sales activity. Sales are a lagging indicator that don’t reflect current demand so we also wanted to take a look at the number of properties that went under contract last month. Without further ado, here are the real estate sales numbers for May on Maui.

A Comparison of Real Estate Sales Volume in Maui County during May 2013 and May 2014
This chart compares real estate sales volume on Maui during May 2014 and May 2013

By my count, there were 85 homes sold in Maui County last month with a median price of $540,000. By comparison, there were 109 homes sold in Maui County during May of 2013 with a median price of $549,000. That is a 22% drop in sales activity and a 2% drop in median price compared to last May.

There were 116 condo sales reported in May of 2014 with a median price of $476,000. Last May, there were 139 sales reported in Maui with a median price of $380,000. That is a 17% drop in sales activity with a 25% jump in median price when comparing this May to last May.

There were 20 land sales reported in May at a median price of $575,000. In May 2013, there were also 20 sales with a median of $267,500. That is a 215% increase in median price.

While compiling the numbers above, I came across some more numbers and data from the May Maui Real Estate Sales that I thought were worth sharing.

  • The highest priced home sale last month was $3,150,000 for the Rainbow House in Ka’anapali Coffee Farms.
  • That was one of five home sales over $2,000,000 last month. The other four sales were geographically diverse with closes in Haiku, Launiupoko, Wailea and Maui Meadows.
  • The highest priced condo transaction was $5,000,000 for a beachfront unit at Coconut Grove in Kapalua.
  • That was one of 15 condo sales over $1,500,000 last month. Honua Kai Resort led the way with seven sales over $1,500,000. There were also two sales at The Whaler, one sale at Ka’anapali Ali’i and one sale at Ka’anapali Shores. The Ka’anapali area condos were a hot ticket for luxury buyers. The other big sales occurred at Kapalua Bay Villas, Wailea Point and Na Hale O Makena.
  • The highest priced land sale last month was $1,600,000 for 42 acres on the ocean between Wailuku and Kahakuloa.
  • There were only 8 bank owned closes all of last month. That is down 50% from the 16 bank owned closes we saw last May. Buyers looking for bank owned bargains will find that the pickings slim.
  • There were 10 successful short sales last month. That was done 58% from the 24 completed in May of 2013.

The thing that stands out most to me about this month’s stats is the drop in sales activity. As noted in the April stats, there was a drop in the number of properties that were pending in April as compared to the same time last year. That makes the drop in sales a little less of a surprise. We are also mirroring some trends that have been occurring on the mainland. The National Association of Realtors Reported that April existing home sales were down 6.8% compared to the same time last year. It is hard to pinpoint all of the factors that have led to the drop in sales activity in Maui County. That said, I think a significant driver has been the lack of inventory. The decrease in homes and condos at lower price points in our market has meant not enough supply to meet demand.

There were a few other things worth noting about the stats. The median sales price was down a little from last year. That seems counter intuitive with less low end inventory and clear signs of price reductions. The bigger driver may be a little less activity on the high end of the market. There were 7 fewer sales this May compared to last May over $1,000,000. On the other end of the spectrum, the condo medians were way up this month. Some of that gain could be attributed to price increases. The rest is due to shifts in market activity. Less inventory on the low end plays a part as does a big increase in activity on the high end. There were 26 condo sales over $1,000,000 this year compared to 12 last year. That is in spite of a 17% drop in overall condos sold. The huge jump in land medians can be attributed to a decrease in low end sales, an increase in high end sales and modest price increases. The small sample size for land sales contributes to big fluctuations in medians.

Does it look like the slow down in sales activity will continue into the summer? Right now, the numbers are mixed. The chart below compares the number of properties that went under contract in May of 2014 to what went pending last year in May of 2013.

A comparison between the number of properties that went pending in May of 2013 and May of 2014

It looks like we might see an uptick in home sales. Home pending sales were up a whopping 27% over last May. While condo numbers appear to be continuing their recent drop in activity with a 21% drop in pendings. Land pending sales were down 55% compared to last May. I did a little digging behind that number and some of that difference can be traced to a solid number of commercial land listings that went under contract last May. Commercial and residential land are lumped together in our MLS. It will be interesting to see what happens with activity as we move into the summer months. It is safe to say that Maui is experiencing an unpredictable market.

What does this all mean for buyers and sellers? Buyers will find that prices are still below peak market levels in all but a very few neighborhoods around the island. That said, buyers will also find that we have seen significant appreciation from the bottom particularly at the lower price points of the market. Those that are expecting to find rock bottom deals will be challenged by the limited inventory and the smaller number of distressed and bank owned properties. Buyers should expect that well priced properties will go under contract quickly. If it is in a particularly desirable part of the market, those properties may attract multiple bids. Sellers should expect improving market conditions, but those that are swinging for the fences on their prices may be disappointed. Overpriced properties are sitting. There are also some communities and price points that are softer than others. Go to market pricing strategies should take into account recent sales prices and activity levels. Contact The Maui Real Estate Team for a free consultation to discuss the specific market conditions for the communities and price ranges that fit interests and budget. We welcome the opportunity to be of assistance.

Pete Jalbert

Maui Real Estate Blog

Wailea and Makena Market Report: 2013 Year in Review and 2014 Outlook

Earlier this winter, I decided to do some in depth market reviews on a handful of communities around the island. I was able to publish posts on Paia and Spreckelsville, before getting sidetracked. I have wanted to take on the resort markets of Wailea and Makena for quite some time. This is a post that has been sitting in some form of a draft for the better part of the month. A busy schedule as a Realtor and a new dad, combined with the breadth of this market has made it tough to put the finishing touches on this post. Today, I finally got over the hump.

The Wailea and Makena resort communities are home to some of the more expensive real estate on island. Homeowners are drawn by the weather, the incredible beaches, shopping, dining, resort amenities and golf courses. In this post, we wanted to compare 2013 sales to what we saw in 2012. We also want to provide a few thoughts on what you might expect for the rest of 2014 in the Wailea and Makena market. Since we are almost to the end of the first quarter of 2014, we have the advantage of being able to review some of the initial sales data for the year. Without further ado, here are the numbers for Wailea and Makena in 2013.

A comparison of real estate sales volumes in Wailea and Makena during 2013 and 2012

There were 27 homes sold in the Wailea area with a median price of $2,750,000 during 2013. There were 26 homes sold during 2012 with a median price of $1,387,500. That is roughly a 4% increase in sales volume and a 98% increase in median price.

During 2013, there were 123 condos sold in the Wailea area with a median price of $1,100,000. The 2012 numbers were 114 condos sold with a median price of $757,500. That is approximately an 8% increase in sales volume and a 45% increase in median price.

During 2013, there were 13 lots sold with a median price of $1,225,000. There were 5 lots sold during 2012 with a median price of $875,000. That is a 260% increase in sales volume and 40% increase in median price.

In addition to the numbers above, here are a few other numbers that I thought were worth sharing regarding the Wailea and Makena Real Estate market during 2013.

  • Of the 27 homes sold, six were in the Makena area.
  • The high sale was $9,200,000 for an oceanfront home at Makena Place.
  • The Makena Place transaction was one of 14 sales over $2,0000,000. It was one of 7 sales over $5,000,000. In 2012, there were 8 sales over $2,000,000 with 3 sales over $5,000,000.
  • There were only 2 homes sold for under $1,000,0000 in Wailea during 2013. That is way down from the seven sold under $1,000,000 in 2012.
  • The high condo sale was $11,395,000 for a Villa at The Andaz Residences.
  • The Andaz close was one of 34 condo sales over $1,500,000 in 2012. That was an increase over the 27 sold for $1,500,000 or more in 2012.
  • Kai Malu and the Palms at Wailea were the condos that had the most sales activity with 23 sales and 16 sales respectively.
  • Only 3 of the 123 condos sold were in Makena. There was one unit sold in Na Hale O Makena and two units at Makena Surf.
  • There were only 2 condos sold in Wailea for less than $500,000 in 2013. That was down significantly from the 15 sold under $500,000 in 2012.
  • The high sale for land was $10,000,000 for 159 acres across the street from the ocean in Makena.
  • There were 5 bank owned sales (REO) in Wailea in 2013. That is a 50% reduction from the 10 that sold in 2012.

Looking at the Wailea and Makena sales data for 2013, the big jumps in median prices are arguably the most eye catching numbers. All too often the change in median prices can be misrepresented as a representation changes in property values. While it is safe to say there was some appreciation in Wailea, it is also pretty clear we didn’t see 98% increases in home values, 45% increases in condo values and 40% increases in land values. The big bumps in median come from a decrease in sales activity at the low end of the market and an increase in ultra luxury sales.

The inventory of homes under $1,000,000 and condos under $500,000 decreased sharply in 2013. Buyers searching for lower priced opportunities had options in places like Wailea Fairway Villas and Grand Champions. In 2013, inventory in both of those complexes decreased and prices increased. That pushed prices on all but two sales in those complexes above $500,000. The same trend was evident with Wailea Homes. In 2012, there were quite a few opportunities to get into the market below $1,000,000 in neighborhoods like Wailea Kai, Wailea Pualani and Wailea Kialoa. Those opportunities were far more limited in 2013 with only 2 home sales below $1,000,000.

While there were fewer bargain hunting opportunities, more buyers were willing to dish out a premium for Wailea and Makena Properties. There was a 26% increase in the number of condos sold over $1,500,000 and a 75% increase in the number of homes sold over $2,000,0000. This was part of an island wide increase in luxury sales activity. As we have postulated in other statistics posts on our blog, big years on the stock market tend to make for big years for luxury real estate sales on Maui.

Being that we are almost done with the first quarter, there is more opportunity to comment on current real estate market dynamics in Wailea and Makena. The chart below compares the number of properties sold this year as of March 17th with the number of properties sold last year through March 17th.

This chart compares the volume of real estate sales in Wailea and Makena for the year to date up until March 17th with the same period in 2013.

As you can see from the chart, the sales activity looks pretty similar to what we saw during the start of 2013. Home sales are up modestly by 2 transactions, condo sales are the same and land sales are off by 1 from last year’s pace. There were a few other things that I thought were worth sharing from year to date sales activity.

  • As mentioned previously, we saw a decrease in sales under $500,000 for condos and under $1,000,000 for homes in Wailea during 2013. That trend has continued into 2014. There have been no condo sales under $500,000 and no home sales under $1,000,000 to date. There are no homes listed or pending for less than $1,000,000. There are only two pending sales under $500,000 for condos with no active listings in that price range.
  • For the most part, the Wailea market is still trading for less than peak market prices. There is one exception though as Wailea Elua saw its two highest ever sales prices in the last couple of months.
  • The high home sale thus far this year was $9,300,000 for an oceanfront home in Makena Place. As of March 17th, that was one of 4 home sales to date this year over $2,000,000 in Wailea and Makena.
  • The high condo sale thus far this year is $4,450,000 at Wailea Point. As of March 17th, that was one of 9 condo sales over $1,500,000 in Wailea and Makena for the year to date.

What can we expect for the rest of the year in Wailea and Makena? Demand thus far appears to be close to what we saw last year. I would anticipate that to continue if the stock market and overall economy stay the course. We have seen a decrease in Canadian luxury home buyers with the Canadian Dollar off 10% from last year. That has the potential to decrease sales volume. With the exception of lower priced homes and condos, there appears to be a pretty healthy inventory for buyers to choose from. There is over a year of active inventory for homes and land. There is just under a year of active inventory for condos, but that inventory is likely to increase. New developments are likely to have some of the biggest impact on the market. We have seen two new development go to market thus far, with at least one more and possibly three more coming to market before the end of 2014.

The first new development to hit the market was small in listings and big in price tag. Makena Sunset will consist of four condominium homes located directly across the street from Maluaka Beach. The homes will be 4 bedrooms and 4 bathrooms with approximately 4,200 square feet of living space. There will also be an additional 1,400 square feet of lanai space. Each residence has its own private pool. There is a laundry list of additional amenities offered with each of these spectacular properties. One of the four listings is under contract. The remaining three properties are offered for $10,250,000 through Makena Wailea Real Estate. The Maui Real Estate Team may represent interested parties as their buyer’s agents.

The second new development to come to market this year was the Ridge at Wailea. This is a vacant land offering with homes sites up near the Hotel Wailea. Pricing ranges from $1,550,000 to $2,800,000 for the 9 lots that are roughly a half acre in size. This development is being represented by Wailea Realty. The Maui Real Estate Team can represent interested parties as their buyer’s agent. It will be interesting to see how well this development is received by the market. The last land offering in this range was the Bluffs at Wailea. That development came out during the market doldrums of the last real estate downturn and was not well received by buyers. That land is now going to be developed as condos (more on that below).

There is the possibility of one additional land offering hitting the market this year. A second phase of Wailea Golf Estates is planned and that would include 16 additional luxury home sites. The time frame to go to market has yet to be announced.

There is at least one condo development that should hit the market this year as well. Keala O Wailea will consist of 70 condos spread over 7 three story buildings. It will be built next to the Wailea Gateway Center at the site of the aforementioned Bluffs at Wailea. The 70 condos will include 4 floor plans ranging in size from 1196 square feet to 1510 square feet. The top floor penthouse suites will be the largest units. The Keala O Wailea will prohibit vacation rentals. The community will have a nice pool area and should have big views from that location. Pricing for the development has not been announced, but it has been suggested that the prices will be “affordable for Wailea.” To be clear, that doesn’t mean affordable housing by any standard definition, but we should see starting prices under $1,000,000. Additional information on the development and sales reservations should be coming some time around the middle of this year. As with any new development on Maui, it is not out of the realm that those dates could be pushed back. If the pricing holds true to what has been insinuated, I would expect Keala O Wailea will receive strong interest from buyers.

Makali’i at Wailea is a condominium development that is scheduled to be built across from the Fairmont Kea Lani Hotel in Wailea. This complex is supposed to go to market in the last quarter of 2014 with construction planned to start in 2015 and run through 2017. Preliminary plans for Makali’i call for 68 units spread over 17 buildings of four units each. The condos will feature a modern design with a lot of glass. I saw the preliminary sketches for the condos and they will be very unique from the current inventory in Wailea. It is expected that there will be two and three bedroom floor plans with roughly 1,500 to 1,700 square feet of living space. The condos should have excellent views. The community will have a pool and club house area for residents. Makali’i will also prohibit vacation rentals. I haven’t heard anything regarding the pricing for the condos, but I would expect that they will be at a higher price point than anything at Keala O Wailea.

The impact of the new developments on the Wailea and Makena markets will be interesting to watch. I have found that activity at new developments may mean slower activity at comparable existing condos. I would think places like Kanani Wailea, higher priced units at Wailea Fairway Villas and potentially Kai Malu could be impacted by a place like Keala O Wailea. We may see an overall decrease in sales volume as the new condo developments will be unlikely to see units close until construction is complete.

Contact The Maui Real Estate Team if you are interested in buying or selling property in the Wailea and Makena area. The Maui Real Estate Team would welcome the opportunity to sit down for a free consultation. You can also search the current inventory of Makena and Wailea Condos for Sale and Makena and Wailea Homes for Sale on MauiRealEstate.com.

Pete Jalbert

Maui Real Estate Blog

Wailea and Makena Mid Year Real Estate Market Update

We may be almost midway through August, but I wanted to follow through on our promise to provide midyear market updates for a hand full of Maui communities. Today, we are going to cast the spotlight on the resort communities of Wailea and Makena. This corner of Maui is a a world renowned resort travel destination. Wailea and Makena are synonymous with stunning beaches, great golf, fine dining, luxurious resorts and high end shopping. All of these amenities combine to make Wailea and Makena desirable locales for second home owners. The following is a comparison of the sales numbers between the first half of 2012 and 2011 for the Wailea and Makena luxury markets.

This chart compares the Wailea and Makena Real Estate Sales volumes for the first six months of 2011 and 2012.

There were 17 home sales reported in Wailea/Makena with a median sales price of $1,635,000 during the first six months of 2012. During the same period of 2011, those totals were 10 sales with a median price of $1,472,500. That is a 70% increase in volume and an 11% increase in median prices. There were 58 condos sold in Wailea with a median price of $780,000 during January through June of 2012. The numbers for the first half of 2011 were 65 condos sold with a median price of $975,000. That is a 17 percent drop in volume and a 20% drop in median price. There was only one land sale in Wailea/Makena during the first six months of 2012. There were two during the first six months of 2011.

Here are some other noteworthy numbers for the first half of 2012.

  • There were three home sales in Makena during the first six months of 2012. By comparison, there were no sales in Makena during the first six months of 2011. On the other side of the coin, there were no condo sales in Makena during the first six months of 2012. There were four Makena condo sales in the first six months of 2011.
  • The high sale during the first six months of 2012 was $9,850,000 for a 4,155 square foot home oceanfront home in Makena Place. The high in the first six months of 2011 was $5,200,000 for a 5,967 square foot home in Wailea Golf Vistas.
  • The highest priced condo transaction in Wailea for the first half of 2012 was $5,992,000 for a 2,983 square foot unit at Wailea Beach Villas. The high condo sale in the first half of 2011 was $12,500,000 for a front row unit at Wailea Beach Villas.
  • The lowest priced home sale during the first six months of 2012 was $775,000 for a bank owned home in Wailea Pualani. The lowest priced home sale in the first half of 2011 was $900,000 for a home in Wailea Kai.
  • The lowest priced condo sale during the first six months of 2012 was $400,000 for a two bed/two bath unit at Grand Champions. Last year, the low priced sale was $360,000 for a one bedroom, bank owned unit in Wailea Ekahi.
  • There were a total of six REO sales and one short sale in all of Wailea and Makena during the first half of 2012. The numbers were eight REO sales and eight successful short sales in all of Wailea and Makena during the first half of 2011.

The most striking element of the Wailea and Makena numbers was the divergence in market performance between homes and condos. While activity was clearly up for home sales, the numbers trended down for the condo market. I can’t say there is a clear cut reason for the difference in activity. That being said, I have a few thoughts. Looking at the home side of the equation, the bump may be a case of buyers responding to values. At our broker Billy’s suggestion, I looked at original asking price vs. sales prices for homes in Wailea. Looking at the five highest priced sales, the difference between original asking price and sales price was 10%, 15%, 53%, 28% and 20% respectively. The 10% number difference between original list price and sales price on the Makena Place sale may actually be a little low. This home had been on and off the market without selling dating back to 2007. Back then, it was priced as high as $14,900,000. While I can’t say this unequivocally, it appears that buyers responded to these properties in part because of a perception of value. An increase in well priced properties may well be the driver for the increase in activity.

I think this is something worth noting for luxury sellers. There is still a pretty healthy luxury inventory on the market. The buyers like Peter Thiel are more an exception than a rule. Luxury buyers are showing that they are value conscious in this market. Motivated sellers may want to take heed and position their home so that it stands out as a value among the rest of the inventory.

The reasons for the decrease in activity in the luxury condo market are a little murky. In my search for answers, I compared the sales volume of individual condo complexes in the Wailea and Makena area. You can see this comparison in the chart below.

A comparison of sales volumes at the different condo complexes of Wailea and Makena during the first half of 2011 and 2012

There was one thing that stood out the most while looking at this chart. There appears to be a sharper decline in activity on the high end of the condo market. Among the places that saw sharper declines in activity, Wailea Palms is the only complex with a median less than $1,000,000. Other complexes with more notable declines included Papali, Wailea Beach Villas, Hoolei, Wailea Point, Makena Surf and Na Hale O Makena. All of these complexes are condos with median prices over $1,000,000 and in some cases well over $2,000,000. I looked back at all of the sales and my suspicions appear to be supported. There were 30 sales over $1,500,000 during the first six months of last year. This year that number shrank to 15 sales. What’s driving a high end condo slow down in Wailea and Makena? That’s tough to say. The decline in volume at Papali and Hoolei may stem from a decrease in inventory. These are new developments that have sold all but a few of the original developer listings. There is only one new developer listing remaining at Papali and the majority of the twelve listings at Hoolei are resales. With the rest of the luxury market, lack of inventory isn’t driving the decline in activity. There are an additional 39 condos on the market over $1,500,000. If these sellers are serious about selling, they may want to take a page from the book of Wailea luxury home sellers and start to sharpen their pencils.

The land market in Wailea and Makena remains limited. The one sale this year was for a property in Makena with upside development potential. There are fourteen vacant lots listed currently. Two of the fourteen are under contract. Looking at this inventory, many of these lots are resales. I can’t see a lot of activity in this market segment unless more of these listings become values in the eyes of buyers.

Contact The Maui Real Estate Team if you have questions or would like assistance buying or selling Wailea and Makena Properties. Search MauiRealEstate.com for the current inventory of Makena and Wailea Condos for Sale. You can also peruse the current inventory of Makena and Wailea Homes for Sale.

Pete Jalbert