Tag: Paradise Ridge Estates
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 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.
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Maui Market Musings Volume XIX
It’s been a few weeks since our last Maui Market Musings. With that in mind, this post delves into the numbers that help cast a light on current Maui market conditions. Since our last post, interests rates surged higher again putting additional pressure on affordability for some buyers. This post looks at what impacts if any higher rates are having on the Maui market. We also look at current inventory levels by price point and community. Other subjects for discussion include cancellations, price reductions and the recent market response to new listings. This is a longer read so you may want to grab your favorite caffeinated beverage before proceeding further. It is not advisable to operate heavy equipment after reading.
It’s hard not to lead with interest rates when discussing the state of the market. Rates continued their climb since our last update. While they fluctuate daily, they’ve been somewhere between 6.5% and just over 7% over the last few weeks. Needless, to say, we are a long way from the sub 3% interest rates we saw during periods of 2021. For those hoping that this increase is going to be short lived, the recent comments of Fed Chair Jerome Powell suggest that is unlikely to be the case. Powell said higher rates are needed to bring about a “correction” and balance to the housing market. While the Fed doesn’t directly control mortgage rates, they can exert a strong influence with changes to the Federal Funds rate.
Higher rates (even rates lower than current rates) were already impacting real estate markets around the country. Values are starting to retreat in many markets, particularly in some of the frothiest markets of the last couple of years.
So what kind of impact are we seeing on Maui from higher rates? There are a couple of numbers that we look at in this musings that might reflect the impact of higher rates. Pending sales is one with decreased affordability likely to impact the number of buyers. Price decreases is another metric that would or should reflect sellers adjusting to decreased buyer demand. Keep reading to see what those numbers look like recently on Maui.
Maui Home Inventory
|<$750,000||11||14||11||11||7 (-4)||14 (+3)|
|$750,000-$999,999||25||62||31||44||21 (-10)||46 (+2)|
|$1,000,000-$1,499,999||65||34||58||28||45 (-13)||33 (+5)|
|$1,500,000-$1,999,999||41||19||46||13||44 (-2)||17 (+4)|
|$5,000,000-$9,999,999||24||7||26||5||27 (+1)||6 (+1)|
|$20,000,000+||5||1||5||0||2 (-3)||1 (+1)|
|Totals||239||156||256||124||225 (-31)||140 (+16)|
|Hana||4||1||8||2||9 (+1)||1 (-1)|
|Kahului||13||21||11||25||7 (-4)||26 (+1)|
|Kula||19||16||24||10||22 (-2)||11 (+1)|
|Lahaina||18||14||23||7||21 (-2)||10 (+3)|
|Napili/Kahana/Hono…||10||6||14||4||9 (-5)||7 (+3)|
|Pukalani||7||6||8||5||6 (-2)||7 (+2)|
|Spreckelsville/Paia||10||2||15||3||10 (-5)||4 (+1)|
|Wailea/Makena||15||5||16||4||10 (-6)||8 (+4)|
|Wailuku||39||35||41||22||36 (-5)||26 (+4)|
End of September 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 with the most activity.
- The inventory of active homes fell 12.2% between the last day of August and the last day of September.
- Active inventory decreased in all price ranges below $3,000,000. There was a modest increase in inventory between $3,000,000 and $10,000,000, no change between $10,000,000 and $19,999,999, and a decrease in inventory above $20,000,000.
- Pending sales activity increased 12.9% over last month! This is a surprising reverse of recent trends. It is an especially big surprise with the recent mortgage rate increases.
- The biggest increase in pending sales occurred below $2,000,000. Above that price range the number of pending sales was either steady or increased by one. No price ranges experienced a decrease in pending sales activity. It is worth noting that the $10,000,000 to $19,999,999 range had no pending sales as of the end of August and still has no pending sales.
- Looking at the different communities around the island, only two communities saw an increase in inventory. Haiku and Hana both saw modest increases in active listings. Anecdotally, it seems like some sellers in these windward communities try to get homes on to the market before the start of the rainy season later in the fall. I haven’t taken the plunge to determine if there is any quantitative evidence to support that claim.
- After seeing big growth in inventory in late Spring and early Summer, Kihei saw the biggest decrease in active inventory for the second month in a row. Notably, the total number of pending sales in Kihei did not change. With that in mind, I decided to look a little closer at the Kihei market activity. While Kihei added 8 new pending sales this month, 7 sales closed, 8 listings cancelled and 2 expired. Only 4 new listings came to market. Based on those numbers, the reason for the decrease in inventory is multi-faceted. The cancellations could be a sign of seller capitulation (more on that below) or just sellers taking a break. We shall see.
- Wailea and Wailuku are the two communities that saw the biggest increase in pending sales with 4 net new pendings. Wailea’s increase is a little more notable due to the percentage increase in pending sales. It’s worth mentioning that 4 of the 5 overall new pending sales in Wailea and Makena reduced prices before going under contract. There’s something to be said for listening to market feedback and adjusting price.
Maui Condo Inventory
|$250,000-$499,999||11||23||14||17||11 (-3)||16 (-1)|
|$500,000-$749,999||43||39||34||43||28 (-6)||40 (-3)|
|$1,000,000-$1,499,999||30||31||29||31||19 (-10)||36 (+5)|
|$1,500,000-$1,999,999||30||33||24||35||18 (-6)||34 (-1)|
|$2,000,000-$2,999,999||20||36||22||38||14 (-8)||43 (+5)|
|$3,000,000-$4,999,999||12||18||12||19||10 (-2)||17 (-2)|
|$5,000,000-$9,999,999||10||3||8||1||7 (-1)||0 (-1)|
|Totals||205||234||181||233||145 (-36)||222 (-11)|
|Ka’anapali||24||13||25||16||17 (-8)||14 (-3)|
|Kapalua||10||10||11||6||10 (-1)||4 (-2)|
|Kihei||67||60||50||63||48 (-2)||61 (-2)|
|Lahaina||16||8||9||10||5 (-4)||7 (-3)|
|Ma’alaea||5||6||3||6||4 (+1)||4 (-2)|
|Napili/Kahana/Hono||40||34||45||25||29 (-16)||30 (+5)|
|Wailuku||14||13||9||14||8 (-1)||12 (-2)|
End of September 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, 41.89% of current pending sales are long term new developer contracts.
- The number of active condo listings at the end of September is 19.89% lower than at the end of August.
- Active inventory decreased in seven out of ten price ranges in the table above. Net inventory was unchanged in the remaining 3 ranges.
- Pending condo sales dropped 5.2% compared to the end of August. Is this a reflection of reduced inventory, reduced demand or both? It’s hard to say. That said, I did get a surprising number of e-mails last month from fellow Realtors seeking out condo inventory for buyers struggling to find what they want.
- Pending sales dropped in seven of ten price ranges. Pending sales increased between $1,000,000-$1,499,999 and $2,000,000 and $2,999,999.
- Ma’alaea is the only community where inventory increased last month albeit with just one more active listing than at the end of August. Kahului’s inventory is unchanged.
- Napili, Kahana and Honokowai experienced the biggest decrease in inventory with 16 fewer listings at the end of this month. It was also the only community where pending sales increased. The eighteen new pending sales shows pretty healthy activity. It seems that the increase in pending sales is the biggest driver for the decrease in active listings in this market, but cancelled listings were also a factor. Seven sellers pulled their listings off the market.
September is a transitional month on Maui. The summer tourism season is over and we are still a few months from our peak winter season. Anecdotally, I always thought of this as a month where some sellers will opt to take a pause from selling their home only to relist when it gets closer to winter tourism season. With the sharp decrease in active listings this month, I wanted to look closer at cancelled and expired listings. Is September actually a bigger month for cancellations historically? If so, how does this year compare to previous years? Is there anything that can be gleaned from this September’s high cancellations?
|September||40 (1)||28 (2)||39 (t6)||50 (1)||41 (11)|
|September||29 (1)||13 (11)||43 (t2)||44 (3)||41 (11)|
Before discussing the numbers above, it is worth noting that there is some noise when it comes to cancelled listings. An agent changing brokerages or one brokerage buying another can inflate cancelled listings. The change in brokerages results in cancelled listings immediately replaced by new listings as old listing contracts are cancelled and new contracts created. I noticed some noise in this month’s cancelled home listings. Hoku’ula, a new development Upcountry, cancelled their MLS listings last month and put them back on the market as new listings at a higher price.
With that framework, let’s address the first question that I posed above. Is September a bigger month historically for cancellations? It appears to be one of the biggest months for canceled home listings albeit with some notable exceptions in the chart above. For condos, it is a little more extreme. Some years it is near the top and others near the bottom with no clear cut reason for the variability.
So what does that say about this year? Even without those five Hoku’ula cancellations, September would still be the highest month for home cancellation for the year to date. September is also leading for cancelled condo listings despite rather limited inventory. It’s hard to say definitively if this is strictly seasonal or if any of those cancellations are due to seller capitulation. That said, it would make sense if we start to see some sellers retreat from the market for non-seasonal reasons. Sellers who were fishing for ultra high prices, don’t need to sell or need to borrow at higher rates to buy a new place could all have reason to pull their listing under current conditions.
Recent increases in interest rates are generating more price reductions nationally. Sellers are reacting to the decreased affordability posed by higher rates. What about the Maui market? Are we seeing similar trends? I looked at price reductions for active inventory on September 29th.
As of the 29th, 95 out of 224 active listings or 42.41% of all properties reduced their price one or more times. As of September 2nd, that numbers was 42.97%. On August 15th, it was 39.67%. While price reductions are up since the early summer, the more recent decrease in price reductions is somewhat surprising in light of the recent increases in rates.
On the condo front, 36 out of 144 active listings reduced their price one or more times. That calculates to 25% of active inventory. That is down from 27.84% on September 2nd and 29.62% of all listings on August 15th.
With inventory shrinking, perhaps sellers are feeling emboldened to stick to their guns on pricing. The higher level of cash and or low inventory levels seem to be making this market less responsive to interest rate changes thus far.
How Quickly Are New Listings Going Under Contract?
Another metric we continue to watch in the musings is how quickly things are going under contract. Specifically, what percentage of listings are going under contract within 10 days or less. We started tracking this in mid-February when the number was right around 56%. That was pretty much the peak of our winter frenzy. For properties that were listed between September 12th and 19th, 34% of all listings went under contract within 10 days. That is actually up from 29.79% between August 10th and 17th.
For home listings, 32.14% of new listings between September 12th and September 19th went under contract within 10 days or less. By comparison, 38.1% of all homes listed between 9/12/21 and 9/19/21 went under contract in 10 days or less. For a pre-covid comparison, 41.18% of all homes listed between 9/12/19 and 9/19/19 went under contract within 10 days or less. It is worth mentioning that 41% is a much higher percentage than other weeks we’ve looked at in 2019. For example, only 19.04% of homes listed between 9/27/2019 and 10/3/2019 went under contract in 10 days or less.
For condo listings, 36.36% of all new listings went under contract within 10 days between September 12th and 19th. Last year, an eye popping 67.74% of condos listed between 9/12 and 9/19 were under contract in ten days or less. In 2019, 27.27% of all condos listed between 9/12 and 9/19 went under contract within 10 days or less.
Overall, the market is way less frenzied than last year. However, properties are going under contract faster than in a “normal” Maui market. There are definitely fewer buyers, but there are enough buyers out there for the limited supply that over one third of the inventory is going under contract quickly.
A Few Closing Thoughts on the State of the Maui Market
The numbers compiled above paint a picture of a more resilient Maui market than one might expect. We actually saw fewer price reductions for homes and condos while pending home sales increased! Not exactly the market response one would predict when interest rates increase to their highest point in 15 or more years. It appears at this point that limited inventory is still having a significant impact on the market despite the rising borrowing costs.
Will that sustain itself through the rest of the year and into early 2023? I was suprised by this month so who knows what the future will hold. It’s likely that the market has yet to feel the full weight of higher interest rates. Add in signs of a slowing economy and our market is facing additional headwinds. Ultimately, the Maui market moving forward will be a balancing act between the impact of higher rates and supply constraints. Conditions well vary around Maui by both price point, location and property type.
With interest rates likely to remain elevated into the immediate future, more real estate economists are anticipating price corrections. Reading beyond the headlines, economists expect variability in market corrections across the country. Rates will be a market driver, as will the state of the economy and local inventory. It’s important not to base market decisions on national headlines, but instead on relevant local data. We plan to continue with our Musings and community market updates so Maui buyers and sellers have the data to make informed decisions.
A Little Maui Beauty to Brighten Your Day
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Questions about the post above? Wondering about conditions in a specific part of the Maui Market? Need assistance buying or selling a property on Maui? Contact The Maui Real Estate Team for assistance. One of our experienced and savvy agents would welcome the chance to sit down with you to discuss your real estate needs.
Maui Real Estate Blog
Maui Market Musings Volume XVII
This is our seventeenth Maui Market Musings. This edition continues to focus on the metrics that give us the best indication of current market conditions. Those three metrics are inventory, price reductions and how quickly properties are going under contract. Discretion was the better part of valor and I am going to hold off on my Kapalua market update for either the next musings or a stand alone post. I imagine people have more to do over the holiday weekend than reading a 3,500 word manuscript on the Maui Real Estate Market. Without further ado…
End of Month Inventory of Maui Single Family Homes
|$750,000-$999,999||32||63||25||62||31 (+6)||44 (-18)|
|$1,000,000-$1,499,999||43||37||65||34||58 (-7)||28 (-6)|
|$1,500,000-$1,999,999||44||22||41||19||46 (+5)||13 (-6)|
|$2,000,000-$2,999,999||34||15||31||19||36 (+5)||12 (-7)|
|$3,000,000-$4.999,999||27||10||25||9||32 (+7)||11 (+2)|
|$5,000,000-$9,999,999||23||8||24||7||26 (+2)||5 (-2)|
|Totals||241||169||239||156||256 (+17)||124 (-32)|
|Haiku||20||13||22||11||20 (-2)||7 (-4)|
|Hana||4||2||4||1||8 (+4)||2 (+1)|
|Kahului||8||27||13||21||11 (-2)||25 (+4)|
|Kihei||45||22||48||14||44 (-4)||16 (+2)|
|Kula||25||13||19||16||24 (+4)||10 (-6)|
|Lahaina||20||18||18||14||23 (+5)||7 (-7)|
|Makawao||13||12||14||9||15 (+1)||11 (+2)|
|Napili/Kahana/Hono…||12||3||10||6||14 (+4)||4 (-2)|
|Pukalani||12||7||7||6||8 (+1)||5 (-1)|
|Spreckelsville/Paia||11||2||10||2||15 (+5)||3 (+1)|
|Wailea/Makena||13||4||15||5||16 (+1)||4 (-1)|
|Wailuku||39||33||39||35||41 (+2)||22 (-13)|
End of August 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 with the most activity.
- The inventory of active home listings on Maui actually increased approximately 7% since the last day of July. This comes on the heels of a decrease in active listings in July.
- Active inventory decreased in only two price ranges.
- Pending sales dipped again. Pending listings are 21% lower than the end of July and 27% below the end of June.
- Pending sales increased in only the $3,000,000 to $4,999,999 price range.
- Looking at the different price ranges, the $750,000-$999,999 price point stands out. Through the market boom of the last couple of years, you could make an argument that this was among the most competitive price points. Needless to say, this is a very different market now. The increase in interest rates reduced affordability for local buyers, and many investors seem to be sitting on the sidelines. As of today, 56% of the active listings in the range reduced their asking price at least once. Sellers are needing to adjust their price to the new realities of the market.
- Looking at the different communities around the island, the month to month shifts in the trajectory of inventory are notable. A number of places where inventory increased between June and July, decreased between July and August and vice versa. I would suspect we might continue to see this pattern moving forward.
- Kihei home inventory is notable for it’s month to month decrease after steady and significant growth in active listings over the previous months.
- Resort market inventory saw limited changes in active inventory. Ka’anapali and Kapalua both have one fewer active listings while Wailea has one more.
End of August Maui Condo Inventory
|$250,000-$499,999||19||25||11||23||14 (+3)||17 (-6)|
|$500,000-$749,999||31||40||43||39||34 (-9)||43 (+4)|
|$1,500,000-$1,999,999||28||34||30||33||24 (-6)||35 (+2)|
|$2,000,000-$2,999,999||20||36||20||36||22 (+2)||38 (+2)|
|$5,000,000-$9,999,999||11||3||10||3||8 (-2)||1 (-2)|
|Totals||199||247||205||234||181 (-24)||233 (-1)|
|Ka’anapali||23||15||24||13||25 (+1)||16 (+3)|
|Kahului||4||3||2||8||3 (+1)||7 (-1)|
|Kapalua||12||9||10||10||11 (+1)||6 (-4)|
|Kihei||55||74||67||60||50 (-17)||63 (+3)|
|Lahaina||16||5||16||8||9 (-7)||10 (+2)|
|Napili/Kahana/Hono||48||34||40||34||45 (+5)||25 (-9)|
|Wailea||23||85||25||82||24 (-1)||86 (+4)|
|Wailuku||12||12||14||13||9 (-5)||14 (+1)|
End of August 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. Those should start closing in the not too distant future.
- After steadily increasing over the last few months, active condo listings at the end of August dropped 12% from the end of July.
- Pending condo sales were virtually unchanged with only one fewer pending sale at the end of August compared to the end of July.
- Looking at the data by price range, active inventory only increased between $250,000-$499,000 and between $2,000,000 and $2,999,999. The biggest drops in active inventory occurred between $500,000 and $999,999 followed by $1,500,000 to $1,999,999.
- Kihei continues to be one of the more dynamic communities when it comes to inventory. Much like Kihei Home inventory, Kihei Condo inventory dropped significantly since the end of July. That comes on the heels of seeing the largest increase over the months prior. Pendings increased as well. Without doing a really thorough comparison of the month to month inventory, it’s hard to say if this is variability or sellers adjusting their pricing and buyers responding.
- The Napili, Kahana and Honokowai condo inventory took the opposite trajectory from Kihei with pending sales dipping substantially and active listings increasing on the month.
- The change between the end of the month active inventory in the resort markets was nominal. Wailea’s active inventory increased by 1 and both Kapalua and Ka’anapali decreased by 1. Pendings increased in both Ka’anapali and Wailea while the Kapalua pending sales dipped.
One final thing worth noting about home and condo inventory, September 1 marks something of a seasonal shift on Maui. Labor day is the end of our summer tourist season. Traditionally, real estate activity on island slows a little in the early fall. This is a time when some sellers take a break from the market. Eleven home and condo listings either cancelled or expired on September 1 after the numbers for the charts above were compiled. We also tend to see a little less in the way of new inventory. One would think that would be the case this year, but there are fewer certainties in this day and age.
Checking in On Price Reductions
Nationally, there is some discussions of price reductions starting to level off after steady growth over the last few months? What about Maui? Looking at the inventory as of September 2nd, 42.97% of all active home listings reduced their price one or more times. On August 15th, 39.67% of active homes reduced their price. On July 4th, that number stood at 34.03%.
In the condo market, 27.84% of all active listings reduced their price. That is actually a decrease from 29.62% on August 15th. For further context, 24.63% of the active condo listings had a reduced asking price on July 4th.
It’s worth noting, that some parts of the market have more price reductions than other. There is a fair amount of variability in the market by district and price point. One example being homes in the $750,000-$999,999 price range which I mentioned earlier.
How Quickly Are Things Going Under Contract?
Another metric that gives a pretty good sense of current demand and market conditions is the rate at which properties go under contract. Specifically, we look at what percentage of properties go under contract in ten days or less. We started tracking this in February when market conditions were particularly frenzied. At the time, 56% of all properties went under contract within 10 days. Of the listings that came to market between August 10th and August 17th, 29.79% went under contract within 10 days. That’s actually up a little from the last period we tracked between July 25th and August 1st when 22.45% went under contract within 10 days or less of coming to market.
Looking specifically at homes, 30.43% of the new listings between August 10th and 17th went under contract in 10 days or less. For comparison’s sake, between August 10-17, 2021, 50% of new inventory went under contract in 10 days or less. For a pre-covid reference point, it was 15.15% of new home listings between August 10th – August 17th, 2019 . I do want to mention that this seems to be an anomalously low week. Other recent 2019 comparisons came in around 25%.
For condos, 29.17% of the new listings between August 10th and August 17th went under contract in ten days or less. During the same time span of 2021 and 2019 respectively, the numbers came in at 58.33% and 30.43%.
Overall, we are well below last year’s frenzy. While we may have fewer buyers and sellers, the overall absorption of new properties is similar to what we experienced before Covid.
One other variable relevant to market conditions is interest rates. Recent movement in the bond market pushed interest rates on the 30 year fixed mortgage back up over 6%. This is the first time mortgages hit that rate since June. From recent discussions with mortgage brokers, many borrowers are opting for 10 year ARMs to lower monthly payments. That said, regardless of the mortgage product borrowing costs are significantly higher now than they were 12 or even 6 months ago. That is going to have a big impact on affordability.
Some Musings Eye Candy From Maui’s Sandy Shores
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Questions, comments or feedback? Contact The Maui Real Estate Team to discuss the latest market musings or if you need assistance buying or selling Maui Real Estate. Our experienced team of agents is well suited to assist buyers and sellers in the current dynamic market conditions. We look forward to hearing from you and discussing your real estate needs.