Tag: The Ironwoods
Maui Real Estate Blog
Kapalua September 2022 Market Update
By some margin, 2021 was the busiest year ever for transaction volume at the Kapalua Resort. Now that we are two-thirds of the way through 2022, we thought it might be a good time to check on market activity in this resort community located on Maui’s northwest coastline. This update looks at sales volume, pricing and more. It also looks at the outlook for the rest of the year and a slightly more long range outlook as the market slowly transitions back to “normal”.
Kapalua Home Market Numbers
The numbers below represent notable numbers for year to date home sales activity in Kapalua through September 5th, 2022.
- Maui Realtors reported 12 home sales over the last eight plus months. That is 50% of the 24 sales reported during the same period of 2021, and 25% below the 16 sales during the same period of 2019.
- Limited inventory played a pretty big role in the decreased sales volume compared to last year. While reduced demand may also be a factor, that is harder to show via the statistics.
- Two out of the twelve sales closed for over asking price. An additional four sales closed for full price meaning 50% of the transactions closed for asking price or higher. It is striking that only one of the 24 homes sold in the first eight months of 2021 sold for over asking price and only 3 more sales closed for asking price or above. Back in 2019, none of the year to date sales sold for full price let alone asking price.
- Of the twelve transactions, Realtors reported that seven of the buyers paid cash.
- The median price of the homes sold in Kapalua this year is $5,025,000. That is 25.31% higher than median of $4,010,000 for homes sold during the same period of 2021. It is 105% higher than the median sales price of $2,450,000 during the same period of 2019.
- The average price of the homes sold in Kapalua this year is $5,300,000. That compares to $4,886,354 and $2,364,000 during the same periods of 2021 and 2019 respectively. That means this year’s average is 8.47% and 124.2% higher than 2021 and 2019 respectively.
- The lowest priced home to sell for the year to date in Kapalua closed for $2,750,000. The 3 bedroom, 3.5 bathroom home in Pineapple Hill with 3,670 square feet of living space is located on a 10,703 square foot lot.
- The highest price sale for the year to date closed in August. The Pineapple Hill home has 6 bedrooms, 6.5 bathrooms and 7,784 square feet of living space on just under a half acre of land.
- Pineapple Hill tops the list for busiest subdivision for sales activity this year. Five homes closed in Pineapple Hill with two additional homes closing in Pineapple Hill Estates. Three homes closed in Plantation Estates and two homes closed in Mahana Estates. There’s been no inventory and no sales in Kapalua Place. There is one pending sale in Honolua Ridge.
Kapalua Condo Market Numbers
The numbers below are the most notable from Kapalua Condo sales through September 5th. It includes only condos in the complexes that are formerly located within the Kapalua resort and does not include condo developments that border Kapalua.
- Maui Realtors reported 51 condos sold for the year to date. That is 51.89% below the 106 sales reported through the same period of 2021. It is 15.9% more than the 44 closes during the same period of 2019.
- Again, it is pretty clear that constrained inventory played a role in the substantial decrease in sales compared to last year. It’s difficult to estimate the role decreased demand played in the lower number of sales. That said, it is worth pointing out that we had more sales this year with far less inventory than we did in 2019.
- Of the 51 sales, 12 or 23.53% sold for over asking price and 28 or 54.9% sold for asking price or above. By comparison, 3.77% and 30.19% of all 2021 sales over the same period sold for over asking price and at or above asking price respectively. Over the same period of 2019, 4.55% of all condos sold over asking with 34.09% selling for asking price or above.
- Of the 51 condos that sold thus far this year, Realtors reported that 24 out of 51 or 47.05% were cash transactions.
- The median price of the condos sold for the year to date is $1,450,000. Over the same period last year, the median was $1,145,000. That’s a 26.64% difference. The median during the same period of 2019 was $917,500. That is a 58% difference.
- The average price of condos sold in Kapalua through September 5th is $2,438,421. During the same period of 2021, the average price was 29.07% lower at $1,889,224. The difference in average between 2022 and the same period of 2019 is 15.50%. During that period, the average was $2,111,034.
- The lowest priced condo sale thus far this year in Kapalua closed for $940,000. That price bought the new owner a 1 bedroom, 2 bath with 972 square feet of living space in Kapalua Golf Villas.
- That was one of just three condo sales below $1,000,000!
- Kapalua’s highest condo sale for the year to date closed for $8,000,000 at Montage Kapalua Bay. That unit includes 3 bedrooms, 3.5 bathrooms and 2,904 square feet of living space.
- Kapalua Golf Villas was the busiest condo complex for transactions with 17 total sales. Montage and Kapalua Bay Villas came next with 9 sales each.
Outlook for the Rest of The Year in Kapalua
It’s time to get out the old crystal ball to see what we might expect in terms of sales activity in Kapalua for the rest of the year. Ok, ok maybe we will skip the crystal ball and try to use some other metrics that might give us some sense of market activity. When trying to gauge current market conditions, I like to look at demand for new listings and inventory.
Last month, five new condo listings came to market and one home came to market. Of the five condo listings, two were under contract in less than 10 days. That would appear to suggest that there is still some demand in the condo market. While overall demand on island might be feeling a crunch from interest rates, Kapalua is less likely to be rate sensitive. Keep in mind that just under 60% of this year’s home sales and just under 50% of this year’s condo sales in Kapalua were cash transactions.
The current inventory of listings remains limited. There are only 11 active condo listings in Kapalua and 4 pending sales as of September 5th. When you break it down by condo complex. There are no active listings in the Ironwoods or Coconut Grove. Both Kapalua Ridge and Kapalua Golf Villas have one active listing each and the Bay Villas has two listings. Only the Ritz Carlton Residences with three listings and Montage with four listings have any significant depth of inventory. On the home front, there are just five active home listings with one pending home sale.
One last factor to consider is seasonality. The charts below shows Kapalua home and condo pending sales by month in 2022, 2021, 2019 and 2018. In all of those years, the last four months of the year tend to see fewer properties going under contract.
Based on the inventory, demand and past seasonality, I would expect that sales activity for the rest of the year will be quieter than the first eight months. That said, I would venture there should be some demand for the limited inventory particularly in the the lower price points of the condo market.
Longer Term Kapalua Outlook
I mentioned at the start of the Kapalua discussion, that Kapalua was one of the markets that saw the greatest increases in demand over the last couple of years. That comes after a decade where Kapalua saw lesser demand than other resort markets. While Kapalua has always had its share of loyal fans, it tended to be a slower market. Days on market were longer and sales volume was lower. That started to shift a little at the end of the decade and it changed completely with Covid. As the market slowly moves toward normal, what does “normal” actually look like?
Maui Prep helped fuel part of Kapalua’s Covid period boom. The school was able to scale up enrollment to accommodate a large number of affluent families who took advantage of the work from anywhere movement. Many of those families ended up buying homes in Kapalua or other nearby areas of West Maui. The question of how much ongoing demand there will be from affluent remote workers remains something of an unknown.
I recently had the opportunity to pose the question about the future of the Kapalua market to an agent who lives and works in the community. I thought her answer offered some interesting insights. While Maui Prep came up, she also discussed the role of the Montage and the Ritz. She pointed out that the closure of the Kapalua Bay Hotel in 2006 and construction projects at the Ritz limited places to stay and the overall appeal of the area during the latter half of the 2000s. The foreclosure on the Ritz Carlton Club in 2013 didn’t help. When the Ritz Carlton Club redeveloped and rebranded as the Montage in 2014, it brought in new vacationers. Many of them developed loyalty to Kapalua and eventually became second home owners.
With those two anchor properties, the other agent thought this would provide a solid foundation for future demand in the community. For this and other reasons, she is very much a Kapalua Bull over the long term. It was an interesting answer and one I thought might be worth sharing with our readers.
Contact The Maui Real Estate Team
We will continue to provide periodic updates on the Kapalua market on this blog. If you are interested in Kapalua Properties, you can find the current inventory of Kapalua Homes for Sale and Kapalua Condos for Sale on MauiRealEstate.com. Contact The Maui Real Estate Team if you have questions on any of the listings or need assistance buying or selling a property in Kapalua.
Maui Real Estate Blog
Kapalua February 2022 Market Update
If there is any one community within Maui that epitomizes the Covid era real estate boom, it is Kapalua. This resort community on Maui’s Northwest coastline was always an appealing locale for a segment of Maui’s luxury property buyers. That said, inventory tended to be higher and days on market tended to be longer than other resort areas like Wailea and to a lesser extent Ka’anapali. With that context, the recent surge in activity in Kapalua is that much more astounding. In this post, we take a look at some of the numbers from the last 18 plus months of sales. We also give a few thoughts towards the end of the post on the market outlook for 2022.
Kapalua was one of the first luxury home markets on the island to show signs of life in the second half of 2020. The strong performance continued into 2021. The numbers below represent highlights from the 2021 market activity.
Kapalua 2021 Home Sale Notable Numbers
- Maui Realtors reported 29 homes sold within the Kapalua Resort during 2021. That is a 70% increase over 2020.
- The 29 sales is the highest ever number for a single year in Kapalua. It is worth noting that 2020 was the second strongest year ever for home sales in Kapalua.
- The median price of homes sold during 2021 is $4,135,000. The average price is $4,972,327.
- The highest priced transaction closed for $15,000,000. That was for 9 Kapalua Place. This beachfront home includes over 7,000 square feet of living space on a .7 acre parcel of land.
- That was one of three closes over $10,000,000. The other two sales included another beachfront home in the Kapalua Place subdivision and a home in Kapalua Plantation Estates.
- Pineapple Hill was the busiest subdivision for transactions with 15 closes. Plantation Estates saw the next most activity with 6 sales. They were followed by Honolua Ridge with 4 sales, the aforementioned Kapalua Place’s 2 closes and a single home sale in Mahana Estates.
Behind the Numbers
As mentioned above, Kapalua’s market surge started in the second half of 2020. Specifically, it was the last quarter of 2020 when transaction volume picked up. Nine of seventeen sales for the year closed in November and December. The upturn in market activity happened earlier than the Wailea Market, a larger resort community with typically much higher sales volumes. What was it that drove earlier buyer interest in Kapalua? Well it wasn’t any new resort amenities. The biggest driver was the proximity to one of the island’s better private schools.
Early in the pandemic, Kapalua became a Zoom town. A large number of Silicon Valley employees moved to Maui to work remotely. Initially, they came as renters. Those with families had their kids learning remotely for the last couple of months of the 19/20 school year. At the start of the 2020/21 school year, the enrollment of Maui Prep ballooned by 100 students. All of the new students came from Silicon Valley families. The school, located minutes from Kapalua, offered a draw to remote workers that a place like Wailea did not. Many of the families that started as renters began to purchase property in the fall of 2020 and that momentum continued into 2021.
It’s worth looking at the 2021 sales more closely as market conditions were not uniform throughout the year. Twenty of the twenty-nine sales in Kapalua occurred in the first six months of the year. During the first part of the year, there was still a decent supply of homes for sale. The decreased sales volume during the second half of the year can be attributed to a combination of reduced inventory, seasonality and perhaps slightly lesser demand. Though, I would put inventory at the top of that list by a good margin. Scarcity remains a driving factor going into 2022. I will comment more on that in the market outlook below.
The Kapalua Resort set a new record for condo sales in 2022. The dynamics driving the market were a little different than the home market. It was less of a case of remote workers and more a case of the Covid second home boom. The numbers below show some of the 2021 market activity followed by a few more thoughts on what drove the numbers.
Kapalua 2021 Condo Market Numbers
- Maui Realtors reported 145 sales in the Kapalua Resort during 2021. That is a 363% increase in activity over 2020.
- For additional context, the next closest year for condo sales in Kapalua is 2004. There were 87 closed transactions that year.
- The median price of the condos sold in 2021 is $1,220,000. The average price is $2,060,805.
- The highest priced transaction closed for $13,295,000. That type of cash buys you a 4,050 square foot, four bedroom, four and a half bathroom unit at the Montage Residences Kapalua Bay with stunning views. This is the highest ever sales price for a condo in Kapalua.
- The lowest priced condo sold in 2021 closed for $600,000. That sale was a 1 bedroom, 1.5 bath unit at Kapalua Golf Villas.
- Golf Villas experienced the most sales activity in the resort with 44 closes in 2021. Kapalua Bay Villas came next with 30 closed transactions followed by Kapalua Ridge with 28 closed sales and Montage with 27. On the quieter end of the spectrum, 6 sales closed in Coconut Grove, 5 closed in the Ironwoods and 5 closed at the Ritz Carlton Residences.
- 2021 was the busiest year for transaction volume on MLS records for the Ridge, Bay Villas, Golf Villas and Montage. It was the busiest year since 2003 at Coconut Grove and the busiest since 2004 at the Ironwoods.
Digging into the Condo Numbers
The Kapalua Condo market didn’t fully kick into gear until early 2021. Market activity more closely resembled the activity in other condo markets around the island. A modest uptick in activity in late 2020 followed by frenzied activity after the new year. While activity slowed a little in the second half of the year, sales volumes for Kapalua condos did not dip to the same extent as the home market. Forty-six percent of all condo sales occurred in the second half of 2021 compared to only 31% of home sales. While supply shrank as the year went on, there was still enough supply available to meet the considerable demand.
I usually don’t spend too much time discussing land sales when I provide these community level market updates. That said, the 2021 Kapalua land market can’t be ignored. The increase in transaction volume compared to 2020 was bigger than any other segment of the Kapalua market.
Notable Land Sale Numbers
- There were 60 lots sold in Kapalua during 2021. That calculates to a 750% increase in transaction volume compared to 2020!
- The 60 sales is almost 1/4 of the 247 all time sales in Kapalua reported on the MLS.
- Mahana Estates led the way with 42 closed transactions. These were new developer sales.
- Honolua Ridge saw the second most sales activity with 11 sales. Realtors reported 5 sales in Plantation Estates and 2 sales in Pineapple Hill Estates.
- The median price of lots sold is $995,000. The average price is $1,156,000.
- The highest priced sale closed for $2,600,000. The 2.7 acre lot in Plantation Estates offers beautiful views towards Honolua Bay.
- The lowest priced lot closed for $700,000 in Mahana Estates.
Looking Behind the Land Numbers
This was the year of the great Mahana Estates land rush. At the start of the pandemic, I don’t think anyone would have predicted this development would sell out by the end of 2021. Market response for was tepid the first few years the development was on the market. One lot sold in 2019 and two in 2020. There were a couple of different days in February where 3 lots closed in a day. It will be interesting to watch this development evolve and build out. There were a fair share of bulk purchases among this year’s Mahana Estates Sales. Were those land speculators, spec builders or long term holds?
The 18 non-Mahana Ridge sales are nothing to sneeze at. Those 18 sales alone are more than any one year since 2005. The lack of inventory in the home market during parts of 2021 definitely pushed some buyers to build.
2022 Market Outlook
Inventory, or lack thereof, appears to be the biggest market driver to start 2022. At the time of this post, there are only 6 active Kapalua Homes for Sale. Three additional homes are under contract. As of right now, there are only 12 active Kapalua Condo listings. It is worth noting that only 2 of the active condo listings are priced for less than $2,000,000. An additional 12 condos are currently under contract. Land is even more scarce. There is only one lot for sale in Kapalua. An additional 9 lots are under contract.
It’s safe to say that 2022 shouldn’t threaten the record sales volumes of 2021. The question is whether we will see any inventory relief during the year. Will some of the people remote working list their homes if they go back to the mainland? Will the high prices entice any sellers to come to market?
What about demand? As of right now, demand appears to be pretty strong for the limited inventory available. That is putting upward pressure on pricing. Looking forward, are there any other threats to demand looming on the horizon? There is a lot of discussion about rising interest rates and their impact on the national real estate market. There are arguments on both sides, but a lot of economists seem to be downplaying the potential impact on buyer demand due to the acute supply issues. That said, you would think the impact might be even less in Kapalua where 62% of last year’s sales were cash.
I would argue that state of the overall economy and the trajectory of the stock market are likely to have a bigger impact. Over the years, we’ve noted something of a correlation between sales volume in the resort communities and the stock market. Good years for the Dow means more financial power for discretionary purchases like second homes.
The last question is whether we might see any buyer resistance on pricing. In particular, I wonder about the impact in the vacation rental condo market. Maui has always been a place where more people bought for love than rental returns. That said, the recent price increases resulted in even smaller cap rates. Will the combination of limited returns on higher purchase prices shrink the buyer pool at all? Thus far, that doesn’t seem to be the case.
Contact The Maui Real Estate Team
Contact The Maui Real Estate team if you are considering buying or selling property in Kapalua. We would welcome the chance to discuss market conditions specific to your interests.
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.
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.
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.
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.
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.
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.
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!