Maui Real Estate Blog
Maui Market Musings Volume XXII
We are starting off 2023 with volume 22 of our market musings. Early January means that we are in the beginning of what is traditionally our peak real estate season on Maui. This post helps to give a sense of recent market demand and current inventory levels as we enter into what should be the busiest 3-4 months of the year for real estate transactions on island.
December Market Activity
We start things off by taking a look back at December. How many new listings came to market, went under contract and sold? Activity from the five previous Decembers are given for additional context.
New inventory during the month of December was below normal. The number of new listings is anywhere between 25% and 36% lower than what we would anticipate in the pre-Covid Decembers of 2017-2019. This December’s home inventory benefited from an influx of new listings in the Hoku’ula subdivision in Upcountry Maui towards the end of the month. Were it not for those 19 listings, new inventory would be even further below what’s considered normal.
New condo inventory was significantly lower than usual in December. It is anywhere between 47% and 56% below the December new inventory of 2017-2019. Whether it’s the golden handcuffs of low interest rates, the lack of potential replacement properties or just loving their place on Maui, people are holding on to their condos for now.
While new inventory was low, buyer demand also remained low in December. The number of new pending home sales came in at anywhere between 32-33% below what we saw in the three years prior to the start of Covid.
New Pending condo sales came in between 45% and 52% below the activity seen over the years prior to Covid. The slow down in new condo inventory and sales activity is particularly pronounced over the last few months.
The closed transactions in December give us some insight to market demand a little earlier in the fall. Most of these closes came out of contracts agreed to in October and November. Home sales were between 28 and 33% lower than a typical Pre-Covid December. Condo sales in December are between 45 and 53% lower than the three Decembers prior to the start of Covid. Of course, this December’s home and condo sales are way below 2020 and 2021 sales volume.
End of December Maui Inventory
Inventory, or lack thereof, continues to be a significant factor in our market. While new inventory remains low, quieter buyer activity over the last 2-3 months allowed for modest growth in the overall number of properties for sale. That said, we still have a lot less inventory that what was more typical pre-Covid. The charts below provide detail on active and pending listings by price point and community.
End of December Home Inventory
|<$750,000||9||15||5||14||6 (+1)||10 (-4)|
|$750,000-$999,999||29||29||31||25||25 (-6)||28 (+3)|
|$1,000,000-$1,499,999||64||28||61||28||78 (+17)||20 (-8)|
|$1,500,000-$1,999,999||41||13||28||17||36 (+8)||11 (-6)|
|$2,000,000-$2,999,999||35||10||34||11||37 (+3)||12 (-1)|
|$3,000,000-$4,999,999||32||7||32||7||31 (-1)||9 (+2)|
|$5,000,000-$9,999,999||26||5||23||9||27 (+4)||8 (-1)|
|$20,000,000+||3||1||5||1||4 (-1)||2 (+1)|
|Totals||248||108||233||112||258 (+25)||100 (-12)|
|Kihei||40||11||31||15||39 (+8)||7 (-8)|
|Kula||20||11||22||12||21 (-1)||10 (-2)|
|Lahaina||22||13||15||13||18 (+3)||11 (-2)|
|Makawao||13||9||11||7||35 (+24)||4 (-3)|
|Napili/Kahana/Honokowai||11||6||9||3||13 (+2)||3 (-3)|
|Sprecks/Paia||8||2||7||3||9 (+2)||1 (-2)|
|Wailea||11||4||16||4||13 (-3)||6 (+2)|
|Wailuku||40||21||32||19||25 (-7)||25 (+6)|
Notable Numbers from the End of December Home Inventory
The information above is provided with the usual framework. The home inventory data by price point includes all of the island of Maui, but excludes the islands of Molokai and Lanai. The district information is limited to the districts and communities with the most activity.
- For the second month in a row, the inventory of active home listings increased on Maui. Active inventory increased 10.7%. A good portion of the bump in inventory can be traced to the 19 new developer listings in the Hoku’ula subdivision.
- Changes in active inventory varied by price point. Five price points increased in inventory, three decreased and one was unchanged. The price range with the biggest increase in inventory was between $1,000,000 and $2,000,000. Again, that was largely due to Hoku’ula. It was notable that the $750,000-$999,999 price range saw the biggest drop in active listings from the month prior. Inventory in that segment increased steadily in the the previous three months. With a higher percentage of financed buyers in this price point, the spike in interest rates earlier in the fall curtailed buyer demand.
- Overall Pending home inventory decreased from the end of November. The number of pending homes dipped 10.71% between November 30th and December 31st.
- By price point, pending sales increased in three price ranges, decreased in five and remained unchanged in three price points. The biggest increase in pending sales occurred in the $750,000-$999,999 range. Perhaps recent decreases in interest rates provided some relief to buyers in that price range. The biggest decrease in pending sales occurred in the $1,000,000-$2,000,000 price range.
- At a community level, inventory trends continued to vary. Inventory increased in 5 communities, decreased in 4 and remained unchanged in 5 districts. The biggest increase by far was in Makawao (the Hoku’ula effect) followed by Kihei. Wailuku inventory decreased the most.
- Pending sales decreased in most communities. Kihei pending sales decreased the most month to month. Wailuku experienced the biggest increase in pending sales.
End of December Maui Condo Inventory
|<$250,000||2||4||1||4||2 (+1)||2 (-2)|
|$250,000-$499,999||19||12||19||14||12 (-7)||16 (+2)|
|$500,000-$749,999||32||35||43||33||38 (-5)||25 (-8)|
|$750,000-$999,999||27||27||28||29||42 (+14)||27 (-2)|
|$1,000,000-$1,499,999||21||30||31||24||32 (+1)||21 (-1)|
|$1,500,000-$1,999,999||14||33||21||28||26 (+5)||29 (+1)|
|$3,000,000-$4,999,999||10||17||11||17||10 (-1)||18 (+1)|
|$5,000,000-$9,999,999||11||1||12||2||14 (+2)||0 (-2)|
|Total||154||200||187||190||198 (+11)||174 (-16)|
|Ka’anapali||18||9||25||4||22 (-3)||9 (+5)|
|Kahului||5||5||5||5||4 (-1)||3 (-2)|
|Kapalua||12||4||14||2||12 (-2)||3 (+1)|
|Kihei||43||60||53||61||61 (+8)||45 (-16)|
|Lahaina||8||4||14||8||11 (-3)||12 (+4)|
|Ma’alaea||3||6||4||8||5 (+1)||5 (-3)|
|Napili/Kahana/Honokowai||33||17||39||19||50 (+11)||16 (-3)|
|Wailea/Makena||19||85||23||85||27 (+4)||79 (-6)|
|Wailuku||11||10||8||8||4 (-4)||4 (-4)|
Notable Numbers from the End of December Condo Inventory
Again, the tables above come with the usual framework for our end of month inventory. The table by price point includes all condos on Maui, but it does not include condos on the islands of Molokai or Lanai. The table with districts is limited to the communities with the most activity.
Pending sales at La’i Loa at Wailea Hills skew the data in Wailea and the $1,500,000-$5,000,000 price ranges. There are 75 pending sales in that development based on contracts penned in 2020 and the first quarter of 2021. Pending sales in La’i Loa won’t start to close until sometime in the fall of 2023. Paradise Ridge Estates in Kihei also skews the data albeit to a lesser extent. There are 18 pending sales with that development based on contracts penned between 2018 and the first quarter of 2022. Overall, 53.44% of the current pending condo inventory is in La’i Loa or Paradise Ridge Estates.
- For the third straight month, end of month inventory of active condo listings grew. It increased 5.88% from the end of November.
- Looking at the inventory by price point, there continues to be a lot of variability. While most price points saw modest changes, the inventory of $250,000-$749,999 condos decreased by a decent margin. The inventory of condos priced between $750,000 and $999,999 increased substantially. There was also a bump in inventory between $1,500,000 and $1,999,999.
- End of the month pending condo sales dropped for the third straight time. Pending sales dropped 8.43%.
- Most price ranges saw a decrease in pending sales by the end of the month. The $500,000-$749,999 price range saw the biggest drop in activity followed by the $2,000,000-$2,999,999 price point.
- At a community level, most locations saw modest changes in inventory. There were exceptions. Kihei and the Napili, Kahana and Honokowai MLS district saw pretty big increases. Ka’anapali and Wailuku both saw notable decreases in inventory.
- Most communities saw a decrease in pending sales by the end of December. Kihei saw the biggest decrease in pending sales. While Wailea’s decrease was smaller, it is notable that the vast majority of the remaining pending sales are longer term contracts at La’i Loa. Only 4 of the 79 pendings in Wailea at the end of the month were condos outside of that development.
- The West Maui communities of Ka’anapali and Lahaina were both notable for their increase in pending condo sales.
How Quickly Are Things Going Under Contract
We started tracking the percentage of properties going under contract in ten days or less all the way back in February. At the time, the market was in a frenzy and 56% of all new listings went under contract within that first ten days of coming to market. We’ve seen things slow considerably since that time. I took a look at properties that came to market between December 13th and December 20th. Of the 35 listings that came to market, 25.71% went under contract within the first ten days. That is actually up from when we last checked in November when only 15.9% of all properties went under contract.
Looking specifically at homes, 20% of the homes listed between December 13 and 20th went under contract within 10 days or less. Last year during the same period, 15.38% of new home listings went under contract in 10 days or less. In 2019, 20% of homes went under contract in 10 days or less.
Of the condos that came to market between December 13th and 20th, 30% went under contract within 10 days. For perspective, 41.51% of all condos listed between December 13-20th, 2021 went under contract in ten days or less. In 2019, 15.22% of condos listed during that same time period went under contract in 10 days or less.
My biggest takeaway from these numbers is that we are well off the frenzy of 2021 and the first quarter of 2022. Response to new listings is closer to what we had pre-Covid. Back then, quality properties priced well tended to go quickly. That continues to be the case today. Unless there is a lot of push back from the readership or we see a clear shift in market conditions, I am going to retire this metric from future musings posts.
While market activity remained slow in December, it doesn’t seem to be fazing too many sellers. As of December 31st, only 33.33% of all active listings had one or more price reduction. That is down from 37.02% on November 30th and 39.92 on October 31st. It was all the way up at 42.21% in late September.
The condo market is seeing even fewer price reductions. As of New Year’s eve, only 25.25% of all active condo listings were reduced in price one or more times. That is down slightly from 25.53% on November 30th and 29.41% on October 31st.
I surmise that low inventory and seller hopes for a seasonal increase in buyers has led more seller to stick their guns on pricing.
Quick Thoughts On the Market as We Enter Maui Peak Buying Season
Needless to say, the trajectory of the market isn’t entirely clear at the start of buyer’s season. Inventory is up from last winter, but still well below normal. Demand is lower, but it should potentially increase just due to seasonality. Affordability is down significantly from this time last year, but there is still a lot of cash in our market and rates are better than they were earlier in the fall. Add it all together and it makes prognostication a challenge. About the only thing I feel comfortable predicting is continued variability in conditions by price range and by location around the island. We will continue to provide market observations as buyer season progresses on the blog.
A Little Maui Beauty
Contact The Maui Real Estate Team
With the uncertainty in the Maui Real Estate market, quality representation is more important now then ever. Contact the Maui Real Estate Team. Our experienced agents welcome the chance to discuss your real estate needs. We look forward to being of assistance.
Maui Real Estate Blog
Maui Market Musings Volume XIX
It’s been a few weeks since our last Maui Market Musings. With that in mind, this post delves into the numbers that help cast a light on current Maui market conditions. Since our last post, interests rates surged higher again putting additional pressure on affordability for some buyers. This post looks at what impacts if any higher rates are having on the Maui market. We also look at current inventory levels by price point and community. Other subjects for discussion include cancellations, price reductions and the recent market response to new listings. This is a longer read so you may want to grab your favorite caffeinated beverage before proceeding further. It is not advisable to operate heavy equipment after reading.
It’s hard not to lead with interest rates when discussing the state of the market. Rates continued their climb since our last update. While they fluctuate daily, they’ve been somewhere between 6.5% and just over 7% over the last few weeks. Needless, to say, we are a long way from the sub 3% interest rates we saw during periods of 2021. For those hoping that this increase is going to be short lived, the recent comments of Fed Chair Jerome Powell suggest that is unlikely to be the case. Powell said higher rates are needed to bring about a “correction” and balance to the housing market. While the Fed doesn’t directly control mortgage rates, they can exert a strong influence with changes to the Federal Funds rate.
Higher rates (even rates lower than current rates) were already impacting real estate markets around the country. Values are starting to retreat in many markets, particularly in some of the frothiest markets of the last couple of years.
So what kind of impact are we seeing on Maui from higher rates? There are a couple of numbers that we look at in this musings that might reflect the impact of higher rates. Pending sales is one with decreased affordability likely to impact the number of buyers. Price decreases is another metric that would or should reflect sellers adjusting to decreased buyer demand. Keep reading to see what those numbers look like recently on Maui.
Maui Home Inventory
|<$750,000||11||14||11||11||7 (-4)||14 (+3)|
|$750,000-$999,999||25||62||31||44||21 (-10)||46 (+2)|
|$1,000,000-$1,499,999||65||34||58||28||45 (-13)||33 (+5)|
|$1,500,000-$1,999,999||41||19||46||13||44 (-2)||17 (+4)|
|$5,000,000-$9,999,999||24||7||26||5||27 (+1)||6 (+1)|
|$20,000,000+||5||1||5||0||2 (-3)||1 (+1)|
|Totals||239||156||256||124||225 (-31)||140 (+16)|
|Hana||4||1||8||2||9 (+1)||1 (-1)|
|Kahului||13||21||11||25||7 (-4)||26 (+1)|
|Kula||19||16||24||10||22 (-2)||11 (+1)|
|Lahaina||18||14||23||7||21 (-2)||10 (+3)|
|Napili/Kahana/Hono…||10||6||14||4||9 (-5)||7 (+3)|
|Pukalani||7||6||8||5||6 (-2)||7 (+2)|
|Spreckelsville/Paia||10||2||15||3||10 (-5)||4 (+1)|
|Wailea/Makena||15||5||16||4||10 (-6)||8 (+4)|
|Wailuku||39||35||41||22||36 (-5)||26 (+4)|
End of September Home Inventory Review
The information above is provided with the usual framework. The home inventory data by price point includes all of the island of Maui, but excludes the islands of Molokai and Lanai. The district information is limited to the districts with the most activity.
- The inventory of active homes fell 12.2% between the last day of August and the last day of September.
- Active inventory decreased in all price ranges below $3,000,000. There was a modest increase in inventory between $3,000,000 and $10,000,000, no change between $10,000,000 and $19,999,999, and a decrease in inventory above $20,000,000.
- Pending sales activity increased 12.9% over last month! This is a surprising reverse of recent trends. It is an especially big surprise with the recent mortgage rate increases.
- The biggest increase in pending sales occurred below $2,000,000. Above that price range the number of pending sales was either steady or increased by one. No price ranges experienced a decrease in pending sales activity. It is worth noting that the $10,000,000 to $19,999,999 range had no pending sales as of the end of August and still has no pending sales.
- Looking at the different communities around the island, only two communities saw an increase in inventory. Haiku and Hana both saw modest increases in active listings. Anecdotally, it seems like some sellers in these windward communities try to get homes on to the market before the start of the rainy season later in the fall. I haven’t taken the plunge to determine if there is any quantitative evidence to support that claim.
- After seeing big growth in inventory in late Spring and early Summer, Kihei saw the biggest decrease in active inventory for the second month in a row. Notably, the total number of pending sales in Kihei did not change. With that in mind, I decided to look a little closer at the Kihei market activity. While Kihei added 8 new pending sales this month, 7 sales closed, 8 listings cancelled and 2 expired. Only 4 new listings came to market. Based on those numbers, the reason for the decrease in inventory is multi-faceted. The cancellations could be a sign of seller capitulation (more on that below) or just sellers taking a break. We shall see.
- Wailea and Wailuku are the two communities that saw the biggest increase in pending sales with 4 net new pendings. Wailea’s increase is a little more notable due to the percentage increase in pending sales. It’s worth mentioning that 4 of the 5 overall new pending sales in Wailea and Makena reduced prices before going under contract. There’s something to be said for listening to market feedback and adjusting price.
Maui Condo Inventory
|$250,000-$499,999||11||23||14||17||11 (-3)||16 (-1)|
|$500,000-$749,999||43||39||34||43||28 (-6)||40 (-3)|
|$1,000,000-$1,499,999||30||31||29||31||19 (-10)||36 (+5)|
|$1,500,000-$1,999,999||30||33||24||35||18 (-6)||34 (-1)|
|$2,000,000-$2,999,999||20||36||22||38||14 (-8)||43 (+5)|
|$3,000,000-$4,999,999||12||18||12||19||10 (-2)||17 (-2)|
|$5,000,000-$9,999,999||10||3||8||1||7 (-1)||0 (-1)|
|Totals||205||234||181||233||145 (-36)||222 (-11)|
|Ka’anapali||24||13||25||16||17 (-8)||14 (-3)|
|Kapalua||10||10||11||6||10 (-1)||4 (-2)|
|Kihei||67||60||50||63||48 (-2)||61 (-2)|
|Lahaina||16||8||9||10||5 (-4)||7 (-3)|
|Ma’alaea||5||6||3||6||4 (+1)||4 (-2)|
|Napili/Kahana/Hono||40||34||45||25||29 (-16)||30 (+5)|
|Wailuku||14||13||9||14||8 (-1)||12 (-2)|
End of September Condo Inventory Review
Again, the tables above come with the usual framework for our end of month inventory. The table by price point includes all condos on Maui, but it does not include condos on the islands of Molokai or Lanai. The table with districts is limited to the communities with the most activity. Pending sales at La’i Loa at Wailea Hills skew the data in Wailea and the $1,500,000-$5,000,000 price ranges. There are 75 pending sales in that development based on contracts penned in 2020 and the first quarter of 2021. Pending sales in La’i Loa won’t start to close until sometime in 2023. Paradise Ridge Estates in Kihei also skews the data albeit to a lesser extent. There are 18 pending sales with that development based on contracts penned between 2018 and the first quarter of 2022. Overall, 41.89% of current pending sales are long term new developer contracts.
- The number of active condo listings at the end of September is 19.89% lower than at the end of August.
- Active inventory decreased in seven out of ten price ranges in the table above. Net inventory was unchanged in the remaining 3 ranges.
- Pending condo sales dropped 5.2% compared to the end of August. Is this a reflection of reduced inventory, reduced demand or both? It’s hard to say. That said, I did get a surprising number of e-mails last month from fellow Realtors seeking out condo inventory for buyers struggling to find what they want.
- Pending sales dropped in seven of ten price ranges. Pending sales increased between $1,000,000-$1,499,999 and $2,000,000 and $2,999,999.
- Ma’alaea is the only community where inventory increased last month albeit with just one more active listing than at the end of August. Kahului’s inventory is unchanged.
- Napili, Kahana and Honokowai experienced the biggest decrease in inventory with 16 fewer listings at the end of this month. It was also the only community where pending sales increased. The eighteen new pending sales shows pretty healthy activity. It seems that the increase in pending sales is the biggest driver for the decrease in active listings in this market, but cancelled listings were also a factor. Seven sellers pulled their listings off the market.
September is a transitional month on Maui. The summer tourism season is over and we are still a few months from our peak winter season. Anecdotally, I always thought of this as a month where some sellers will opt to take a pause from selling their home only to relist when it gets closer to winter tourism season. With the sharp decrease in active listings this month, I wanted to look closer at cancelled and expired listings. Is September actually a bigger month for cancellations historically? If so, how does this year compare to previous years? Is there anything that can be gleaned from this September’s high cancellations?
|September||40 (1)||28 (2)||39 (t6)||50 (1)||41 (11)|
|September||29 (1)||13 (11)||43 (t2)||44 (3)||41 (11)|
Before discussing the numbers above, it is worth noting that there is some noise when it comes to cancelled listings. An agent changing brokerages or one brokerage buying another can inflate cancelled listings. The change in brokerages results in cancelled listings immediately replaced by new listings as old listing contracts are cancelled and new contracts created. I noticed some noise in this month’s cancelled home listings. Hoku’ula, a new development Upcountry, cancelled their MLS listings last month and put them back on the market as new listings at a higher price.
With that framework, let’s address the first question that I posed above. Is September a bigger month historically for cancellations? It appears to be one of the biggest months for canceled home listings albeit with some notable exceptions in the chart above. For condos, it is a little more extreme. Some years it is near the top and others near the bottom with no clear cut reason for the variability.
So what does that say about this year? Even without those five Hoku’ula cancellations, September would still be the highest month for home cancellation for the year to date. September is also leading for cancelled condo listings despite rather limited inventory. It’s hard to say definitively if this is strictly seasonal or if any of those cancellations are due to seller capitulation. That said, it would make sense if we start to see some sellers retreat from the market for non-seasonal reasons. Sellers who were fishing for ultra high prices, don’t need to sell or need to borrow at higher rates to buy a new place could all have reason to pull their listing under current conditions.
Recent increases in interest rates are generating more price reductions nationally. Sellers are reacting to the decreased affordability posed by higher rates. What about the Maui market? Are we seeing similar trends? I looked at price reductions for active inventory on September 29th.
As of the 29th, 95 out of 224 active listings or 42.41% of all properties reduced their price one or more times. As of September 2nd, that numbers was 42.97%. On August 15th, it was 39.67%. While price reductions are up since the early summer, the more recent decrease in price reductions is somewhat surprising in light of the recent increases in rates.
On the condo front, 36 out of 144 active listings reduced their price one or more times. That calculates to 25% of active inventory. That is down from 27.84% on September 2nd and 29.62% of all listings on August 15th.
With inventory shrinking, perhaps sellers are feeling emboldened to stick to their guns on pricing. The higher level of cash and or low inventory levels seem to be making this market less responsive to interest rate changes thus far.
How Quickly Are New Listings Going Under Contract?
Another metric we continue to watch in the musings is how quickly things are going under contract. Specifically, what percentage of listings are going under contract within 10 days or less. We started tracking this in mid-February when the number was right around 56%. That was pretty much the peak of our winter frenzy. For properties that were listed between September 12th and 19th, 34% of all listings went under contract within 10 days. That is actually up from 29.79% between August 10th and 17th.
For home listings, 32.14% of new listings between September 12th and September 19th went under contract within 10 days or less. By comparison, 38.1% of all homes listed between 9/12/21 and 9/19/21 went under contract in 10 days or less. For a pre-covid comparison, 41.18% of all homes listed between 9/12/19 and 9/19/19 went under contract within 10 days or less. It is worth mentioning that 41% is a much higher percentage than other weeks we’ve looked at in 2019. For example, only 19.04% of homes listed between 9/27/2019 and 10/3/2019 went under contract in 10 days or less.
For condo listings, 36.36% of all new listings went under contract within 10 days between September 12th and 19th. Last year, an eye popping 67.74% of condos listed between 9/12 and 9/19 were under contract in ten days or less. In 2019, 27.27% of all condos listed between 9/12 and 9/19 went under contract within 10 days or less.
Overall, the market is way less frenzied than last year. However, properties are going under contract faster than in a “normal” Maui market. There are definitely fewer buyers, but there are enough buyers out there for the limited supply that over one third of the inventory is going under contract quickly.
A Few Closing Thoughts on the State of the Maui Market
The numbers compiled above paint a picture of a more resilient Maui market than one might expect. We actually saw fewer price reductions for homes and condos while pending home sales increased! Not exactly the market response one would predict when interest rates increase to their highest point in 15 or more years. It appears at this point that limited inventory is still having a significant impact on the market despite the rising borrowing costs.
Will that sustain itself through the rest of the year and into early 2023? I was suprised by this month so who knows what the future will hold. It’s likely that the market has yet to feel the full weight of higher interest rates. Add in signs of a slowing economy and our market is facing additional headwinds. Ultimately, the Maui market moving forward will be a balancing act between the impact of higher rates and supply constraints. Conditions well vary around Maui by both price point, location and property type.
With interest rates likely to remain elevated into the immediate future, more real estate economists are anticipating price corrections. Reading beyond the headlines, economists expect variability in market corrections across the country. Rates will be a market driver, as will the state of the economy and local inventory. It’s important not to base market decisions on national headlines, but instead on relevant local data. We plan to continue with our Musings and community market updates so Maui buyers and sellers have the data to make informed decisions.
A Little Maui Beauty to Brighten Your Day
Contact The Maui Real Estate Team
Questions about the post above? Wondering about conditions in a specific part of the Maui Market? Need assistance buying or selling a property on Maui? Contact The Maui Real Estate Team for assistance. One of our experienced and savvy agents would welcome the chance to sit down with you to discuss your real estate needs.
Maui Real Estate Blog
Maui Market Musings Volume XIII
It’s the beginning of a new month and the end of the first half of the year. Milestones like that typically call for a look back at first half of the year stats. That said, the market in the first quarter of the year is a lot different than the market now. While we intend to look at the June sales numbers in the next musings, the focus of this edition is on statistics that are more relevant to current conditions. The three main statistics reviewed in Volume XIII include inventory, price reductions and the number of properties going under contract within ten days of coming to market.
Inventory Watch for Single Family Homes
At the end of May, we started documenting end of month inventory for different communities and price points. We did it again on the last day of June. The intent is to track inventory at a more granular level than the island wide inventory statistics released by the local Realtor’s Association.
|May 31, 2022||June 30, 2022|
|$750,000-$999,999||19||54||32 (+13)||63 (+9)|
|$1,000,000-$1,499,999||43||37||58 (+15)||34 (-3)|
|$1,500,000-$1,999,999||30||27||44 (+14)||22 (-5)|
|$2,000,000-$2,999,999||37||14||34 (-3)||15 (+1)|
|$3,000,000-$4.999,999||24||11||27 (+3)||10 (-1)|
|$10,000,000-$19,999,999||9||2||13 (+4)||0 (-2)|
|Totals||193||176||241 (+48)||169 (-7)|
|May 31, 2022||June 30, 2022|
|Haiku||15||12||20 (+5)||13 (+1)|
|Hana||5||3||4 (-1)||2 (-1)|
|Ka’anapali||13||6||11 (-2)||7 (+1)|
|Kahului||11||24||8 (-3)||27 (+3)|
|Kapalua||4||2||5 (+1)||3 (+1)|
|Kihei||27||25||45 (+18)||22 (-3)|
|Kula||24||12||25 (+1)||13 (+1)|
|Makawao||11||17||13 (+2)||12 (-5)|
|Pukalani||5||12||12 (+7)||7 (-5)|
|Spreckelsville /Paia||12||4||11 (-1)||2 (-2)|
|Wailea/Makena||8||5||13 (+5)||4 (-1)|
|Wailuku||28||32||39 (+11)||33 (+1)|
End of June Home Inventory Overview
Here are a couple of quick notes about the data above to provide some framework. The price ranges cover all of Maui. They do not include the islands of Lanai or Molokai. The list of districts above is limited to those with the most activity.
- The overall trends on inventory are pretty clear with just under a 25% increase in active listings and a 4% drop in pending sales over the last month. A substantial spike in interest rates provided the backdrop for this shift in active and pending sales.
- Honing in on various price points, you can see a little more variability in the market.
- Active inventory below $750,000 remained unchanged while pending sales decreased.
- When you bump up to the $750,000-$999,999 range, inventory increases are substantial, but it is also the price range with the largest increase in pending sales activity.
- The $1,000,000-$2,000,000 range saw a significant increase in active listings with a drop in pending sales activity.
- The luxury home market experienced more modest increases in inventory and the decline in pending sales is less significant.
- The variability in numbers at a district level is a little more of a head scratcher.
- Kihei inventory grew the most with a 66% increase in active homes for sale.
- Neighboring communities saw different trajectories in inventory. Kahului’s inventory fell while the number of active homes in Wailuku grew almost 40%.
- Within the luxury markets, Wailea and Makena experienced a pretty healthy bump in inventory. Kapalua has one more active home listing while active inventory in Ka’anapali is down.
Inventory Watch for Condos
|May 31, 2022||June 30, 2022|
|<$250,000||5||9||2 (-3)||8 (-1)|
|$250,000-$499,999||12||23||19 (+7)||25 (+2)|
|$500,000-$749,999||18||55||31 (+13)||40 (-15)|
|$750,000-$999,999||29||54||44 (+15)||46 (-8)|
|$1,000,000-$1,499,999||23||49||29 (+6)||30 (-19)|
|$2,000,000-$2,999,999||19||40||20 (+1)||36 (-4)|
|$3,000,000-$4,999,999||12||22||11 (+1)||25 (+3)|
|$5,000,000-$9,999,999||7||7||11 (+4)||3 (-1)|
|Totals||149||293||199 (+50)||247 (-46)|
|May 31, 2022||June 30, 2022|
|Kahului||5||8||4 (+1)||3 (-5)|
|Kapalua||7||15||12 (+5)||9 (-6)|
|Kihei||35||95||55 (+20)||74 (-21)|
|Lahaina||14||8||16 (+2)||5 (-3)|
|Napili/Kahana/Hono…||34||39||48 (+14)||34 (-5)|
|Wailea||16||91||23 (+7)||85 (-6)|
|Wailuku||9||11||12 (+3)||12 (+1)|
End of June Maui Condo Inventory Overview
As with the home market, the price points table includes all condos on Maui, but it does not include condos on Molokai or Lanai. The table with districts is limited to the districts with the most activity. As mentioned in the last Musings, pending sales at La’i Loa at Wailea Hills skew the data in Wailea and the $1,500,000-$5,000,000 price ranges. There are 75 pending sales in that development based on contracts penned in 2020 and the first quarter of 2021. Those pending sales won’t start to close until sometime in 2023.
- The increase in condo inventory between May and June is more pronounced with a 33% jump in active condo listings. Pending condo sales dropped 16%.
- Honing in on the different price points, all price ranges with the exception of condos priced below $250,000 experienced an increase in active inventory.
- The biggest increase occurred in the $500,000 to $749,999 price range.
- On the pending sales front, all but three price ranges had a decrease. The $250,000 to $499,999 price range saw a modest increase. The number of pending condos sales stayed the same from $1,500,000 to $1,999,999. The $10,000,000 plus condo market remained unchanged with no pending listings.
- Looking at inventory from a district level, active inventory increased in all communities except for Ka’anapali.
- Ka’anapali condos are the outlier when it comes to resort condo inventory. Kapalua inventory increased 71% and Wailea inventory increased 44%. It is worth noting these increases are coming from near historic lows in inventory. That 71% increase in condo inventory in Kapalua is due to just 5 more listings.
- Other notable increases in inventory occurred in the markets that were the busiest earlier this year. Kihei active condo inventory increased 57%. Napili, Kahana and Honokowai active listings increased 41%.
As of July 4th, 34.03% of all active home listings on Maui reduced their asking price one or more times. That compares to 33% on May 24th and 29.5% on June 7th. After seeing a small dip in price reductions in early June, those numbers appear to be rising again.
For condos, 24.63% of all active condo listings reduced their price one or more time. The increase in price reductions is steady. The percentage of active listings that reduced price was 18.2% and 20.9% on May 24th and June 7th respectively.
It’s important to note that the higher number of price reductions isn’t indicative of decreasing values at this point in time. In many cases, this is sellers who priced ambitiously adjusting to the realities of a shifting market.
Market Response to New Listings
Another metric that we’ve tracked in our market musings is the percentage of new listings going under contract within 10 days. We started to track this in mid February, a time period when competition for inventory remained incredibly strong. At that time, 56% of all new listings were under contract within 10 days. As posted in Musings XI, that number dipped to 35.54% for the period between May 18th and May 25th. For the period between June 14th and June 21st, the number dropped to 25.37%.
While the number above shows a pretty significant cooling of the market, context is key. Between June 14th and June 21st of 2019, only 17.28% of all listings went under contract within the first ten days of coming to market. There are still buyers out there acting quickly when well priced properties come to market.
Takeaways for Buyers and Sellers
When interest rates spiked over 6% in early June, the hyperbolic takes on the real estate market came fast and furious. The crowing of the bubble watchers became deafening. In places like Boise and Phoenix, it looks like there may be some drastic shifts in the market. That said, what’s true for Boise may not be true for Maui. Our goal is to strip out the hype so buyers and sellers can make informed decisions.
To be clear, the Maui Market continues to cool down from the frenzied market of earlier this year. While inventory is growing, the growth in inventory started later than most markets on the mainland. We are still seeing inventory levels well below normal. While pending sales are decreasing, the percentage of properties going under contract in ten days or less is higher than during the same period of 2019. As the numbers above show, market conditions are showing variability based on location and price points. Where you are buying or selling in the market will impact your experience.
Buyers shopping in most price points will appreciate the increased inventory compared to the scarcity of earlier this year. While competition is down, well priced properties may still see bidding wars. This is particularly true at the lower priced points of the market where inventory remains truly scarce.
Prospective sellers will want to look closely at conditions specific to their price point and community when pricing their property. In those areas where inventory is growing the most and demand is shrinking, you will want to be particularly mindful of not overpricing your property. Sales will likely take longer. With buyers largely moving out of the FOMO mentality, a little give and take may be necessary to get deals done.
Some Maui Beauty to Brighten This Post
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Questions about the market or this post? Thinking of buying or selling? Contact The Maui Real Estate Team. We look forward to being of assistance.
Maui Real Estate Blog
Sneak Peek at the April 2014 Maui Real Estate Stats
I begin this post with a humble apology. Last month was the first time that we have failed to provide some version of the monthly Maui Real Estate stats since 2008. For those that have come to expect this place to be the first resource to go for getting a pulse on the Maui market, I apologize for letting you down. If you didn’t see last month’s stats via another media outlet, here is a link to the Realtor Association of Maui March Stats. I will try to redeem myself with an expanded post that includes a cornucopia of Maui market numbers. April is a month of transition in Maui. It is the end of whale season, peak tourism season and peak real estate season. The real estate sales figures are typically pretty strong as we see lots of closes from properties that went under contract earlier in peak buyer season. Keep reading to see the April sales volume and median numbers, a few interesting numbers and tidbits from among this month’s closes, a broader look at the first four months of the year, some forecasting as to what we may see for sales in the coming months and a few other thoughts on the Maui market. Without further ado, here are the numbers.
By my count, there were 84 home sales reported in April with a median sales price of $583,000. By comparison, last April there were 79 home sales with a median price of $470,000. That is a 6% increase in sales volume over last April and a 24% increase in median.
There have been 134 condo sales reported for April with a median price of $403,500. There were 144 sales reported last year with a median price of $370,000. That is a 7% decrease in sales activity and a 9% increase in median prices.
There have been 19 land sales reported to date for April of 2014 with a median sales price of $510,000. Last April, there were 14 sales reported with a median price of $479,500. That is a 35% increase in sales volume and a 6% increase in price when comparing this April to last April.
These are preliminary numbers, we may see some additional sales reported from the end of the month in the next couple of days. While compiling the numbers above, I found a few other numbers that I thought were worth sharing.
- The highest priced home sale in May was a beautiful estate in the Makena Papa’anui subdivision located just above Makena Landing. The home with stunning ocean views and infinity pool closed for $6,850,000.
- That was one of six sales over $2,000,000 in April. There was one other sale in Makena Papa’anui, three sales in The Pineapple Hill Neighborhood of Kapalua and one Oceanfront home in Haiku.
- The highest priced condo transaction for the month was located at the Honua Kai Resort. One of the premier three bedroom units in the complex closed for $5,200,000.
- This was one of six condos that closed for $1,500,000 or higher in April. There was one other sale at Honua Kai along with sales at Kai Malu, Hoolei, Wailea Beach Villas and Ka’anapali Ali’i.
- There were only 9 bank owned (REO) closes last month. In April of 2013, there were 13 REO sales. This remains a pretty limited market segment and it seems as if a good number of the REOs that enter the market are being priced fairly high by the banks. With a limited inventory of lower priced homes, banks are trying to get more money for their assets.
- There were 10 successful short sale transactions this April compared to 15 in April of 2013. While I expect the slow drip of bank owned properties to continue, I suspect we may see the number of short sales continue to shrink under current market conditions. Better equity conditions for sellers and stiffer tax liabilities for owner occupants who complete short sales are going to reduce the impact of this type of sale.
This months stats were almost directly the inverse of last month’s stats and the overall trends for the year. Home and land sales were higher in April of 2014 than they were in April of 2013. Condo sales were down compared to last April. Overall for the year, we have seen higher condo sales while both land and home sales have been lower. I wouldn’t read too much into one month’s trends as we are likely just seeing some of the variability we tend to see with Maui’s smaller sample size of transactions.
As we tend to point out in our stats posts, it is important not to paint with too broad of a brush in Maui. Sales activity varied by community and price point around the island. Some communities are seeing more activity than last year. Some are seeing less than last year, and some are seeing almost the same. Here are some of the markets that are seeing some of the biggest differences in sales activity between this year and last year.
- Haiku residential sales are down 21% (four units) compared to the first four months of 2013. That reduction can be attributed entirely to a decrease in inventory and activity at or below the median with four fewer sales below $600,000.
- Pukalani has seen a 43% decrease in residential activity compared to the first third of 2013. This appears to be another community where reduced inventory is impacting sales. There were far fewer sales in Pukalani under $500,000 this year compared to the first four months of last year.
- Wailuku sales are down 16% (7 units) compared to the first four months of 2013. This was also driven in part by a decrease in inventory and sales below $500,000.
- Makawao residential sales are up 55% (6 units) compared to last year. This surge was based on an increase in activity at higher price points. There were 7 more sales over $500,000 compared to the same time last year.
- Kapalua sales are up 150% (3 units) compared to the first 4 months of last year. This is a pretty small sample size which makes the number a little more dramatic.
- Kihei condo sales are up 22% (30 units) over the first four months of last year. This increases has occurred despite a pretty sharp drop in inventory below $200,000. The biggest increase in sales activity occurred between $250,000 and $500,000 with more modest gains above $500,000.
- Condos in the West Maui Communities of Napili, Honokowai and Kahana were up 19% (11 units) over the first part of 2013. This community was somewhat anomalous in that there were more gains at lowest price points rather than the middle and higher price points.
- Wailea saw the biggest dip in condo sales with a 22% (9 units) decrease in sales volume compared to the first four months of 2013. With a couple of new developments on the horizon in Wailea, we may be seeing some buyers deferring purchases as they wait for opportunities to purchase new construction condos.
I also thought it was worth looking at changes in sales activity by price points during the first four months of the year.
- Home sales under $500,000 were down 26% (36 units) compared to the first 4 months of 2013. This is a clear case of decreasing inventory impacting volume.
- Home sales from $500,001 to $999,999 were up by 2.8% (3 units) compared to first third of 2013.
- Home sales were up 54% (22 units) in the $1,000,000 and up price range. The high end market appears as if it is continuing to gain steam after a relatively strong 2013.
- Condo sales priced $250,000 and under were down 21% (22 units). This is a case of shrinking inventory.
- Condos priced between $250,001 and $499,999 are up 28% (49 units). This is due to a combination of appreciation in the market and a general increase in activity.
- Condo activity between $500,000 and $999,999 was up modestly at 9% (9 units).
- Condo sales between $1,000,000 and $1,499,999 was up 22% (6 units).
- Condo sales from $1,500,000 and above were up 45% (9 units). This is pretty impressive as this market segment was up significantly in 2013 over 2012.
The numbers above would seem to indicate that recent market activity is being dictated in part by available inventory. The only part of the market that is seeing less activity is the part that has seen inventories decrease the most in the last year. There are buyers looking at lower price points, but they aren’t finding the properties that they want. The increase in activity at the higher price points also accounts for some of the increases we are seeing in median prices. It is a combination of price increases and more high priced transactions that are causing the jumps in medians. Don’t mistake increases in medians as a true reflection of increases in values.
While sales are a reflection or recent market demand, the number of properties under contract better illustrates current market demand. As we have been moving out of peak buyer season, the total number of pending properties has been dropping steadily. This is a little different than what we have seen in the last few years when the momentum of peak season carried into May. The chart below compares the number of homes, condos and parcels of land that went under contract in April with the number that went under contract in April of 2013.
The numbers show a pretty sharp dip in both homes and condos. It will be worth keeping a close eye on May pending sales to see if we are seeing something of a trend or if this month is just an anomaly.
What does all of this mean for buyers and sellers? Buyer and seller strategy is going to be dictated in part by community and price point. That said, there are a few statements applicable to all geographies. Entry level buyers are going to find a limited inventory and competitive market. Getting pre-approved for financing is a must prior to starting your search. When you find a property that you like that is well priced, decisive and fast action is typically necessary. Some of the higher price points in the market offer a broader range of inventory, but seller motivation tends to go down. Buyers may find that the staying power of luxury home owners can undercut their leverage even in markets with lots of inventory. Sellers who need to sell in quick fashion will need to look closely at recent comparable sales and the level of market activity around their price point. Over priced properties are sitting in this market. Current market conditions can be challenging for both buyers and sellers. The Maui Real Estate Team would welcome the chance to sit down for a free consultation to discuss your real estate needs and how we might be able to help you navigate the market. Contact the Maui Real Estate Team today to get started.