Maui Real Estate Blog

Kapalua September 2014 Midyear Real Estate Market Report

The Kapalua Real Estate market has had a tumultuous last five years. The real estate downturn battered the Kapalua Resort’s parent company Maui Land and Pineapple. The financial difficulties and eventual foreclosure of the Ritz Carlton Residences was perhaps the biggest symbol of the recent struggles of the resort. All of that said, the Kapalua Real Estate market showed signs of life in 2013 and the Ritz Carlton Residences are under new ownership and management. The relaunch of the Residences under the Montage brand has brought a buzz back to Kapalua. While Montage brings the buzz, Kapalua wasn’t exactly going to seed. This remains one of the more beautiful resort communities on the planet with renowned golf courses and some of the prettiest beaches in the country. This post takes a look at the state of the Kapalua market for 2014. We compare how the market performed compared to 2013.We take an even deeper dive into recent market history with some of the condo complexes. We also give our thoughts on what some of the numbers mean and the current state of the Kapalua Real Estate Market.

Kapalua Condos

When comparing the first eight months of 2014 to the first eight of 2013, the Kapalua Condo market has seen a modest decrease in sales activity. There have been 22 condo sales to date this year vs 24 in the same period last year. There are seven different condominium communities within the Kapalua Resort. The difference in sales between those communities year to year has been more substantial.

This chart compares the sales volume at the seven different condominium communities of Kapalua during January through August of 2013 and 2014.

With the differences in sales volume, I thought it might be worth delving into the market dynamics at a number of the seven different condo communities.

The Montage Residences at Kapalua Bay
Montage has grabbed the most headlines of the Kapalua Condo communities this year. The project was previously known as the Ritz Carlton Residences on Kapalua Bay. It came to market in 2009. Developer sales at the upscale condo complex were shut down in 2011 as the development faced headwinds in a more difficult real estate market. While the property has always been impressive, so were constructions costs. Coming to market in the doldrums of the real estate downturn was too tall of a task. The property was foreclosed on in early 2013. Lantern Capital, the new owners, subsequently appointed Montage Hotel and Resorts to manage the property. Montage is a well established luxury brand with a loyal following thanks to communities in Deer Park, Beverly Hills and Laguna Beach. Prior to coming back to market, significant improvements were made to what was already arguably the nicest physical plant of any condo community on island. Among the improvements was the opening of a new restaurant and bar Cane and Canoe. It has been receiving rave reviews since it opened.

One of the Pools at The Montage Residences at Kapalua Bay

The combination of the Montage brand, the beautiful property and the five star service create a package that has been very well received since the property came back to market in June. There have been five developer sales and one resale over the last few months. This is particularly impressive considering the price points that are involved. The lowest priced sale was $4,300,000 while the highest sale was $8,250,000. The high sale was the highest priced condo sale in Kapalua history. The second and third highest priced sales in Kapalua history also occurred at Montage over the last couple of months. There was one other thing that I found to be notable among the sales that have occurred. Four of the Montage buyers were represented by Wailea based agents. While Wailea and Kapalua are both world class resort communities, they each have their own distinctive feel. You seldom have buyers torn between the two communities. The buyers tend to gravitate toward one community over another. While the agents in our office are location agnostic, you tend to see more agents who focus on one of those communities instead of both. It says something about the compelling nature of the The Montage Residences at Kapalua that you are seeing Wailea based agents, and presumably Wailea type buyers making the trek up the coast to Kapalua.

At this time, there are two additional Montage Kapalua condos that are currently under contract with five others units listed. They will slowly release the remaining developer condos out on to the MLS as other units are sold. We anticipate that this luxury development will remain a popular offering for Maui Luxury condo buyers for some time to come.

Coconut Grove and The Ironwoods
I thought it was worth touching on these properties as they formerly had the distinction of being Kapalua’s most upscale condominium developments. One might think that the introduction of Montage into the market might have an adverse effect on both of these condos. I am not so sure that will be the case. It could be argued that Montage will be a complimentary rather than a competitive offering. All three condominiums have their own diverse personalities, locations and physical plants. Coconut Grove offers a lower density complex with an incredible location right on Kapalua Beach. The Ironwoods are also lower density and have their own beautiful setting nestled between Oneloa Beach and the fifth hole of the Kapalua Bay Course. The Ironwoods are also available at a lower price point than either Montage or Coconut Grove. Both the Ironwoods and Coconut Grove are different from Montage in that they prohibit vacation rentals. Neither condo complex tends to see a high volume of real estate transactions in any one year. It will likely take a few years before we get a better sense of how those properties continue to be received by the market with Montage available as another options for Ultra Luxury Condo buyers.

Beautiful Oneloa Beach in Kapalua

Kapalua Golf Villas
The condo complex that saw the sharpest decrease in sales activity when comparing this year to last year is Kapalua Golf Villas. I would argue that the decreased activity may be a reflection of the a strengthening situation at Golf Villas rather than a weaker market. To understand my reasoning, it is worth taking some time to look at the history of the complex. Aside from the former Ritz residences, it is safe to say that Golf Villas has seen more upheaval over the last few years than any other condo complex in Kapalua. The challenges stemmed from a large assessment that was imposed on the condos. When crews began work re-roofing the condos in the fall of 2011, they started to uncover some much larger maintenance issues that needed to be addressed immediately. Each of the condo owners were required to pay a special assessment over a 24 month period. The assessment ranged from an extra $700 to well over $1,200 a month depending on the size of the floor plan. Within a couple of months of the assessment being announced, there was a flood of inventory that hit the market. The numbers below provide some interesting context for the market dynamics over the last four years.

  • In 2011, there were 11 sales at Kapalua Golf Villas and the median sales price was $510,000. The low sales price for the year was $425,000. It was November of 2011 when the need for a special assessment was announced.
  • In 2012, there were 25 sales with a median price of $480,000. The low sale was $330,000. That was one of five sales during 2012 below $400,000 at Kapalua Golf Villas.
  • In 2013, the sales volume at Kapalua Golf Villas dipped to 11 sales, but the median rose dramatically to $650,000. The low sale price was $489,000.
  • In 2014, there have 5 condos sold year to date with a median price of $710,000. The low sale was $645,000.

The flood of inventory that hit the market in late 2011 and 2012 forced some sellers at Kapalua Golf Villas to slash prices. It was clear there were owners that didn’t want to pay or couldn’t afford to pay the new assesment. As a result, you saw those five exceptionally low sales prices. The scope of work covered by the assessment was comprehensive and suggests that the heavy lifting for the maintenance should be covered for some time. The high volume of sales suggests that there were quite a few buyers who saw the upside in the improvements and the long term potential. By the beginning of 2013, the pool of discounted condos at Golf Villas was largely gone and prices began began to recover quickly. You can see that reflected in the significant increase in median prices. By 2014, sales volumes have slowed even further. Sellers have been trying to push the envelope at Golf Villas on pricing. As it stands, the low sale for this year is just $5,000 below last year’s median. This should make for lower sales volume and lower potential for appreciation the rest of the year.

The Ridge at Kapalua
The Ridge at Kapalua hasn’t seen the same tumult that was experienced at Golf Villas, but there have been some similarities in recent market dynamics. In 2011, sales at the Ridge were slow with only 3 transactions recorded. In 2012, we saw some more motivated sellers as well as a few bank owned properties hitting the market. That contributed to a stronger year for sales with a total of 14 transactions recorded. Buyers were able to take advantage of some lower priced opportunities, and we even saw some Bank owned sales in the $400s. In 2013, the lower priced inventory was gone and we started to see stronger appreciation. That said, it was interesting to note that the progression wasn’t linear. The first half of the year saw only one transaction, the second half of the year had 12 sales. Buyers appeared reticent to support the higher prices at the first half of 2013, but the barrier was broken as the comparative value of the Ridge was recognized. Well maintained grounds, beautiful views and a good location compared to comparable priced properties helped drive buyers into the market. For 2014, sales volumes have slowed and the rate of appreciation has begun to slow as well. Buyers seem to be putting a premium on quality over the lower priced units. The 2 one bedroom units that have closed have been very high quality condos in the $800s, while 2 of the 3 two bedroom units have been priced in the $1,400,000 range. I suspect we will continue to see a focus on quality for the remainder of the year.

Kapalua Bay Villas
When looking at the year to year sales, Kapalua Bay Villas has seen the same number of sales to date this year as it did over the same period last year. That isn’t necessarily a good thing in light of current inventory. There are currently 24 active listings at Bay Villas with one condo under contract. Bay Villas has had pretty extensive inventory for the last few years. I would anticipate that the depth of inventory will significantly limit the potential for appreciation. Sellers will need to listen to market feedback and adjust pricing if we are going to see any significant increase in sales volumes.

Overall, the Kapalua Condo market seems to be transitioning from a period where a good portion of the transactions were value driven. After seeing significant appreciation at condos like Golf Villas and the Ridge over the last couple of years, the opportunity for bargain hunting is limited. It is safe to say that the surge of activity at Montage is not bargain hunting. More buyers are seeking quality above all else. There is plenty of quality to choose from among the active listings. You can check out the current inventory of Kapalua Condos for Sale at MauiRealEstate.com.

Kapalua Homes

The Kapalua Home market has not been as robust as the condo market for the year to date. There have been five sales thus far with a median sales price of $3,250,000. By comparison, last year there had been nine sales by this point in time at a median price of $3,500,000. There are a few things that I thought were noteworthy about this year’s closes.

  • The five sales included one close in Honolua Ridge, two closes in Pineapple Hill and two more sales at Pineapple Hill Estates.
  • The Honolua Ridge close was a bank owned property. This neighborhood was just coming to market towards the tail end of the last real estate boom. As a result, there have been quite a few distressed sales.
  • The bank owned property was the lowest priced sale at $1,700,000. This was the only home sale under $3,000,000 in Kapalua this year.
  • The high sale was $4,700,000 for Carlos Santana’s home in Pineapple Hill. That home has 7,687 square feet of living space.

Island wide, home sales over $2,000,000 are up 32% compared to last year. It is interesting that Kapalua sales activity has dropped in light of the island wide increase in high end sales. That said, the relatively small sample size of Kapalua sales makes me reticent to read too much into the drop in activity. One thing that I can say is that there have been fewer opportunities for owners looking for bargains. Over the previous two years, a number of the homes that have changed hands have been value purchases priced at the very low end of the various Kapalua neighborhoods. This year there was just the one sale under $2,000,000. There has also just been one other listing priced below $2,500,000. The smaller pool of purchases this year appear to be skewed more towards buyers seeking quality homes that fit their needs.

Moving forward for the rest of the year, Kapalua still has a significant inventory of homes available with 24 active listings. Based on the current pace of sales, that would suggest that there are at least a couple of years worth of inventory still available. While conventional wisdom indicates that more than six months of inventory can lead to price decreases, that isn’t as applicable to a market like Kapalua. Kapalua and other high dollar markets typically have much longer days on market. It is not uncommon for some of the highest priced properties to sit for years. The sellers of these homes are typically high net worth individuals with the staying power to hold on to the property long enough to wait for offers that fit their needs. There may be one or two sellers among the active listings who are motivated; the challenge lies in identifying those sellers. While values are unlikely to fall at this point, the depth of inventory should blunt any movement to push prices upward. You can see the full inventory of Kapalua Homes for Sale at MauiRealEstate.com.

Kapalua Land

The land market on Maui hasn’t seen a ton of transactions as of late. When you look at a smaller community like Kapalua, the number of transactions shrinks even further. There have been three land transactions in Kapalua this year. One sale was located in the Plantation Estates subdivision. The other two were in the Honolua Ridge area of Plantation Estates. That total is lower than the five sales that we saw last year as of this time. There are a total of nine active listings currently. They are spread amongst all of the residential communities including Plantation Estates, Pineapple Hill, Pineapple Hill Estates and Honolua Ridge. Plantation Estates and Honolua Ridge offer acreage for potential buyers with some lots in Honolua Ridge in excess of 20 acres.

Kapalua Long Range Outlook

There is much to like about Kapalua property over the long term. The resort seems to have weathered the storm of the last real estate downturn and is positioned to grow as a destination. Montage will help to draw new visitors to the resort community. Some of those visitors may find themselves compelled to own their own slice of paradise in Kapalua. Some of those will snatch up some of the remaining new developer inventory at Montage, while others may opt to look at one of the nearby condos, one of the residential neighborhoods or identify a lot to build a dream home. The natural environment, beaches, golf and other amenities make Kapalua as a whole offer a world class destination resort and make for a compelling place to own a home. Contact The Maui Real Estate Team if Kapalua appeals to you. We would welcome the chance to speak with you about the various properties available for sale around the resort. There may be one that fits you!

Pete Jalbert

Maui Real Estate Blog

Sneak Peek at the April 2014 Maui Real Estate Stats

I begin this post with a humble apology. Last month was the first time that we have failed to provide some version of the monthly Maui Real Estate stats since 2008. For those that have come to expect this place to be the first resource to go for getting a pulse on the Maui market, I apologize for letting you down. If you didn’t see last month’s stats via another media outlet, here is a link to the Realtor Association of Maui March Stats. I will try to redeem myself with an expanded post that includes a cornucopia of Maui market numbers. April is a month of transition in Maui. It is the end of whale season, peak tourism season and peak real estate season. The real estate sales figures are typically pretty strong as we see lots of closes from properties that went under contract earlier in peak buyer season. Keep reading to see the April sales volume and median numbers, a few interesting numbers and tidbits from among this month’s closes, a broader look at the first four months of the year, some forecasting as to what we may see for sales in the coming months and a few other thoughts on the Maui market. Without further ado, here are the numbers.

This table compares the real estate sales volume for Maui County during April of 2014 and April of 2013.
This chart compares Maui County real estate sales volumes in April of 2013 and April of 2014

By my count, there were 84 home sales reported in April with a median sales price of $583,000. By comparison, last April there were 79 home sales with a median price of $470,000. That is a 6% increase in sales volume over last April and a 24% increase in median.

There have been 134 condo sales reported for April with a median price of $403,500. There were 144 sales reported last year with a median price of $370,000. That is a 7% decrease in sales activity and a 9% increase in median prices.

There have been 19 land sales reported to date for April of 2014 with a median sales price of $510,000. Last April, there were 14 sales reported with a median price of $479,500. That is a 35% increase in sales volume and a 6% increase in price when comparing this April to last April.

These are preliminary numbers, we may see some additional sales reported from the end of the month in the next couple of days. While compiling the numbers above, I found a few other numbers that I thought were worth sharing.

  • The highest priced home sale in May was a beautiful estate in the Makena Papa’anui subdivision located just above Makena Landing. The home with stunning ocean views and infinity pool closed for $6,850,000.
  • That was one of six sales over $2,000,000 in April. There was one other sale in Makena Papa’anui, three sales in The Pineapple Hill Neighborhood of Kapalua and one Oceanfront home in Haiku.
  • The highest priced condo transaction for the month was located at the Honua Kai Resort. One of the premier three bedroom units in the complex closed for $5,200,000.
  • This was one of six condos that closed for $1,500,000 or higher in April. There was one other sale at Honua Kai along with sales at Kai Malu, Hoolei, Wailea Beach Villas and Ka’anapali Ali’i.
  • There were only 9 bank owned (REO) closes last month. In April of 2013, there were 13 REO sales. This remains a pretty limited market segment and it seems as if a good number of the REOs that enter the market are being priced fairly high by the banks. With a limited inventory of lower priced homes, banks are trying to get more money for their assets.
  • There were 10 successful short sale transactions this April compared to 15 in April of 2013. While I expect the slow drip of bank owned properties to continue, I suspect we may see the number of short sales continue to shrink under current market conditions. Better equity conditions for sellers and stiffer tax liabilities for owner occupants who complete short sales are going to reduce the impact of this type of sale.

This months stats were almost directly the inverse of last month’s stats and the overall trends for the year. Home and land sales were higher in April of 2014 than they were in April of 2013. Condo sales were down compared to last April. Overall for the year, we have seen higher condo sales while both land and home sales have been lower. I wouldn’t read too much into one month’s trends as we are likely just seeing some of the variability we tend to see with Maui’s smaller sample size of transactions.

As we tend to point out in our stats posts, it is important not to paint with too broad of a brush in Maui. Sales activity varied by community and price point around the island. Some communities are seeing more activity than last year. Some are seeing less than last year, and some are seeing almost the same. Here are some of the markets that are seeing some of the biggest differences in sales activity between this year and last year.

  • Haiku residential sales are down 21% (four units) compared to the first four months of 2013. That reduction can be attributed entirely to a decrease in inventory and activity at or below the median with four fewer sales below $600,000.
  • Pukalani has seen a 43% decrease in residential activity compared to the first third of 2013. This appears to be another community where reduced inventory is impacting sales. There were far fewer sales in Pukalani under $500,000 this year compared to the first four months of last year.
  • Wailuku sales are down 16% (7 units) compared to the first four months of 2013. This was also driven in part by a decrease in inventory and sales below $500,000.
  • Makawao residential sales are up 55% (6 units) compared to last year. This surge was based on an increase in activity at higher price points. There were 7 more sales over $500,000 compared to the same time last year.
  • Kapalua sales are up 150% (3 units) compared to the first 4 months of last year. This is a pretty small sample size which makes the number a little more dramatic.
  • Kihei condo sales are up 22% (30 units) over the first four months of last year. This increases has occurred despite a pretty sharp drop in inventory below $200,000. The biggest increase in sales activity occurred between $250,000 and $500,000 with more modest gains above $500,000.
  • Condos in the West Maui Communities of Napili, Honokowai and Kahana were up 19% (11 units) over the first part of 2013. This community was somewhat anomalous in that there were more gains at lowest price points rather than the middle and higher price points.
  • Wailea saw the biggest dip in condo sales with a 22% (9 units) decrease in sales volume compared to the first four months of 2013. With a couple of new developments on the horizon in Wailea, we may be seeing some buyers deferring purchases as they wait for opportunities to purchase new construction condos.

I also thought it was worth looking at changes in sales activity by price points during the first four months of the year.

  • Home sales under $500,000 were down 26% (36 units) compared to the first 4 months of 2013. This is a clear case of decreasing inventory impacting volume.
  • Home sales from $500,001 to $999,999 were up by 2.8% (3 units) compared to first third of 2013.
  • Home sales were up 54% (22 units) in the $1,000,000 and up price range. The high end market appears as if it is continuing to gain steam after a relatively strong 2013.
  • Condo sales priced $250,000 and under were down 21% (22 units). This is a case of shrinking inventory.
  • Condos priced between $250,001 and $499,999 are up 28% (49 units). This is due to a combination of appreciation in the market and a general increase in activity.
  • Condo activity between $500,000 and $999,999 was up modestly at 9% (9 units).
  • Condo sales between $1,000,000 and $1,499,999 was up 22% (6 units).
  • Condo sales from $1,500,000 and above were up 45% (9 units). This is pretty impressive as this market segment was up significantly in 2013 over 2012.

The numbers above would seem to indicate that recent market activity is being dictated in part by available inventory. The only part of the market that is seeing less activity is the part that has seen inventories decrease the most in the last year. There are buyers looking at lower price points, but they aren’t finding the properties that they want. The increase in activity at the higher price points also accounts for some of the increases we are seeing in median prices. It is a combination of price increases and more high priced transactions that are causing the jumps in medians. Don’t mistake increases in medians as a true reflection of increases in values.

While sales are a reflection or recent market demand, the number of properties under contract better illustrates current market demand. As we have been moving out of peak buyer season, the total number of pending properties has been dropping steadily. This is a little different than what we have seen in the last few years when the momentum of peak season carried into May. The chart below compares the number of homes, condos and parcels of land that went under contract in April with the number that went under contract in April of 2013.

This chart compares the number of Maui Properties that were put under contract with buyers during April of 2014 with the number that went under contract with buyers in April of 2013.

The numbers show a pretty sharp dip in both homes and condos. It will be worth keeping a close eye on May pending sales to see if we are seeing something of a trend or if this month is just an anomaly.

What does all of this mean for buyers and sellers? Buyer and seller strategy is going to be dictated in part by community and price point. That said, there are a few statements applicable to all geographies. Entry level buyers are going to find a limited inventory and competitive market. Getting pre-approved for financing is a must prior to starting your search. When you find a property that you like that is well priced, decisive and fast action is typically necessary. Some of the higher price points in the market offer a broader range of inventory, but seller motivation tends to go down. Buyers may find that the staying power of luxury home owners can undercut their leverage even in markets with lots of inventory. Sellers who need to sell in quick fashion will need to look closely at recent comparable sales and the level of market activity around their price point. Over priced properties are sitting in this market. Current market conditions can be challenging for both buyers and sellers. The Maui Real Estate Team would welcome the chance to sit down for a free consultation to discuss your real estate needs and how we might be able to help you navigate the market. Contact the Maui Real Estate Team today to get started.

Pete Jalbert

Maui Real Estate Blog

Unofficial November 2012 Maui Real Estate Statistics

It’s the most wonderful time of the year according to Andy Williams. I can’t argue with Andy. December is off to a beautiful start on Maui with sunny skies, calm winds, glassy waves, more whale sightings and clear views of Haleakala and the West Maui Mountains. That also means November is done and it is time for me to crunch some numbers and come up with our unofficial November Maui Real Estate Statistics. November was another surprisingly busy month for island real estate. While the fall months are typically the slowest for real estate activity, that hasn’t been the case this year. Here are the numbers I came up with after looking through the sales data followed by some context and analysis of the current Maui Real Estate market conditions.

A Comparison of Real Estate Sales volumes during November 2011 and November 2012 for Maui County, Hawaii
A comparison of real estate sales volumes for Maui County during November 2011 and November 2012

By my count, there were 83 homes sold this November at a median price of $470,000. Last November, there were 76 homes sold at a median price of $422,500. That calculates to a 9% increase in volume and a 13% increase in median prices when comparing the two Novembers.

There have been 96 condos reported sold this November at a median price of $390,945. By comparison, 77 condos were reported sold last November at a median price of $265,000. That is a 25% increase in volume and a 48% increase in median prices between this November and last November.

I counted 22 land sales in Maui county during November of 2012 with a median price of $455,000. By comparison, there were 9 land sales during November 2011 with a median sales price of $505,000. That calculates to a 244% increase in sales volume and a 10% decrease in median prices.

There were quite a few other numbers that I thought were worth sharing from my research compiling these statistics.

  • There were 21 bank owned sales last month. Most of those sales were single family homes, but surprisingly 9 of the 21 were land sales. By comparison, there were 39 bank owned sales in November of 2011. That is a 54% drop in bank owned sales. The lower number of bank owned sales should be a continuing trend with limited numbers of bank owned properties coming on the market.
  • There were 24 short sales that closed successfully last month compared to 22 sales that closed in November of 2011. We are continuing to see a steady supply of short sale closes as banks are working more proactively with homeowners who are delinquent with their mortgage payments.
  • The highest sale for the month was over on the Island of Lanai. A buyer paid $4,150,000 for a 5,227 square foot ocean view home in the Manele Bay area of the island. I will have a little more on Lanai’s market in the discussion below. Last November, the high sale was $3,000,000 for a home in the Pineapple Hill area of Kapalua.
  • There were two homes sold over $2,000,000 in Maui County including the one on Lanai. There were 10 condos sold in Maui County over $1,500,000 this November. By comparison, the November 2011 numbers were 2 homes sold and 4 condos sold above those respective price points.
  • Buyer activity remained strong with 249 properties going under contract during the month of November. This means November 2012 trumped October 2012 for the title of busiest month for new escrows this year. This is actually one of the busiest months in several years. As discussed in Part II of our Unofficial October Stats, this increased activity is a reflection of a shift in the market.

There are quite a few things worthy of discussion in this month’s Maui statistics. First things first, I want to provide a little context on some of these stats. The increase in condo medians is a number that jumps off the screen. This is a dangerous stat that is easy to misinterpret. To be clear, condo values on Maui have not increased by 48%. This is a classic case of medians changing due to big shifts in sales activity at different price ranges. In November 2011, there were ten sales under $100,000. This November, there was only one sale under $100,000. Shrinking inventory at the lowest price ranges combined with modest price increases translates to far fewer sales below $100,000. Conversely, there was an increase in luxury condo sales this month with ten sales over $1,500,000. That compares to four sales over $1,500,000. More high end sales and less low end activity means a bump in median value regardless of what is going on with property values. While there have been some price increases between this year and last in segments of the Maui condo market, those increases in value have been far less than 48%.

The land market is another place that produced eye catching numbers with a 244% increase in sales volume. It is important to keep in mind that part of the reason for the dramatic increase can be attributed to the low number of sales in November 2011. There are some other factors in play as well. We have seen a few small spikes in land market activity over the last couple of years. Most of the spikes could be attributed to buyers responding to values in the market. There were a total of nine bank owned sales in the land market last month, and it can be argued that each of these sales were good comparative values. If the market stays true to recent form, we might expect to see land sales volume dip again next month. That being said, there is a part of me that wonders if we might see more sustained activity in the land market in the coming months. With inventory shrinking on the home market, there may be more buyers looking for alternatives in the land inventory.

As noted above, the high sale of the month for Maui County occurred on the Island of Lanai. In addition to that home sale, three of the ten condo sales over $1,500,000 were in the Manele Bay area of Lanai. When it was announced that Larry Ellison had purchased the island of Lanai, I speculated that there may be an uptick in the Lanai second home market. It appears that this may be coming to fruition and there is something of a Larry effect in play. In the first six months of the year, there was only a single close over $1,000,000. After Mr. Ellison’s purchase, there have been five sales over $1,000,000. Overall, there were 14 properties sold in the first six months before the Ellison announcement, there have been 18 closes in the five months after the announcement with a healthy volume of properties under contract.

The Island of Lanai as seen from Maui

So what is the big picture on Maui? As it stands, it is clear that our slow season has been anything but slow. We are in a period of heightened buyer activity. Limited inventory, low interest rates and improved consumer confidence have stoked the fires of the market and resulted in increased sales volumes. The tighter inventory and increased demand has also resulted in some modest price increases in a lot of different market segments. Homes and condos priced at or below the median sales price are more likely to have seen some upward price pressure. With December marking the start of our peak tourism and real estate seasons, it would appear that the dynamics are in place for a continuation of current trends. In other words, we should see more sales and modest price increases. That being said, there is a pretty big caveat. While it is likely that inventories will remain relatively tight, consumer demand could shift with any economic challenges. With fiscal cliff negotiations still outstanding, there is an air of uncertainty in the economy.

What does that mean for buyers and sellers? If we see a continuation of current conditions, buyers should expect a competitive landscape. Well priced properties will often attract multiple offers. Over asking sales prices are common. Buyers that require financing should absolutely get pre-approved with a lender prior to looking at properties. That will give you a better sense of your budget, and a pre-approval letter is a big help when competing against other buyers. Many sellers are asking for pre-approval letters with offers. Sellers will find an interesting market place. Well priced, well maintained properties are selling quickly. Overpriced properties are languishing with little interest. Sellers should look closely at recent comparable sales when determining go to market pricing. This type of market demands professional, experienced representation. Contact The Maui Real Estate Team for assistance buying or selling Maui Real Estate.

Pete Jalbert

Maui Real Estate Blog

Kapalua 2011 Midyear Real Estate Statistics

This is the last of a series of posts on midyear statistics for selected Maui communities. I have previously posted on the North Shore, Upcountry, Wailea/Makena and Ka’anapali markets. Last but not least, we are going to take a look at how the Kapalua market performed for the first half of 2011. Included below is information on overall sales volumes, medians, individual condo developments, high sales prices, low sales prices and a few other tidbits of data I dug up along the way. I followed the stats with a few thoughts on the numbers.

A comparison of 2010 and 2011 midyear sales volumes for Kapalua Resort

There were a total of 7 home sales in Kapalua during the first half of 2011 at a median price of $2,200,000. That compares to 4 sales during the first half of 2010. The median price for sales during that period was $3,450,000. That’s a 75% increase in activity and a 36% decrease in median.

  • The highest sale in the first half of 2011 was $14,000,000 for an 11,399 square foot home on 2.48 acres in Plantation Estates. This was a new sales record for Kapalua.
  • The low sale for the year was $1,562,000 for a home in Pineapple Hill. That is the lowest sales price for a home in Kapalua since the year 2000. The one caveat being that the home sold this year was significantly smaller than the 2000 sale.
  • All of the homes being purchased show as cash transactions on the MLS.
  • The breakdown of home sales by subdivision was five closes in Pineapple Hill and two in Plantation Estates

A comparison of 2010 and 2011 midyear sales volumes for the different condo complexes of the Kapalua Resort

There were 11 condo sales in Kapalua during the first 6 months of 2011 at a median price of $830,000. There were 14 condos sold in 2010 at a median of $895,000. That represents a 21 % drop in volume and a 7 % drop in median when comparing 2010 to 2011.

  • The high sale or more accurately sales for the first six months of 2011 were $3,300,000. There were two units sold at that price at the Ritz-Carlton Residences on Kapalua Bay. Both were based on long term pre-construction contracts.
  • The low sale was $425,000 for a unit at Kapalua Golf Villas
  • There was one short sale and one bank owned sale among the eleven closes
  • Eight of the sales were cash, two used conventional financing and one was purchased with owner financing.

During the first half of 2011, there were four lots sold in Kapalua at a median price of $975,000. Needless to say, we outperformed the 2010 market when there were no land transactions recorded by midyear.

  • The high sales price was $1,050,000 for a lot in Plantation Estates.
  • The low sales price was $630,000 for a lot in Pineapple Hill.
  • All of the land purchases were cash transactions.

Looking at the numbers above, the first half of 2011 was positive overall, but there were some mixed signals in the market. Looking at the home market, there are some signs of improvement over last year. There is a clear increase in sales volume. We also saw a new record high sale. In addition to the record sale, there was another substantial sale at $9,600,000. Conversely, one sale at Pineapple Hill was the lowest priced single family home to close in Kapalua since the year 2000. It appears as if the Kapalua market is in line with the Wailea and Makena market in that we are seeing continued price decreases on a majority of properties. That being said, as with the Wailea and Makena market, there are some premier properties where the buyers are willing to pay an absolute premium.

The land market for Kapalua saw limited sales with four transactions, but that is a clear improvement over the complete absence of sales during the first half of 2010. The other thing to note on Kapalua’s land market is that the inventory is lower than the other Maui resort communities. Land sales for Maui in general have been very slow for almost four years. In that time frame, the island has compiled a surplus inventory that could take as long as 6 years to absorb based on recent sales volumes. The Kapalua market on the other hand has less than two years of inventory to be absorbed. Barring a drop in demand or a big influx of supply, this market may stabilize faster than other land markets.

The condo market was the one segment of Kapalua that clearly did not perform as well during the first half of 2011. Sales volume was down vs. the first half of 2010. Median prices were also down. While I think some of the drop in median can be attributed to decreases in values, there were also a few more million dollar plus sales last year which pushed the medium up. That being said, It looks likely that we are going to need to see some additional price adjustments in the Kapalua Condo Market to entice buyers. While other communities have been thinning condo inventory, Kapalua still has a substantial stock of condos for sale in light of the area’s average monthly sales volumes.

Contact the Maui Real Estate Team if you have any questions on these statistics or if you have interest in buying or selling property in Kapalua. You can search the entire inventory of Kapalua Homes for Sale and Kapalua Condos for Sale on MauiRealEstate.com.

Pete Jalbert