I wanted to take a quick look at the Wailea condo market now that we are a month into our “peak buyer season”. I spent some time looking at the current inventory and I was left with four observations and one question about the current market dynamics.

Wailea and Makena Condo Inventory

At the time of this post, there are 27 active condo listings in Wailea. While that’s a far cry from the half dozen active listings we saw briefly in early 2022, it’s still well below normal. There are four condo complexes in Wailea with no active listings. There are six condo developments with just 1 active listing at this time. None of the Makena condo developments have any active or pending listings.

The Highest Price Points have the Most Condos for Sale

The two condo developments with the most listings are Wailea Point and Wailea Beach Villas with 6 and 4 listings respectively. In addition to the condos at those two respective developments, there is also a top row Ho’olei and a rare Andaz listing. If you are shopping at higher price points, you have a lot more options to choose from.

Prices Remain High

The second half of 2022 saw prices decrease in a number of markets on the mainland. The situation on Maui is more nuanced. Small segments of the single family home market saw values decrease. Other segments held value or even increased in value. Wailea is one of those areas where values held or increased in the second half of 2022.

This is reflected by the current Wailea inventory. Seventeen of the twenty-seven active listings are seeking new record high sales prices for their development or at least their particular floor plan. That isn’t too much of a surprise considering the fact the values are at all time highs. That said, not all of the condos seeking record high prices have the location, view or the finishing to merit those lofty numbers.

Buyer Activity Is Low

Thus far, busy season is off to a slow start in Wailea. There are 5 condo resales under contract currently. Only 3 of the 5 went under contract since Christmas. This level of activity is well below the same period of time during the past two boom years. It is quite a bit less than recent pre-Covid years. In fact, this is the lowest number of Wailea condos to go under contract to start busy season since the winter of 2013/14.

Wailea is not the only spot on the island seeing a quieter busy season. While pending sales are increasing, they are still well below normal for this time of year. Looking at Kapalua, there are three pending sales with only one new pending since the start of busy season. Ka’anapali is the busiest of the resorts with only five pending.

While Wailea’s slow start is part of a broader trend, it may also be a reflection of some of the ambitious asking prices. Which brings us to my last question…

Who Blinks First?

With low transaction volumes, it seems like something is going to have to give for us to see an increase in sales activity in Wailea. Will sellers reduce their prices? Will buyers bite the bullet? Or do we see a little bit of both?

On the sell side, the dynamics are interesting. We are seeing some price reductions, but in many instances the new asking prices are still above record highs. That tells us that the sellers truly missed the mark on their initial pricing. The sellers are also getting some mixed signals. The low transaction volume is a suggests prices should be reduced. On the other hand, inventory remains low, and there are still the occasional sales with eye popping prices. The question is whether sellers are trying to find the market or that elusive solitary buyer willing to pay a premium.

For buyers, the record high prices may be increasingly hard to swallow. That is especially the case for second home buyers coming from markets where decreases in value are common place. On the other hand, if you are seeking out a condo in one of the developments with little or no inventory you may be inclined to jump when something comes to market that checks all of the boxes. Further decreases in mortgage rates may also bring some buyers off the fence, but the impact of lower rates is not going to be as significant in the Wailea market. Keep in mind, 62% of all transactions were cash in Wailea and Makena last year.

Contact The Maui Real Estate Team

We will continue to monitor the Wailea Condo market as we progress further into buyer season. Stay tuned for more updates. You can see the active inventory of Wailea Condos for sale on MauiRealEstate.com. Contact The Maui Real Estate Team with questions or for assistance buying or selling Wailea Condos. We look forward to being of service.

Welcome to the 15th edition of our market musings. The last musings was a little more of a backwards looking post as we reviewed notable numbers from the June Stats and took a deep dive into the land market during the first half of the year. This edition focuses on statistics that might be better suited to addressing current market conditions. We also take a longer look at the Wailea and Makena markets. We review the first six months of sales activity and take a look at current market conditions and the market outlook. There is a lot to digest in this post so you may want to be suitably caffeinated before proceeding.

Inventory

While June was a month of substantive increases in inventory, thus far the month of July has seen more limited change. The inventory of single family homes is actually lower now than it was on June 30th. At that time, there were 241 active listings. As of July 23rd, the inventory decreased 3% to 234 active listings.

For the condo market, the inventory of active listings increased modestly. On June 30th, the number of active listings was 199. As of July 23rd, the inventory increased 7.5% to 214 active listings.

Maui’s single family home inventory trends appear to be diverging from the rest of the country when it comes to inventory. That said, we are seeing variability in our market place. Inventory and levels of activity vary by price point and community. We should have an updated break down of inventory trends by price point shortly after the first of the month.

Price Reductions

As of July 23rd, 35.04% of all active listings reduced their price at least once. That is up modestly from July 4th when 34.03% of all active home listings reduced asking price.

For condos, 27.57% of all active condos reduced their price as of July 23rd. That is up from 24.63% of condos on July 4th.

We are little bit ahead of the national average when it comes to price reductions, but the number of price reductions appears to be increasing at a slower rate than national markets.

Price reductions are still climbing quickly.

34.8% of the market has taken a price cut.

It'll be October before price cuts level off. Over 40% at that time.

Sellers beware this only gets harder as the year goes on.

4/6 pic.twitter.com/jXnJ1K5jKD

— Mike Simonsen 🐉 (@mikesimonsen) July 25, 2022

It is interesting to see our rate of price reductions increasing slowly. Prior to the Covid boom, Maui was always a place where sellers tended to be slower to reduce price. Longer days on market were more common. One question we find ourselves asking a lot around the office is what a new real estate normal will look like on island moving forward? Will we go back to typical Maui seller behavior pre-covid or will seller behavior more closely resemble mainland markets? It may take some time to determine the answer to that question.

Quick Sales

Another metric we started tracking earlier in the year is the percentage or properties that go under contract within 10 days of coming to the market. Of the homes and condos listed between July 1st and July 8th, 31.91% went under contract within 10 days of coming to market. That is actually up from June 14th-21st when only 25.37% of listings went under contract within 10 days of coming to market. That said, this is also the first time this year when the percentage of homes going under contract within 10 days was lower than the same period of 2019.

It is also worth noting that there is difference between the home and condo market. Of the homes listed between July 1st and July 8th, 23.53% went under contract within 10 days of coming to market. Of the homes listed during the same seven day period of 2019, 25.81% went under contract within 10 days. The condo market continues to see properties go under contract at a brisker pace. Of the condos listed between July 1st and July 8th, 36.67% went under contract within 10 days. That is just ahead of condos listed during the same seven days of 2019 when 36.11% went under contract within 10 days

Some Quick Thoughts on Current Conditions

It’s a strange market out there. Buyer demand is well below what we saw during 2021 and earlier this year with far fewer properties under contract. That said, inventory levels remain well below normal in most communities around the island. It’s likely that the lack of inventory is one reason why we aren’t seeing more price reductions.

It seems as if there is a little bit stronger demand in the condo market than the single family home market judging by the higher percentage of properties going under contract within 10 days. That comes despite a little more condo inventory coming to market.

Buyers will find conditions less competitive than earlier this year. However, well priced properties in areas and price points with low demand can still generate multiple offers. Overall, sellers can expect longer days on market and fewer buyers. Sellers should be particularly mindful of market conditions specific to their community and price point when pricing their property. It’s also worth remembering that negotiation and give and take is a lot more likely today than it was six months ago.

Wailea and Makena Market Overview

This is the first of a handful of features we will be doing in our market musings looking at specific communities on the island. Today, we are focusing on the resort markets of Wailea and Makena. Its worth noting that I used the term markets plural. While our MLS lumps the two areas together, the two communities have differences that make them unique. Wailea is significantly more developed with large hotels, a shopping center and a lot more neighborhoods and condo complexes. While expensive, the entry point for Wailea is much lower than Makena. Makena is smaller, less developed and has the highest concentration of high priced homes on the island.

Wailea Home Sales

This is a look back at single family home sale activity in Wailea during the first six months of 2022. These are some of the most notable numbers from that time.

• Maui Realtors reported 17 homes sold in the Wailea Resort in the first half of the year. That is down 43% from the 30 sales reported during the first six months of 2021.
• Inventory constraints played a significant part in the reduced sales. Decreased demand may be another factor in the second quarter of the year, but it is hard to say definitively.
• Seven of seventeen sales closed for over asking price. Ten of seventeen sold for asking price or above. Demand was strong for the limited inventory available.
• Nine of the seventeen sales were reported to be all cash transactions.
• The median and average price of the homes sold in the first six months of the year is $2,800,000 and $3,478,441 respectively. This is actually down from last year when the median and average price of $3,475,000 and $3,973,168.
• To be clear, the value of homes in Wailea did not depreciate this year. This shift in medians and averages stems from a difference in the composition of inventory sold. The chart below shows the difference between the first halves of 2021 and 2022. While there were still a fair number of sub-$2,000,000 sales in 2021, there was also a much higher volume of transactions for $4,000,000 and above in 2021. This stems in part from the much lower inventory of homes above $4,000,000 in Wailea this year.

• The lowest priced home to sell during the first half of the year in Wailea closed for $2,270,000. That buyer purchased a 3 bedroom, 4 bath home with 2,562 square feet of living space and a pool in the Wailea Kai subdivision.
• The highest priced Wailea sale during the first half of the year closed for $8,750,000. The home in Wailea Highlands includes 4 bedrooms, 7 baths and 8,657 square feet of living space on just under a half acre.
• Wailea Golf Vistas experienced the most sales activity with 5 transactions. Wailea Pualani saw the second most sales with 4 transactions.

Wailea Condo Sales

The numbers below are some of the most noteworthy from the first six months of condo sales in Wailea.

• Maui Realtors reported 77 condo sales in Wailea during the first half of the year. That is down 51% from the 157 sales reported during January-June of 2021.
• Again, scarcity was a big factor in the decrease in sales. At one point in the first quarter, active Wailea inventory dipped to 6 condos. Some of the difference between the two years can also be attributed to new developer sales in Makali’i. The 2021 sales were boosted by 20 closes in Makalii based on contracts signed 2-3 years prior.
• Of the 77 sales, 26 or 33.77% sold for over asking price. An impressive 54 out of 77 sales or 70.13% of all transactions closed for asking price or above. Again, this points to strong demand and competition for the limited supply.
• Maui Realtors reported that 48 out of 77 or 62% of closed transactions were cash purchases.
• The median and average prices of condos sold in Wailea came in at $1,630,000 and $2,408,720 respectively. The median price increased 20.91% and the average price increased 26.56%. These numbers reflect not only increasing values, but also a greater proportion of high priced transactions.
• The lowest priced Wailea condo sale during the first part of the year closed for $650,000. That was for a studio unit in Wailea Ekahi.
• The highest priced condo to sell during the first half of 2022 is located in Wailea Beach Villas. The ground floor unit in the D building closed for $12,500,000. The 3 bedroom, 3.5 bathroom unit includes 2,889 square feet of living space and a private plunge pool.
• Wailea Ekahi and the Palms at Wailea had the most sales activity of any complex in Wailea Resort to start the year with 14 sales each.

Makena Home Sales

• Maui Realtors reported 7 home sales in the Makena area during the first half of 2022. That is the same number as what was reported during the first half of 2021.
• Two of the seven sales closed for over asking price. None of the homes sold for above asking. As you get to these price points, competition decreases and negotiation is more common.
• The median sales price for the 7 Makena homes sold is $17,200,000. The average sales price came in at $18,825,564. That is a 72% increase in median sales price over last year’s $10,000,000 sale. It is a 35.94% increase over last year’s average sales price of $13,848,071.
• This year’s low sale came in Makena came in at a $12,875,000. The oceanfront home in Makena Place includes 4 bedrooms, 4.5 bathrooms and 4,304 square feet of living space.
• The highest priced sale in Makena and the highest sale on Maui for the year to date closed for $26,490,700. That estate includes 8 bedrooms, 8 bathrooms, 10,464 square feet of living space plus a pool house on an acre across the street from the ocean.
• In terms of activity within subdivisions, two homes closed in Makena Place and two homes closed in One Palauea Bay.

Makena Condo Sales

• Maui Realtors reported 9 condo sales in Makena during the first 6 months of 2022. That is down 36% from last year’s first half tally of 14 sales.
• Two of the nine sales sold for full price. No sales closed for above asking price.
• The median and average prices of the 9 condos sold are $4,000,000 and $4,950,645 respectively. Median increased 42.98% over last year’s median of $2,797,500. The average price increased 26.89% over last year’s average of $3,901,500.
• The lowest priced condo transaction in Makena closed for $3,250,000 for a 2 bedroom, 2.5 bathroom 2,745 square foot unit at Na Hale O Makena.
• The highest priced condo transaction in Makena during the first six months of the year closed for $11,256,000. That was a Molokini Residence at the Makena Golf and Beach Club with 5 bedrooms, 5.5 bathrooms and 4,430 square feet of living space.
• Makena Surf saw the most sales activity during the first half of the year with 4 closes.

Wailea and Makena Market Outlook

Of course all of the sales referenced above reflect past market demand. The million dollar question, or twenty million dollar question in the case of some Makena residences, is what can we expect for the second half of the year? Surprising market behavior over the last two years makes any sort of prognostication a challenge and current economic uncertainty makes it that much harder. That said, it is worth at least touching on both the supply and demand side of the equation.

Wailea and Makena Inventory

On the supply side, there is still some variability by location and property type. There are currently 8 active home listings in Wailea with 4 pending. That is a pretty limited supply considering sales and current pending. It is worth noting that of that supply, a couple of sellers are reaching for some pretty big numbers for their respective neighborhoods. While record highs are normal of late, some of the prices are well above previous neighborhood highs. It is also worth noting that only 3 of 6 subdivisions have active inventory, and 5 of 8 listings are in Wailea Pualani.

There are currently 24 active condo listings in Wailea with 8 pending sales. A quick side note, the pending number does not include the 75 pending new developer sales at La’i Loa at Wailea Hills. This is up quite a bit from the 6 active listings on February 1. That said, it is still less than 2 months supply. Again, when honing in on certain condo complexes the inventory is particularly limited. There are six condo complexes with just 1 active listing and 5 condo complexes with no active inventory. It is also worth considering that 3 of the active listings are seeking prices well above all time highs in their complex. There are a number of other sellers seeking new high prices for their respective location or floor plan in their development.

There are currently 5 active home listings and 1 pending sale in Makena. That’s almost 5 months of inventory based on the first half of the year, but it is worth noting that the 7 sales during the first halves of 2021 and 2022 is pretty extraordinary activity. That makes the 5 active listings a healthy inventory for prospective buyers with the considerable means necessary to shop in this part of the island.

The Makena condo market inventory is literally zero. If you are looking for a place in one of the three condo developments or the Makena Golf and Beach Club, it is a waiting game.

The big unknown is what type of new inventory we may see through the end of the year. Inventory growth in July thus far is negligible.

What about Wailea and Makena Demand?

With Makena and Wailea predominantly second home markets, what type of demand will see from second home buyers in a shifting market? The amount of cash involved with transactions makes the market less sensitive, but not completely immune to increases in mortgage rates. Nationally, second home demand is down according to Redfin reports. What about some of the current market indicators we’ve used for the general market?

Of the eight properties listed in the area this month, two went under contract in less than 10 days or 25%. That is just a hair better than the overall Maui market. Of the current Wailea condo inventory, 29% of active listings reduced their asking price. For Wailea Homes, 28.57% of active listings reduced their price. For Makena Homes, 60% or 3 of 5 listings reduced their price. The Wailea numbers are below what we are seeing for price reductions island wide. The one caveat I might add is that historically, resort market listings are slower to adjust price. The Makena number is high, but it also is worth mentioning that pricing properties in the $10,000,000 plus range comes with its own set of challenges. These are large, very unique custom homes not as well suited to comparative valuations.

One last thing to mention is seasonality. Looking at the chart above, you can see that there is a general seasonality to the market in Wailea Home Sales with more properties going under contract during the first half of the year than the second. The same is true for Wailea condos. Makena is a little more random due to its small sample size. If the market follows typical behavior, we should expect less sales activity this year.

Based on all of the above, the Wailea and Makena markets should see less activity for the remainder of the year due to the combination of market trends, seasonality and limited supply. Barring a massive influx of supply and/or a significant worsening of the current economic situation, the limited supply should keep prices elevated.

You can search through the current inventory of Wailea and Makena Homes for Sale and Wailea and Makena Condos for Sale on our site.

A Little Maui Beauty to Brighten This Post

A reminder: Maui no ka oi! pic.twitter.com/mMOk54SXiR

— Maui Hawaii (@Maui) July 28, 2022

Contact The Maui Real Estate Team

Congratulations if you made it to the end of this post. It was a long one! It also must mean you are pretty interested in the Maui market. Feel free to Contact The Maui Real Estate Team with questions or for assistance buying or selling property on Maui. We would welcome the chance to be of assistance.

It’s May on Maui and time for another Market Musings. This week is a little bit more of a meat and potatoes affair as we look at notable numbers from the April Statistics and try to get a better pulse on current market conditions. National Real Estate numbers are showing signs of slightly slower activity due to current interest rates. It feels like we may be feeling something similar on Maui. Do the numbers support my anecdotal feelings? Keep reading to find out what I discovered.

Notable Numbers From the April Statistics

The April statistics are out and they speak to the strong buyer demand in January-March. I compiled these numbers using sales just from the island of Maui. I filtered out Molokai and Lanai.

Home Sales

• Maui Realtors reported 101 home sales. That is down 22% from last year’s 129 sales.
• Tighter inventory is a significant factor in the decreased sales numbers. At the end of April, the Realtors Association of Maui reported 176 homes on the market. That is 24% lower than last year at this time and 15% lower than the end of March 2022.
• Competition remained high for the limited inventory. Of the homes sold, 34% sold for over asking price and 56% sold for asking price or higher.
• That’s stronger than last April’s numbers of 26% over asking and 53% for asking price and above, but lower than March 2022’s 35% sold for over asking and 59% sold for asking or higher.
• The median price of the homes sold was $1,250,000. That represents a significant 28% increase over last April’s median of $975,000.
• The increase in median can be attributed in part to price increases and also limited inventory at lower price points. Only 8 homes sold for less than $800,000 in the month of April.
• The average price of the homes sold was $2,189,247. That is a more modest increase of 8% over last April’s average of $2,015,101.
• The high average prices are due to robust luxury market activity. Three homes sold for $10,000,000 or higher. A total of 9 homes sold for more than $5,000,000 and 25 for more than $2,000,000.
• The highest priced home closed for $18,750,000. That was for a 4,800 square foot luxury home with a 600 square foot cottage on just over a half acre right on Keawakapu Beach in South Kihei.

Condo Sales

• Maui Realtors Reported 168 condos sold in April. That is down 36% from April of 2021.
• Inventory played a big part in the decreased activity compared to the year prior. There were only 158 condos on the market at the end of April. That is 50% of the number for sale at the end of April 2021 and 6% below the end of March 2022.
• As with homes, competition for condos on the market remained high. Of the condos sold, 41% sold for over asking and 62% sold for asking price or above.
• That is a substantial increase over last April’s numbers of 9% sold over asking and 36% sold for asking price or above, but a little lower than March when 43% sold for over asking and 70% sold for asking price or above.
• The median price of condos sold in April is $857,500. That is 23% higher than the median in April 2021.
• Average sales price for a Maui condo in April comes in at $1,223,669. That is 28% higher than the median in April 2021.
• Like the luxury home market, the luxury condo market remained busy. That helped boost the average condo sales price. There was a single condo sale over $10,000,000. Four condos sold for over $5,000,000 and 34 condos sold for $1,500,000 or higher.
• The highest priced condo closed for $12,000,000. That was for a ground floor 3 bedroom in the D building at Wailea Beach Villas.

What’s Happening Now?

Sales Statistics look backwards. As mentioned above, the strong April numbers reflect buyer demand from February, March and to a limited extent Early April. Since that time, Interest rates broke the 5% barrier and we transitioned out of peak tourist season.

The one relevant statistic to the present is inventory. Supply was lower at the end of April than it was at the end of March. The first five days of the month did not bring a torrent of new inventory. That’s one area where we differ from the overall national market. The National inventory of homes for sale slowly increased during the spring with healthier gains over the last week. Plain and simple, the supply side of the Maui market remains severely constrained.

What about demand? There are suggestions in the the April stats that demand has been cooling slightly. Over asking sales prices and full price sales both decreased from March. Is there anything we can tease out from the current inventory?

In Market Musings Volume 8, we looked at the percentage of new listings going under contract in 10 days or less between April 6th and 13th. It came in at 46%. Between April 19th and April 26th, 35 out of 82 listings are under contract in 10 days or less. That is roughly 43%. It is worth noting 2 additional properties went under contract only to cancel escrow.

While I don’t have a basis for past comparison, I also looked at price reductions in the market. Out of the 160 active home listings on May 5th, 59 or 37% reduced their price . Of the 130 active condo listings, 19 or right around 15% reduced their price. This can be a baseline of comparison for future Musings.

Variable Conditions

I saw the quote below and had to work into a Musings. It was such a good analogy. I could practically feel the blister forming on the roof of my mouth from a Hot Pocket I consumed in 1991.

The housing market is like a hot pocket taken out of the microwave a tad too early. Some portions are blazing hot while others are only warm. What I mean is not all neighborhoods and price ranges have the same temperature.

— Ryan Lundquist (@SacAppraiser) April 25, 2022

It also resonated with me as I watched the hot sheet over the last ten days. It sure seemed like not all parts of the Maui Real Estate Market are at the same level of frothiness. That’s clearly the case when comparing homes to condos. Condos have less inventory and far fewer price reductions overall.

Within the home market, I looked at the price reductions and sorted them by community. Kula and Haiku have the highest percentage of active inventory that’s dropped their price one or more times. They both clock in with 42% of the active inventory having dropped their price.

While this validates some of my expectations. I will say this is something of a flawed metric. While Haiku has had quite a few price reductions, there are only 13 active listings. Well priced properties can still sell pretty quickly. On the other end of the spectrum only 8% of the active inventory in Ka’anapali made a price reduction to date. That would seem to suggest strong demand. That said, the average days on market for the active Ka’anapali listings exceeds 100 days.

Overall, the market remains pretty darn strong and inventory remains really low, but there is a hint of nuance to things. Some parts of the market still feel hot like earlier this winter, others are just warm. The slight cooling likely can be attributed to the significant rise in mortgages rates. Rates continue to rise slowly and other economic headwinds like the recent stock market plunge could threaten demand. Will decreased demand change the trajectory of the market or will the low inventory continue to be the determining factor in market conditions? I will keep you posted in future editions.

A Side of Maui Beauty With the Stats

Another beautiful #Maui morning! 🌴 #mauinokaoi pic.twitter.com/DtUEPr4oom

— Star Noodle (@StarNoodle) May 2, 2022

Contact The Maui Real Estate Team

Dynamic market conditions call for quality, experienced representation. Contact The Maui Real Estate Team if you are considering buying or selling Maui Real Estate. We look forward to learning about your real estate needs.

Today’s blog looks towards leeward Haleakala and the beautiful beaches, stunning views, and high end amenities of the Wailea Resort. We wanted to take a look at how the Wailea market fared through the year to date. This post includes information on Wailea Home and Condo sales as of September 22, 2021. It is also worth noting that this looks exclusively at properties in the Wailea Resort itself. Our MLS groups Wailea and Makena together. I plan on doing a separate post on the Makena market some time next week.

Notable Number’s From This Year’s Wailea Home Sales

• As of September 22nd, Maui Realtors reported 41 home sales. That is a 227% increase in activity compared to the 18 that closed during the same period last year.
• The median price of the homes sold is $3,000,000. The average price is $3,691,505. That is an increase of 44% and 55% over last year’s median and average prices respectively.
• It is worth noting that the change in median and average sales price is not an accurate reflection of the year to year change in values. More sales at the highest reaches of the market helped to boost both of those numbers.
• The highest priced sale of the year to date in Wailea closed for $10,900,000. This Wailea Highlands property included a 6,042 square foot home on almost an acre of land.
• The Wailea Highlands close was one of two sales to close for more than $10,000,000 and one of six home sales to close for more than $5,000,000 in Wailea. There were no sales over $5,000,000 during the same period of 2020.
• The lowest priced sale closed for $1,350,000. This Wailea Pualani home offered 1,991 square feet of living space.
• Competition for homes increased significantly. Of the 41 sales, 11 sold for over asking price and 5 sold for full price. By comparison, none of the sales over the same period of 2020 sold for above asking price.
• More competition occurred at the lower price points of the Wailea home market. Eleven out of nineteen sales under $3,000,000 closed for asking price or above.
• Almost 66% percent of the transactions were reported to be cash sales. Cash seemed to be preferred in the more competitive $3,000,000 and under range and with higher priced transactions. A greater number of buyers chose to use conventional financing for the $3,000,000 to $5,000,000 price range.
• Wailea Pualani and Wailea Kai saw the most activity of all of the neighborhoods in Wailea. There were 8 closes in each subdivision.

Thoughts on Recent Activity and the Outlook for the Wailea Home Market

Needless to say, the numbers above point to a robust eight plus months of home sales in Wailea. While many second home markets took off in the spring and summer of 2020, Maui’s market remained relatively quiet due to quarantine requirements. We started to see an uptick in buyer activity after the governor lifted quarantine restrictions in October. Buyer activity started to increase during those last few months of 2020. It hit a whole other level in 2021. I checked the MLS data going back to 2003. Only January-September of 2005 came within 10% of this year’s total.

While this spring marked the peak of the frenzy, buyer demand remains strong. Inventory, on the other hand, is particularly limited. There are only eight active home listings for sale within the Wailea Resort. An additional seven homes are under contract. Barring any significant changes in the global economic picture or an unexpected influx of new listings, Wailea should remain a seller’s market through the rest of the year with sales volumes slowing due to the lack of inventory.

Notable Numbers From the 2021 Wailea Condo Market

• Maui Realtors reported 232 condos sold in Wailea between January 1, 2021 and September 22nd. That is a 362.5% increase over the 64 sold during the same period of 2020.
• The median price of the 232 condos sold is $1,398,000. The average price is $1,910,153. That is 15.3% and 12.2% higher than last year’s median and average respectively.
• The highest priced condo sale for the year to date closed for $14,000,000. This Wailea Beach Villas condo features 3 bedrooms, 3.5 bathrooms, almost 3,000 square feet of living space and a direct beachfront location.
• The lowest priced Wailea condo sale for the year to date closed for $647,000. This is a studio unit at Wailea Ekahi.
• I did a double take when looking at the data for the lowest priced condo sales in Wailea. I saw two closes at Wailea Point for $375,000 and $425,000 respectively. That is a shockingly low price for one of the more premium developments in Wailea. Closer examination revealed that the two seemingly low priced condo sales were for boat garages in the development.
• According to MLS statistics, Makali’i was the busiest condo for sales thus far this year. It is worth noting that the majority of the 47 closes were new developer sales. These new developer sales were based on pre-construction contracts penned two to three years ago.
• While closes at Makali’i juiced this year’s total sales volume based on older contracts, it is worth noting that quite a few properties went under contract in 2021 that won’t close until at least 2023. La’i Loa at Wailea Hills is the newest condo development in Wailea. Sales began in the spring of 2020. A roll out right at the start of Covid-19 blunted momentum. That said, it picked up steam in the fall of 2020. Strong demand in the first few months of 2021 resulted in the reservation of all 75 units by this spring.
• Maui Realtors reported the most resales at Wailea Ekahi and Grand Champions. Both developments stand at 25 sales for the year to date.
• Of the 232 sales, MLS records show 129 were cash transactions. That is 55.6% of the total sales. That is up from 47.9% over the same period last year.
• Competition also increased significantly in the Wailea condo market. Of all of the closed transactions, 35 closed for over asking price. Over the same period of 2020, not a single transaction closed for over asking price.

Thoughts on and Outlook for the Wailea Condo Market

Like the Wailea home market, the Wailea condo market experienced strong activity through the first nine months of the year. Also like the home market, the trajectory of the market showed a similar pattern over the last 18 months. It was a slower spring and summer of 2020 as the island felt the impacts of Covid-19 and a lack of visitors. A gradual ramping up of activity followed when tourism reopened in October. The start of the new year brought a whole other level of interest in Wailea Condos. We entered the year with a fairly balanced market between supply and demand. That shifted as buyers ravenously chewed through the market inventory. As with the home market, we are seeing all time high levels of sales activity for the year to date.

With high levels of demand and a shrinking supply, we also experienced a lot of upward price pressure in the market. With variability in value between units, it is hard to quantify the exact levels of appreciation. If I were to guess, I would saw 10% or greater appreciation is quite likely with variability between some of the different developments.

As for the outlook for the rest of the year, it really comes down to inventory. Plain and simple, the active condo inventory is shockingly low. At the date of this post, there are 6 active condo listings in all of the Wailea resort. There are active listings at only four of the seventeen condo developments within Wailea. Needless to say, this will constrain sales volume unless we see a considerable uptick in active inventory. It will also lead to some upward pricing pressure.

Contact The Maui Real Estate Team

Contact The Maui Real Estate Team if you are interested in buying property in Wailea. We would be happy to keep our eyes and ears open for new inventory or unlisted properties. You can also keep tabs on the current inventory of active Wailea Condo listings and Wailea Homes for Sale on MauiRealEstate.com. I don’t think you could find a much better time to go to market if you are a Wailea property owner thinking about selling. Send us a message or give us a call to arrange a free consultation and an estimate of the current market value of your condo.

The Maui Real Estate market has seen a healthy bump in condo sales during 2017. Sales volume for the first five months of the year are about 10% higher than the same period of 2016. Much of that growth can be attributed to the vacation rental condo market in Kihei and Wailea. After a couple of relatively slow years, this year has seen a resurgence of buyers interested in South Maui. I wanted to take a look at the numbers specific to Wailea and Kihei, the condos that are seen the biggest increase in demand, and provide a few thoughts on what might be driving the increase in activity.

Wailea and Kihei saw a 56% increase in vacation rental condo sales between January 1st and May 22nd, 2017 compared to the same period in 2016. There were 173 units sold this year vs 111 sold last year. That increase in activity occurred across all price ranges. Condos priced $500,000 and under saw the most activity with 78 transactions. There were 65 closes during the same period of 2015. The 20% increase in sales compared to 2016 was actually the lowest percentage increase in activity for any price range. The price range from $501,000 to $1,000,000 saw a larger increase in activity with 63 sales compared to 33 sales. That calculates to a 91% increase in sales activity. While the $1,000,001+ price range experienced the biggest percentage increase in activity compared to last year with 38 units sold compared to 13. That is a whopping 292% increase in sales activity.

Wailea Condo Sales
Which condo complexes saw the biggest gains? In Wailea, the increases were across the board. Every single condo complex in Wailea that allows vacation rentals has seen more sales in the year to date than they did over the same period of time last year. That said, there were a few condos that stood out over the others.

Wailea Elua
Wailea Elua is a low density complex with 25 two story buildings located on 24 beachfront acres. Prices in the complex range from roughly $1,000,000 for one bedroom units up to over $3,500,000 for front row, beachfront two bedrooms. The property is valued by owners for its low density, location and beautiful Elua Beach. To say that the start of 2016 was not busy for Wailea Elua would be an understatement. There were no closes by this point of the year. As of the 22ndd of this month, there have been 6 closes.

Wailea Ekahi
Wailea Ekahi is the biggest beachfront complex in Wailea. There are 296 units spread over 54 buildings on 35 acres. It has studio units through two bedrooms in a variety of floor plans. Prices range from the $600,000s for studios all the way up to just under $2,000,000 for two bedrooms close to the beach. Owners like the location, the green belt that goes through the middle of the property, the beachfront pool area and Keawakapu Beach. Ekahi saw decent market activity in 2016 with 5 sales in just under 5 months. There has been double that amount of activity with 10 sales reported this year as of May 22nd.

Wailea Beach Villas
Wailea Beach Villas is home to the highest priced vacation rentable condos in Wailea. The property has 9 buildings on just over 10 acres. Wailea Beach Villas has larger 2 and 3 bedroom floor plans with some units having as much as 2,900 square feet of living space. Prices range from the low $2,000,000s to over $9,000,000. Owners like the bigger floor plans, amenities, newer construction and central location within Wailea. It is situated right behind the shops of Wailea and next to the Grand Wailea. It only had one sale during the first 5 months of 2016. There have been 4 sales to date this year.

Kihei Condo Sales

Kamaole Sands

When I first started in real estate, I met with a vacation rental manager to discuss popular Kihei vacation rentals. Kamaole Sands was the first condo he mentioned. Kamaole Sands has 440 units spread over 10 buildings on 15 acres. It has one, two and a handful of three bedroom floor plans. Prices range from the mid $300,000s up to the $700,000s. Condos located on the “inner circle” green space and condos closer to the ocean sell at a higher premium. Owners appreciate the large green space running through the center of the complex that features a pool, fountains and tropical landscaping. It is located across the street from Kamaole Beach Park III. It is a big complex and it typically has higher occupancy. Over the last few years, there has been an abundance of inventory and relatively few buyers. In 2016, there were just 5 units sold through the first 5 months of the year. This year, there was a clear market shift. Sales increased over 300%, with 16 closes for the year as of May 22, 2017.

Maui Banyan
If Kamaole Sands was first on the list of condos mentioned when I talked to the vacation rental manager, Maui Banyan was mentioned shortly thereafter. There are 256 units spread over 8 buildings on 8.6 acres. There are one and two bedroom floor plans. The popular two bedrooms have a lock off that allow the units to be rented as a studio and one bedroom. Prices range from the $low $400,000s up to the high $600,000s. View and high quality remodels tend to distinguish the higher priced properties. The lock off option, two nice pools, the location across from Kamaole II Beach Park and proximity to shops and restaurants are typically some of the first things that owners mention about the property. In the first five months of 2016, there were only 3 sales. As of the 22nd of May, there have been 11 sales reported for the year to date. That is an impressive 366% increase in activity.

Maui Vista
Maui Vista offers one of the lower entry points into the South Kihei vacation rental condo market. The complex has 280 units spread over three buildings on 8.82 acres. Each building has its own pool and set of tennis courts. There are both one and two bedroom floor plans. Prices range from the high $200,000s for fixer units up to the mid to upper $400,000s for two bedrooms. Maui Vista offers good amenities and close proximity to shops and restaurants. It is a block from Charley Young Beach Park. Maui Vista has seen a little more activity over the last couple of years compared to places like Maui Banyan and Kamaole Sands. It had 7 sales through the first five months of 2016. That said, it was another place that experienced a healthy jump in activity. As of May 22nd, there have been 16 sales reported this year.

Why the surge this year?
While the overall Maui real estate market experienced fairly strong years in 2015 and 2016, the vacation rental condo markets in Wailea and Kihei were not seeing the same strong levels of activity. Inventories were high and sales volumes were low. A significant factor in the slower sales over the last couple of years was a lack of demand from Canada. The period between 2007 and 2013 was an era of stronger Canadian Currency. With the Looney at or near par with the U.S. dollar, Canadians were flocking to South Maui. They remained pretty consistent buyers through the recession. The slip in oil prices in 2014 pushed down the Canadian dollar and a significant pool of buyers shrank considerably.

While that explains why sales have been lower the previous couple of years, I don’t think that speaks to why we are seeing the increase this year. The Canadian dollar is still well below par with the U.S. dollar. We have seen some Canadian buyers start to come back, but it isn’t enough to juice the market to the extent that we have with this year’s sales increases. I did my best to look at the geographic composition of buyers this year in some of the Kihei and Wailea complexes over the last five years. I say that I did my best in that more recent sales within the last month may not show the geographic origin of the buyer yet. With some of the older sales, the condos may have already resold preventing me from seeing where the previous owner resided full time. In Kamaole Sands, just 1 out of the 16 buyers this year is Canadian. By comparison, in 2013, 3 out of 10 were Canadian and 2 out of 4 units sold in 2012 were Canadian buyers. Maui Vista had a few more Canadian buyers this year with 3 out of the 16 sold. That is still well below the 4 out of 7 and 4 out of 10 Canadian buyers we saw at Maui Vista in 2012 and 2013 respectively. The one place where we did see a little more Canadian activity this year was among the higher priced Wailea condos. At Wailea Elua 2 out of 6 buyers were Canadian, and 1 out of 4 buyers were Canadian at both Polo Beach and Wailea Beach Villas.

If the Canadians played only a small part in the resurgence, what were the other factors at play that drove the sales increase? I can’t say definitively, but I would suggest there were a few factors at play. The strength of our feeder markets play a part. Real estate markets in the Western United States remain strong. Buyers coming from strong real estate markets may be empowered both psychologically and financially to purchase a second home on Maui. The stock market continues to achieve near record highs. Strong stock returns may enable buyers to make a discretionary second home purchase. The last factor is pure speculation on my part, but I wonder if the growing strength of the Airbnb brand might also play a role. With Airbnb doing more and more advertising, maybe just maybe that is planting the bug in some people’s ear to consider a vacation rental condo purchase. The last factor that enabled the upsurge is more tangible. We had supply to sell. Home sales volumes are down this year on island, but not due to a lack of demand. There just isn’t enough inventory for buyers particularly in the price ranges below $1,000,000. There was plenty of inventory in the condo market after the previous two to three slow years. In Kihei, there are also some pretty good values. Places like Kamaole Sands are still selling for prices a fair amount below the last market peak.

While the market has absorbed some of the inventory during the first five months of the year, there is still a good selection of condos available to sustain healthy activity in the South Maui condo market. I would suspect that we will continue to see stronger sales this year unless something in the overall economic picture cuts back demand. Contact the Maui Real Estate Team if you are considering a vacation rental condo purchase on Maui. We would welcome the chance to talk to you about some of the options on the market that might fit your needs. You can also search MauiRealEstate.com for the full inventory of Kihei Condos for Sale and Wailea Condos for Sale.

Before we head into February, I wanted to take a quick look back at the 2015 Maui Real Estate market. This is a review of sales volumes, median prices and other notable numbers. I also wanted to address a few questions that arose in my own mind while compiling the statistics. Without further ado, here are the 2015 statistics.

Maui Sales Volume, Median Prices and Total Dollar Volume
There were 1090 homes sold on Maui during 2015 with a median sales price of $580,000. The total dollar volume of homes sold in 2015 was $931,646,757. There were 942 homes sold in 2014 with a median price of $570,000. The 2014 total dollar volume was $825,770,160. That means we saw almost a 16% increase in sales volume, just under a 2% increase in median price and a 13% increase in dollar volume when comparing 2015 to 2014.

There were 1,199 condos sold in Maui County during 2015 with a median sales price of $410,000. The total dollar volume of condos sold was $763,806,071. The 2014 condo totals were 1,201 sales with a median price of $414,750. The 2014 total dollar volume was $755,031,268. That means sales volume dropped two tenths of a percent, median price dropped just over one percent and the total dollar volume rose one percent in 2015.

There were 154 land sales in Maui County in 2015 with a median sales price of $447,650. The total dollar volume of land sold was $136,353,541. The 2014 sales figures for land were 166 sales and a median price of $520,000. The total dollar of land sold in 2014 was $119,330,455. That is just over a 7% drop in volume, a 14% drop in median price and a 14% increase in the total dollar volume.

Notable Numbers from the 2015 Maui Real Estate Sales

• The highest priced home to sell on Maui during 2015 closed for $41,775,000. This was by far and away the highest ever priced paid for a home on Maui. The subject property consists of 6,737 square foot house on 4.23 acres in Makena. More than a few eye brows were raised by a sale that was priced well above other comparable properties in the area. The property was not listed at the time that it sold.
• That was one of 56 homes to sell for more than $2,000,000 during 2015. The 56 homes sold over $2,000,000 was down by 14% from 65 sold in 2014.
• The Makena and Wailea area were busiest part of the island for sales over $2,000,000 with 13 total closes.
• There were 17 beach or oceanfront homes that sold in Maui County during 2015. That was a 29% decrease from the 24 oceanfront sales in 2014.
• On the other end of the spectrum, the lowest priced home to sell in Maui County closed for $94,750. That home is located in the Maunaloa Village area of Molokai. The lowest priced home to sell on the island of Maui closed for $210,000. The three bedroom, one bath home in Wailuku was situated on a tiny 2,370 square foot lot.
• The highest priced condo to sell on Maui during 2015 closed for $8,500,000. The beachfront, three bedroom unit at Wailea Beach Villas has over 2,900 square feet of living space.
• That was one of 91 condos sold for over $1,500,000 during 2015. That exceeded the 83 high end condo sold in 2014 by almost 10%.
• The Honua Kai Resort saw the most high end condo sales activity with 25 closes over $1,500,000. Montage Kapalua Bay was notable with 9 sales over $3,950,000.
• The lowest priced condo to sell closed for $20,000. That was a 1 bedroom, 1 bath unit at Harbor Lights in Kahului.
• The highest priced land transaction to close in 2015 sold for $10,800,000. That was for a half acre lot in the Maluaka Homesites area of the Makena Golf and Beach Club.
• That was one of 6 land sales in this neighborhood for $7,800,000 or more.
• There were 25 total land transactions of $1,000,000 or more in Maui County during 2015. That was up slightly from 24 sales over $1,000,000 in 2014.
• The lowest priced lot to sell in Maui County closed for $20,000 for a 5,351 square foot lot on Molokai. The lowest priced lot to sell on Maui proper closed for 26,000. That was a leasehold lot in the Hawaiian Home Lands in Kula.
• There were 168 bank owned or REO transactions that closed in Maui County during 2015. That was up from the 116 bank owned sales in 2014. That is almost a 45% increase in bank owned sales.
• There were 49 successful short sales that closed in 2015. That is down 49% from the 97 short sale transactions in 2014.
• Of the properties that closed in 2015, 36% were reported to have been cash sales. That is down from 2014 when 42% of the sales were said to have been cash transactions.

Some Questions and Answers About the Numbers
While reviewing the numbers above, a lot of questions came up in my mind. In the paragraphs below, I wanted to address some of these questions and give my thoughts on potential answers.

What drove the increased home sales activity this year?
When looking at the numbers above, homes were the only property type to outperform the 2014 numbers. What drove the increase in sales? There were a couple of factors that came into play. I believe a lot of the activity was driven by on island buyers. Island rents have soared over the last few years. Lower interest rates made the buy vs. rent argument that much more compelling. The threat of increased rates in the near term added to buyer urgency. Evidence of the increased demand from local buyers could be found in the big bump in activity in Central Maui. Home sales in that part of the island were up 33% over last year. The Upcountry area also saw a bump with Pukalani, Kula and Makawao sales up 28,31 and 7% respectively. These are communities that tend to draw on island vs second home buyers. A couple of strong years for tourism helped put local buyers in a better position to afford their purchase.

If sales activity was so strong, why did the median home price only increase 2%?
The first thing to note when answering this question is that changes in median price are not a direct reflection of changes in property values. Median price is also driven by shifts in where sales activity occurs. More high end sales can push up the median sales price while more low end sales can push down the median price. While values increased quite a bit more than 2% in many parts of the market, that was offset by a shift in where sales were occurring. There was a 14% decrease in sales over $2,000,000. As mentioned in the paragraph above, we were also seeing higher levels of activity in more affordable communities around the island. These shifts in market activity helped to offset stronger appreciation in some of the lower and middle priced communities on island.

As a follow up question, one might ask exactly how much Maui home values increased in 2015? That is a really tough question to answer. First and foremost, the rates of appreciation varied largely by price point and location. Homes at or below the median saw the most appreciation due to simple supply and demand. These price points had a much larger pool of buyers and supply was relatively limited. Higher end homes have much more inventory and a much smaller pool of buyers. As a result, upward price pressure has been far more limited.

Why did the condo market see a dip in activity?
If home sales were so strong, why were condo sales down? Condo sales are driven more by off island buyers. I would say the weakening Canadian Dollar played a big part in the decrease in condo sales activity. Maui has seen a significant number of Canadian Condo Buyers since about 2007. That was the first year that the Canadian Dollar was on par with the U.S. dollar. The emergence of Canadian buyers in 2007 helped to buoy the Maui market while a lot of mainland markets were already starting to see big decreases in sales and pricing. They continued to be buyers through the downturn and into the start of the recovery. Around 2013, the Canadian dollar started to dip below par and more substantial decreases occurred in 2014 and 2015. At the time of this post, the Canadian dollar is currently worth 72 cents in American dollars. Less buying power means fewer Canadian buyers. It doesn’t help that a lot of the previous Canadian buyers were coming from Alberta. The weakening Canadian dollar is a reflection of weakening oil prices. The drop in oil prices is a double whammy for buyers from the oil rich province of Alberta.

Final Thoughts
I know tomorrow is the first of February, but I still plan on putting out more posts specific to how different communities around the island performed during 2015. Those posts will also include some thoughts on what we might expect to see in those communities during 2016. Feel free to contact The Maui Real Estate Team if you have any questions on the numbers above, or if you need assistance buying or selling property on Maui. We welcome the opportunity to be of assistance.