Last week, we took a look at how the Spreckeslville Real Estate market performed in 2013 and gave a few thoughts on the outlook for 2014. Today, I wanted to take a look at the neighboring North Shore community of Paia. Paia and Spreckelsville share the same zip code and are technically the same town. That said, each community has its own character. Paia is a town pretty unique to the planet. Once the bustling epicenter of Maui’s sugar industry, it was later discovered by Hippies in the 60s and 70s, windsurfers in the 80s and a more diverse cross section of water sports enthusiasts in the 90s and beyond. For a town of its size, it has a diverse population drawn from all corners of the world. Paia boasts great restaurants, appealing boutiques, galleries, beaches and the best little health food store on the planet. It is also the location where the Maui Real Estate Team office is located.

The map below shows all of the 2013 home sales from the Paia area. We included all transactions in and around downtown Paia, up Baldwin Avenue to the Skill Village neighborhood and East on Hana Highway into Kuau.

This map shows all of the current home inventory in the Paia area. Green pins represent active listings. Yellow pins represent pending sales.

Here are the numbers that I thought were noteworthy for the Paia property market in 2013.

• There were 20 homes sold in the Paia area during 2013. The median sales price for Paia during 2013 was $678,500. By comparison, there were 18 sales in Paia during 2012 with a median price of $367,500. That is an 11% increase in sales and an 87% increase in median prices.
• The high sale for the Paia area was $5,500,000 for a modest home on 1.1 oceanfront acres. The home is a likely tear down and the value was in the land. This is one of the premier oceanfront parcels in the Paia area and the third largest parcel in the Paia/Spreckelsville area. This was the third highest sale ever for a property in the Paia/Spreckelsville area.
• The second highest sale was $4,600,000 for a home across the street from the beach on Kuau Beach place. This was a substantial property with over 2 acres of land, a pool, and multiple structures including a primary residence of almost 5,300 square feet. This was the highest priced non-oceanfront sale ever in the Paia/ Spreckselsville area.
• There were three condo sales during 2013 at Kuau Plaza. There was only one condo sale at Kuau Plaza during 2012.
• There were four land sales in 2013 in Paia. In 2012, there was only one sale.
• The land sales included a $2,300,000 sale for an oceanfront lot on Kuau Point. This 18,875 square foot lot had an ideal west/northwest orientation.
• There were two commercial properties that sold in Paia during 2013 and one of the four lots sold was a commercial lot downtown. Paia had one commercial sale in 2012.
• There was one property bought directly from an asset management company and one short sale in 2013. There were three bank owned properties (REO) and four short sales that closed in Paia during 2012.

There were a couple things in the numbers above that merit additional discussion. First and foremost, the difference in median sales price for Paia homes really jumps off the page. To be clear up front, the 87% increase in median price over 2012 does not mean that there was an 87% increase in home values. The drastic shift in median prices can be attributed to two factors. First, there was a big shift in the distribution of sales. There were nine sales under $400,000 in 2012 compared to four sales in 2013. There was a lot more lower priced inventory during 2012. A fair amount of that lower priced inventory consisted of either REO listings or potential short sales. There were also fewer high end sales in 2012 with only one property that sold for over 1 million compared to 3 million dollar plus sales in 2013. The second factor was an increase in overall values. Part of the reason that we saw fewer lower priced sales was due to appreciation. The appreciation wasn’t just limited to the bottom of the market. You can make an argument that you saw solid increases in value at all price points of the market in Paia.

Two Paia neighborhoods saw prices near or above previous peak market prices. In 2013, the Kuau Bayview neighborhood had homes sell for the first, second and fifth highest ever sales prices. A fourth home sold for the second ever highest cost per square foot. The Skill Village neighborhood had the highest ever cost per square foot sale. You could also argue that the two highest priced transactions in Paia were at or near peak market prices. It is tough to quantify the absolute rates of appreciation though with the relative heterogeneity of Paia homes. Regardless of the percentage increase, Paia was the only community on island where we saw sales prices at or near peak market prices. The Paia market rebound has been driven by its lack of new supply combined with increasing demand due to its growing recognition as a desirable community to live and call a second home.

The desirability of Paia is also reflected in its increasing popularity for luxury home buyers. While two sales in one year over $4,000,000 doesn’t seem like a lot compared to traditional Maui resort markets like Kapalua or Wailea, there were only three sales prior to 2013 for more than $4,000,000. The land sale of $2,300,000 was another ultra luxury purchase. Neighboring Spreckelsville also had two sales around the $3,000,000 mark and four properties that went under contract in the last two months of 2013 priced $4,000,000 or above. More ultra luxury home buyers have been attracted to the North Shore lifestyle whether it be wellness or water sports. Regardless, Paia is becoming a community of understated affluence.

What can we expect for 2014? With the home market, I would not count on seeing similar rates of appreciation to what we saw in 2013. During the last boom cycle, we saw varying rates of appreciation within any one year that eventually evened out over longer periods. Hot neighborhoods would cool when the comparative value with neighboring communities became too far out of line. Those neighboring communities would then see their values increase before we started to see a return to more substantive appreciation in the hot neighborhoods. I think we may well see that in Paia during 2014. While Paia’s limited supply may lend itself to greater appreciation in the long term, it doesn’t seem like prices will really bust through the roof this year. Interest rates are another factor worth watching. As it stands, rates have the potential to go up with the cut backs to quantitative easing. A more significant bump in rates has the potential to dampen appreciation.

The luxury home market tends to be a little less interest rate driven. The one external economic factor that could impact the Paia luxury home market is the stock market. In our 2013 Maui market overview, I surmised that the luxury real estate market for Maui received a bump thanks to a strong year for stock markets. Better stock returns mean more discretionary income and more funds available for luxury home purchases. Global stock markets have recently been in a sell off based on mixed economic news.

If the stock market shakes off its stupor, the conditions are favorable in Paia for more luxury home sales. There is no oceanfront inventory in Spreckelsville which could shift more market attention towards Paia. As mentioned before, we are seeing more luxury home buyers in the Paia area of late due to the allure of the North Shore lifestyle. The question then becomes whether or not we can come to a meeting of the minds between luxury home buyers and sellers. Some of the current Paia luxury listings are pushing the envelope on pricing. While oceanfront home buyers may be very affluent, they still appreciate value.

The condo and land market will see limited activity largely due to limited inventory. There are no active land listings in Paia at this time. For that matter, there isn’t a whole lot of vacant land period. There are a handful of lots in the community that have not been developed. There are only two condo listings at Kuau Plaza. This complex saw three sales in the first half of 2013 and it went quiet the rest of the year. It appears as if sellers may have overshot the market with their pricing. During 2013, one bedrooms sold in the low 200s and two bedrooms were selling in the high 200s. The current inventory of one bedrooms are listed at $300,000 and $289,900 respectively. It will be interesting to see if the lack of other home options in Paia attracts buyers at those price points or if sellers will need to adjust their prices to find the market.

You can see all of the current Paia Real Estate listings on MauiRealEstate.com. Contact the Maui Real Estate Team with questions on the Paia market or the local community. Paia is our backyard. We know it well.

This is the third post in our series of articles looking at the Maui Real Estate market midway through the year. We have already published a midyear Maui Real Estate market update and a Haiku Market update. Today, we are taking a glance at the Paia real estate market. Paia is situated on the North Shore of the island and is known throughout the world as a mecca of wind and water sports. Athletes from all over the world are drawn to the combination of wind and waves that make this a premier destination for windsurfing, kiteboarding, stand up paddling, surfing and big wave surfing. You don’t have to be a big wave rider to enjoy Paia Town. The town has a bohemian vibe, great shopping, good Yoga facilities, very good restaurants, natural beauty, the best little heath food store on the planet, proximity to good schools and a better sense of community than the resort areas on the island.

The Paia Real Estate market consists of three geographic areas. Going from West to East, the Spreckelsville Neighborhood runs from right next to the airport all the way to Baldwin Beach. It is home to the Maui Country Club and three main beaches. The community is an ideal gateway for the beach lifestyle with a good walking beach, windsurfing, kiting, surfing, body boarding and SUP. Many residents own golf carts so they can bring all their toys down to the beach. Real estate options include executive homes near and on the golf course, two acre compounds with beach access, beachfront estates and the North Shore’s only luxury condominiums. Heading further east, you get to Paia town proper. Paia town is an eclectic mix of older plantation homes, 1970s and 1980s vintage entry level homes, newer town homes in North Shore Village and a smattering of beach and oceanfront homes. As you head past Paia town towards Mama’s Fish House, you get to the Kuau area. Kuau includes the neighborhood of Kuau Bayview, an interesting mix of homes on the Mauka (Mountain Side) of Hana Highway and more high end homes along the Makai (ocean) side of Hana Highway.

The numbers below include information on sales volumes and median sales prices in the Paia area for the first six months of the year. I also included some other noteworthy numbers I came across along the way while compiling these stats. These are followed by a look at how the sales broke down by price point, the current state of the market and what we might expect for the rest of 2013.

During the first six months of 2013, realtors reported 14 home sales in Paia with a median price of $678,500. During the first half of 2012, there were sixteen sales reported with a median price of $457,500. That is a 12.5% drop in sales volume and a 48% increase in median price.

There were three condo sales reported in Paia during the first six months of 2013. There was only one condo sale during the first half of 2012.

There were three land sales reported in Paia during the first half of 2013. No land sales were reported in Paia during the first six months of 2012.

While compiling the numbers above, I came upon a number of other facts and figures about the Paia Market during the first half of 2013 that I thought were worth sharing.

• The highest sale in Paia for the first half of the year was $5,500,000 for an older home on almost an acre of oceanfront land. My understanding is that this was more of a land purchase than a home sale as the buyer intends to tear down the existing older homes on the property and build a larger estate home.
• There was one other sale over $1,000,000 during this time frame and it was another big deal. An estate property across the street from Tavares Bay sold for $4,600,000.
• In addition to the home sales, there was one other big land sale in Paia to start the year. An 18,875 square foot lot right on Tavares Bay sold for $2,300,000.
• Kuau Bayview was the busiest neighborhood in the Paia area with four total closes. It also saw the strongest signs of price appreciation with a new all time high sales price and a couple of other sales notable for their high price considering location and/or home size.
• On the other end of the spectrum, Spreckelsville saw no sales during the first half of the year. Anecdotal evidence would suggest this might be a case of variability verses the neighborhood falling out of favor. I know of a couple of listings that had heavy showing activity and received offers.
• If there was one number that really grabbed me, it was that six of the fourteen sales were properties that were not listed on the MLS. Buyers were doing some digging to find properties with the inventory of homes on the market under $1,000,000 limited.
• There weren’t many distressed sellers on the market in 2013. There was only one short sale that was completed and there were no bank owned sales during the first six months of 2013.

It was an interesting first half of the year for the Paia market. At first blush, the decrease in home sales might suggest diminished demand. That being said, I think the case can be made that it wasn’t demand that was lacking as much as quality inventory. We can see that by the number of homes that were sold that were unlisted. Buyers had to scrounge for unlisted properties under $1,000,000 to meet their needs. Pricing was a mixed bag. Properties under $1,000,000 saw varying levels of upward price pressure depending on the neighborhood. Skill Village saw modest appreciation despite limited inventory. North Shore Village sales are infrequent, but the most recent sales were well over the last sale in 2011. Kuau Bayview saw signs of significant appreciation. A new record sales price was established. There was also the second highest sale on a cost per square foot basis and the highest sale for a home abutting Hana Highway.

The luxury market was a little less clear cut than entry and middle levels of the Paia market. The two big sales were both noteworthy. The high sale was the third highest sale in Paia history. It is particularly notable in that the home is a tear down. The buyers paid a healthy sum for arguably the best piece of land in the Kuau area. The second highest sale of the first six months of 2013 was the highest ever sales price for a non-oceanfront home. Beyond that luxury home sales were relatively quiet particularly in the $1,000,000-$2,000,000 range. I don’t think this was due to a lack of interest as much as it was just the variability in the market and the inability of sellers and buyers to find a common sales price.

The land and condo market both saw upticks in activity during the first half of 2013. After seeing little interest for at least a year, Kuau Plaza started to garner interest from the market place in the second half of 2012 and we saw three sales in the first half of 2013. There is never a whole lot of activity in the Paia land market. The reason being that there is very little vacant land in the community. Three sales is pretty busy for a six month span by Paia standards.

Looking at the current inventory of Paia Real Estate listings, the inventory options under $1,000,000 remain pretty limited. The chart below shows the distribution of properties by price point. The Blue Bars represent sales during the first half of the year and give some sense of market demand. The green bars represent pending and contingent listings. The red bars represent active listings.

The map below gives a sense of the geographic distribution of recent sales, current pending sales and active listings. The map also includes land and condo listings. Clicking on the individual pins on the map will bring up property details. If you click on the link below the map, it will bring it up as a separate page with additional detail on the all of the properties on the map.

View Paia Real Estate Sales 2013 in a larger map

As it stands, there is a pretty good inventory of homes to choose from in the higher price ranges while the options under $1,000,000 remain limited with only three active listings in the Skill Village neighborhood. Of note, two of the skill village listings are listed for near peak market prices. While Kuau Bayview has seen that type of price increase, we haven’t seen as strong a demand for Skill Village to date. With so little inventory available, it will be interesting to watch the market feedback for these properties.

Now that we have a better sense of what is available in the current market, I wanted to give my thoughts on what me might expect for the Paia market for the rest of 2013 via the video commentary below.

Contact The Maui Real Estate Team with questions or for additional information. Paia is where our office is located and it also happens to be the home of three members of the Maui Real Estate Team. We know the community like it is our backyard. We would welcome the opportunity to sit down with potential Paia buyers and sellers for a free consultation. You can find all of the current active Paia Real Estate Listings and Spreckelsville Real Estate Listings on MauiRealEstate.com.

In the third installment of our community market reports, I wanted to take a look at how the Paia market performed in 2012. By comparing last year’s sales to the current inventory, we also hope to provide some thoughts on the outlook for the 2013 Paia Real Estate Market. Paia is a North Shore community known for its access to water sports and bohemian vibe. Kama’aina and second home owners also love the great restaurants and shops. The town is gaining in national recognition with everything from New York Times articles on art galleries to Coastal Living’s recent selection of Paia as one of the ten happiest seaside towns in America. When talking about the Paia Real Estate market, we are including Paia and the associated communities of Spreckelsville and Kuau. We did a market report on Spreckelsville already, but we are also including the Spreckelsville data in this Paia report. During 2012, we saw modest improvements in the Paia market with a few more closes over what we saw in 2011. One might argue that we may have seen more closes if there was more quality inventory available. The lack of inventory in Paia clearly represents a challenge for the 2013 as well.

There were 29 homes sold in Paia during 2012 at a median price of $580,000. By comparison the 2011 sales totals were 26 home sales with a median price of $597,000. That means that there was a 12% increase in sales volume and a 3% decrease in median prices.

There was one condo sold at Kuau Plaza in 2012. That was a two bedroom unit that closed for $260,000. There were no condo sales in Paia during 2011. It was an off market sale (the condo was not listed on the MLS, however a Realtor assisted) and the unit was a 3rd floor unit with some upgrades.

There were two vacant lots sold in the Paia area during 2012. That is a slight uptick from 2011 when there was only one sale of vacant land. Overall there is a general scarcity of vacant land in Paia.

Here are a few other notes about the Paia market in 2012.

• There were three bank owned homes that closed in Paia in 2012. That is down from the five that closed in 2011.
• There were four short sale closes in 2012. That is equal to the 2011 numbers for Short Sale activity.
• The high sale in the Paia area was $2,520,000 for a beachfront home in Spreckelsville. This was the only oceanfront sale in the Paia area in 2012.
• There were six sales over $1,500,000 in the Paia area this year. One was in Kuau and the rest were in Spreckelsville.

There were signs of a recuperating Paia Real Estate market in 2012. The uptick in sales volume was modest, but this is also a relatively small market. As I mentioned in the first paragraph of this post, I would argue that a lack of inventory curtailed the growth of the market more than anything else. While I have no quantitative evidence to support this assertion, here are the two main reasons why I think the market could have absorbed additional inventory. 1. Well priced properties in Paia were generating bidding wars. 2. Buyers were digging hard to find unlisted opportunities. There were six sales of unlisted properties during the second half of 2012.

While there was some healthy activity over $1,000,000, the ultra luxury market was comparatively quiet. There were eight properties listed over $2,500,000 with only one that went under contract. That is in line with the overall market trends on island which saw a down year for luxury home and condo sales.

What does 2013 hold in store for the Paia Real Estate Market? Inventory is going to play a big part in the current market. If you look at the chart below, I compared the current inventory of active homes for sale in Paia vs. the 2012 sales. The chart does not include pending sales.

There is a relative shortage of properties in almost all price ranges under $1,000,000. There are very few entry level homes on the market and there is even less in the middle. There are no active Kuau Bayview listings, but there are two listings and one unlisted property currently under contract in that neighborhood. One of the listings under contract was priced well above recent comparable sales. Any new inventory in Kuau Bayview or North Shore Village would be well received in the market place. The relative scarcity of properties at the low end and the middle is likely to generate some upward price pressure in Paia. The one million to two million price range has a decent balance of inventory. There appears to be enough supply to meet the typical demand of buyers in this price segment. That being said, this was a segment of the market that had strong activity in the second half of 2012 with many buyers seeking out unlisted properties. The biggest selection of properties for buyers is above $2,500,000. While this was a quiet segment for activity in 2012, there are signs of life in this part of the market already this year. There are currently two properties priced over $5,000,000 in Paia that have gone under contract (pending sales) for the first of the year. While it will be hard for the market to come close to sustaining that pace, it sets the stage for a stronger 2013 in the Paia Luxury market.

The condo and land markets will always be relatively quiet due to limited inventory. There is only one active land listing in Spreckelsville at this time. The Paia and the Kuau area just don’t have much left in terms of vacant land. For Paia condo buyers, there are a couple of listings at Kuau Plaza currently. I would suspect those may get more interest with the lack of low end housing inventory and overall interest in Paia. The only other condo complex in the Paia area is Sugar Cove. This luxury beachfront complex tends to have limited inventory due to low turnover.

If you are interested in this great North Shore community, you can check out the current inventory of Paia Real Estate Listings. We also have a page specifically for Spreckelsville Real Estate Listings. We would also welcome the opportunity to discuss your needs and the community directly. Our office is located in Paia and three of our agents call the area home. We know it well and are happy to answer questions about the community. Contact The Maui Real Estate Team to schedule an appointment.