At the end of May, I did a year to date comparison of Maui’s Luxury real estate market comparing the 2008 numbers to the 2007 numbers. With yesterday being the first day of fall, I figured now would be another good time to take the pulse of the market. Through the first five months of the year, the luxury market showed that it was more resilient than the rest of the Maui Real Estate market. Some segments of luxury were performing better than 2007, others were staying the same and those that had performed worse were still doing better than the overall market. Now that we almost 3/4 of the way through 2008, where do we stand? Let’s check out the numbers and see what they say. As with my May comparison, I broke the luxury market into four categories with two each for homes and condos. Here are the numbers:

• Homes between 1,500,000 and $4,999,999

Sales between January 1, 2007 -> September 22, 2007 = 83

Sales between January 1, 2008 -> September 22, 2008 = 50

• Homes above $5,000,000

Sales between January 1, 2007 -> September 22, 2007 = 12

Sales between January 1, 2008 -> September 22, 2008 = 11

• Condos between $1,500,000 and $4,999,999

Sales between January 1, 2007 -> September 22, 2007 = 75

Sales between January 1, 2008 -> September 22, 2008 = 131

• Condos above $5,000,000

Sales between January 1, 2007 -> September 22, 2007 = 4

Sales between January 1, 2008 -> September 22, 2008 = 1

These are some interesting numbers worth a few thoughts, comments and questions on my part. I wanted to take a look at properties over $5,000,000 first. It appears that this segment of the market has seen the least amount of impact in our changing real estate market. The 11 homes sales to date this year vs. the 12 over the same span in 2007 is basically a wash. People are still buying ultra luxury properties. That being said, the sales this year do not appear to be quite as high profile. There are two sales this year over $9,000,000. That compares to five sales over $9,000,000 over the same span last year. It is also worth noting that there is a little less activity in the Kapalua and West Maui markets. There are four sales on that side of the island year to date vs. seven over the same span last year. Statistically, condo sales are down this year in the ultra luxury market. We have only one sold this year vs. four over the same time frame last year. Then again, it is hard to account for the impact of new luxury condo developments in this market. The new developments at the Ritz in Kapalua, Baccarat, the Villas at Royal Lahaina and Maluaka all are taking reservations on condos in the $5,000,000 to $10,000,000 range. With no data on reservations or contracts on any of these new developments, it is tough to get a true sense of the state of the ultra luxury condo market. I don’t think it is out of line to assume that some of the buyers in this market may be opting to make reservations at one of these new luxury developments.

The market between $1,500,000 and $4,999,999 is particularly interesting statistically. Condo sales are way up and home sales are down. What gives? Let’s take a look at condo sales first. Condo sales are up 82% compared to last year. This is a pretty impressive number. What is the big driver for the increase in sales during a down market? The answer to that question is actually pretty easy. This market is seeing a big boom due to new project sales. Of the 131 sales during this time period, there were 83 new project sales. Sales at Kai Malu, Papali and Ho’olei help bolster sales numbers. This compares to only 26 new project sales over the same time fame in 2007. New project sales are usually based on contracts and reservations made one to two years in advance of closing. This means they can skew your perspective on the current state of the market. When you strip out new project sales, the numbers for 2008 and 2007 are 48 and 49 sales respectively. This changes the picture. It points to a 2008 market that is holding up well, but not surging ahead as the numbers might indicate. As with the $5,000,000 and above range, there are likely to be some buyers who are opting to make reservations at new developments. All of the same new developments have condos available in this range as does Honua Kai resort. These reservations are not reflected in these numbers.

Home sale numbers for 2008 between $1,500,000 and $4,999,999 are not as strong. There is almost a 40% drop in volume. This segment of the market appears to be performing worse than the overall home market for Maui. Home sales volumes have dipped 22% through September 1 vs. the same time last year. Why is this segment doing worse? That is a good question and one I thought might requiring picking at the numbers in a little greater detail. The price range between $1,500,000 and $4,999,999 is pretty broad. Are all segments of this price range performing the same? I thought it might be worth cutting this segment of the market up into smaller segments. The split is somewhat subjective on my part based on my observations on buyers. The $1,500,000-$2,000,000 is generally a separate pool of buyers from the $2,000,000-$3,000,000 buyer which is different from the $3,000,000 – $5,000,000 buyer.

• Homes between $1,500,000 and $1,999,999

Sales between January 1, 2007 -> September 22, 2007 = 33

Sales between January 1, 2008 -> September 22, 2008 = 15

• Home sales between $2,000,000 and $3,000,000

Sales between January 1, 2007 -> September 22, 2007 = 31

Sales between January 1, 2008 -> September 22, 2008 = 20

• Homes between $3,000,000 and $4,999,999

Sales between January 1, 2007 -> September 22, 2007 = 19

Sales between January 1, 2008 -> September 22, 2008 = 14

When you look at these numbers, it is clear that the lower you are in this price range the more drastic the decrease in sales volume. The price range between $1,500,000 and $1,999,999 is seeing the most acute down turn. The big question is why? While I can’t say definitively, I will venture a guess that this price range is feeling the changes in the mortgage market more so than other segments. Not only have the rates for jumbo loans gone up, but qualification standards have increased. Stated income requirements may also have knocked out some buyers. As you go up in this price range, dependency on conventional mortgages decreases. More buyers are either paying cash or using private banking.

Overall, the luxury market continues to be out performing other segments of the Maui Real Estate market. When you compare the current numbers vs. the last luxury real estate update from May, the market has slowed. This is in line with the overall market where the summer stats were the slowest they have been in well over five years. It will be interesting to see how the market performs the rest of the year. Traditionally, fall is a slow time while December will see a smaller flurry of luxury activity. We will keep you up to date on the Maui luxury market on THE Maui Real Estate blog.

We saw the second highest sales price ever for a property in Paia today. The 1.1 acre oceanfront parcel sold for $4,500,000. The property includes an older 3 bed/1 bath home and an older 1/1 care takers cottage. However, this is more of a land purchase than a home purchase. The highest ever sales price for Paia is located in the same neighborhood. It sold in December for $5,850,000. The third highest ever sales price was also in the same neighborhood. It sold in 2005 for $4,250,000. Both were newer oceanfront luxury homes on smaller lots.

There are still luxury buyers in this market. I did a series of blog posts on the status of the Maui luxury market in late spring and throughout the summer. I looked at the overall market and individual communities comparing sales volume in 2008 year to date vs. the same period of time in 2007. Now that summer has wrapped up, I will do another post on luxury market statistics sometime in the next week.

As a part of my continuing review of the various Maui Luxury Real Estate markets, I wanted to take some time to look at the performance of the ocean and beachfront real estate market on Maui. I have previously done an overall luxury real estate market update, a North Shore and Upcountry luxury update, a Wailea update, a Kapalua update and a Ka’anapali Update. When people speak of luxury homes on Maui, oceanfront properties are one of the first things that comes to mind. While there are many amenities that are valued in luxury homes, it is hard to beat the sights and sounds of having the ocean out your back door. This post compares year to date sales of oceanfront homes and high end oceanfront condos with last year’s sales over a similar time span.

• Beach and Oceanfront Home Sales

Sales between January 1, 2007 -> August, 9 2007 = 10
Sales between January 1, 2008 -> August 9, 2008 = 8

• Beach and Oceanfront Condo Sales over $2,000,000

Sales between January 1, 2007 -> August 9, 2007 = 28
Sales between January 1, 2008 -> August 9, 2008 = 16

Here are some thoughts and additional details behind the numbers above. Regarding home sales, the number shows a 20% drop vs. 2007. This suggests oceanfront homes are performing just a little better than the overall home market on Maui where sales have decreased 22%. These numbers would have a little more significance if the sample size for oceanfront home sales were larger.

At a more granular level, sales in 2008 ranged from a low of $600,000 to a high sales price of $10,500,000. The low was a modest home on a small lot in Hana. It still represents a pretty extraordinary value for an oceanfront home in Maui. The $10,500,000 sale was of a luxurious estate on the ocean in Makena. The highs and lows for ocean and beachfront homes in 2007 range from $2,250,000 to a whopping $19,200,000. The $2,250,000 sale was for a relatively modest oceanfront home along front street in Lahaina. The high sale was for an estate property on 1.69 acres in Makena. This is a big chunk of land for Makena oceanfront. This sale is the highest residential sale in Maui to date. It is hard to compare home values year to years as these properties are tremendously varied in size, location and finishing.

Regarding the condo figures, it is probably best to start with the reasoning behind the $2,000,000 threshold. Fee simple oceanfront condos start in price around $300,000 and make their way up. You can find a luxurious condo on the water for well under $2,000,000, but the condos in this price range really start to distinguish themselves. They may be notable for location, view, size, amenities or more than likely a combination of the above factors. On to the numbers, it looks like we had a pretty substantial drop from year to year. The numbers show a 43% decrease in sales volume. This is a far sharper drop off than the 20% drop we have seen for condos island wide.

Why the big discrepancy? Some of this can be attributed to new project sales. In 2007, we saw 9 sales at Wailea Beach Villas. These were either new project sales or new project flips. If you strip out these numbers, the difference starts to shrink. New project sales play a factor in other ways as well. Those that are shopping for luxury beach and oceanfront condos on Maui in 2008 have a number of new projects under construction to consider. Maluaka, Baccarat, the Villas at Royal Lahaina, the Ritz Carlton Kapalua and Honua Kai all have condos available for $2,000,000 or more. There have been properties going under contract at these high end resorts, but sales won’t start to record until next year at the earliest. Another thing to consider is that this has been a big year for luxury new project sales located off the water. Ho’olei and Papali Wailea have both had a considerable number of sales over $2,000,000. When you consider all of those factors, the big sales drop may not be that significant, or at least is is a poor indicator for luxury condo market activity.

There is a nice range of inventory to choose from for oceanfront and beachfront homes and condos on Maui. Check out MauiRealEstate.com to see all of the current Maui Oceanfront Homes for Sale and Maui Oceanfront Condos for Sale. Contact us directly for additional assistance.

Over the last few months, I have been giving updates on the Maui Luxury Real Estate Market. I started with an overall view and have since provided updates on Wailea, Kapalua and the combined North Shore and Upcountry luxury real estate markets. Today, I am going to take a look at Ka’anapali and its luxury market comparing 2008 year to date performance vs. the same span in 2007. Specifically, I am comparing overall homes sold and condos sold for more than $1,000,000. Ka’anapali is West Maui’s original resort community. It is renowned for both its golf and its world class beaches.

• Ka’anapali Home Sales

Sales between January 1, 2007 -> July 30, 2007 = 14
Sales between January 1, 2008 -> July 30, 2008 = 11

• Kaanapali Condo Sales over $1,000,000

Sales between January 1, 2007 -> July 30, 2007 = 52
Sales between January 1, 2008 -> July 30, 2008 = 16

Here are some thoughts on the stats. The home market is off 21% in volume from last year. Comparatively, island wide home sales volume is off 27% through the end of June. This appears to support the notion that the luxury market is weathering the current slow down a little better than other parts of the market.

The condo numbers are a bit of a shocker. We have seen a 69% drop in volume from last years numbers. This is obviously a sizable decrease. What makes these numbers interesting is that it does not follow trends in other luxury markets around the island. Kapalua saw a more modest decrease in volume of 27% while Wailea actually saw an increase in sales volume. Wailea’s increase in volume was not insignificant. What does this all mean? Frankly, I am not sure what accounts for the difference and anything I would proffer would be little more than a guess.

For those that are in the market for Ka’anapali Luxury Real Estate, there is pretty good inventory available on the market. Check out MauiRealEstate.com to see the current inventory of Ka’anapali Homes for Sale, Kaanapali Condos for Sale and Land for Sale. Contact us for additional information on Ka’anapali Luxury Real Estate.

Billy had a nice close in the Pineapple Hill area of Kapalua yesterday. The 4,125 square foot executive home with pool and beautiful ocean views closed for $2,400,000. With the recent closem I thought it was worth taking a look at the year to date sales in Kapalua and how they stack up with last year’s numbers. This is a continuation of the luxury market updates I have been providing on the Maui Real Estate Blog. I have already done updates on the North Shore and Upcountry market, Wailea and the overall Maui Luxury Real Estate Market.

Kapalua draws visitors and home buyers from all over the globe. Owners value the area’s stunning natural beauty, pleasant climate, world class golf and resort amenities. It is a smaller resort area than Wailea and a smaller inventory of real estate. The entry point in to the market for homes is higher than Wailea while the entry point of condos is about comparable. Since the inventory is smaller, I am not going to break the homes and condos into different price categories. I will make a couple of observations on the different price ranges in my notes.

• Kapalua Home Sales

Sales between January 1, 2007 -> July 12, 2007 = 7
Sales between January 1, 2008 -> July 12, 2008 = 5

• Kapalua Condo Sales

Sales between January 1, 2007 -> July 12, 2007 = 19
Sales between January 1, 2008 -> July 12, 2008 = 14

These numbers are pretty straight forward. There have been no new projects sales over this time, so I don’t have to do any filtering to get a clearer picture of current market demand. As you can see home and condo sales are down. Condos are off 26%. This is a little higher than the 18% dip overall in volume that we have seen island wide.

I was able to look at the home numbers with a little more granularity due to the lower volume. While the volume of home sales is not too far off from last year, there have been fewer higher end sales. The top 3 sales prices for 2007 were $7,000,000, $9,150,000 and $13,940,000. The highest sales price this year comes in at $6,100,000. This doesn’t necessarily mean that home values have slipped in Kapalua, it is more a reflection of more big ticket purchases last year.

Digging at the condo market numbers did not provide any real profound observations. There were ten sales under $1,000,000 in 2007 with 9 sales under $1,000,000 in 2008. Those numbers were pretty close. It is hard to discern any specific price trends in this range. There haven’t been any sales below 2007 prices yet, but decreasing sales volume could lead to pressure on prices. It was a little surprising to see that the majority of the difference in sales volume came with condos over $1,000,000. This is a little contrary to trends in Wailea where there was more volume on the high end of the condo market. One factor may be the Ritz Carlton Club and Residences. Perhaps some of the buyers looking in this price range are opting to reserve units at this ultra luxury condo development.

The Kapalua market appears to be mirroring most of the other luxury markets on the island. While there has been a dip in volume, we are still seeing demand from high end buyers. As we are seeing continued signs of a slowing market island wide, it will be interesting to see how luxury properties continues to stack up. Access to private financing and cash has kept many luxury buyers in this segment immune to the current mortgage crunch. There is lots of good inventory to chose from for those that are interested in Kapalua. Check out MauiRealEstate.com for the current inventory of Kapalua Homes for Sale, Kapalua Condos for Sale and Land for Sale. Contact us today for additional information or the Kapalua Luxury market.

Note: This is an older post. Baccarat Wailea never got off the ground. It was one of a few high end developments that petered out towards the end of the last housing cycle due to a lack of funding.

Billy and I had an opportunity to attend an update on the Baccarat Wailea Resort and Residences earlier this week. The event was hosted by the Wailea Group and included a tour of the grounds of the future resort, sales status, a look at some artist renderings of the property and a chance to look at proposed finishing in the Baccarat Sales Center. Baccarat Wailea Resorts and Residences is a proposed development by the Baccarat Company. The company that is renowned world wide for its high quality crystal is making its first venture into the high end resort world under the leadership of Barry Sternlicht. Sternlicht, the former head of Starwood Capital and Starwood Hotels is hoping to make a big splash at the resort. As it was stated during the presentation, Baccarat is looking to compete in the luxury resort space with other industry leaders such as The Four Seasons and The Ritz Carlton. Their goal is to exceed the standard of excellence set by their competition.

Part of any good resort is its location. It is hard to top the setting for the proposed Baccarat Wailea Resort. Baccarat is situated at the former location of the Wailea Renaissance Hotel. The resort will be low density with 14 buildings with 193 private residences on 16.6 acres that front beautiful Mokapu Beach. The developer has stripped the Renaissance and is working to reach its sales goals before the old Renaissance structures are torn down and construction begins on the Baccarat Resort. In the meantime it was good to be able to walk the old building to get a sense of some of the potential view planes for the future resort. Rest assured, the views look to be pretty outstanding with sweeping vistas of the blue waters of the Pacific, Molokini, Kaho’olawe, Lanai and the West Maui Mountains.

While the resort has not been started, that has not stopped Baccarat from hiring staff. We had a chance to meet the director of ocean activities for the resort. He will lead a group that is supposed to hearken back to the old Waikiki Beach Boys by assisting residents and guests when they are venturing into the waters that front the resort. They will provide guidance for activities like snorkeling, Stand Up Paddle Surfing and boogie boarding. They will not only ensure the residents and guests safety and good times, they will teach them about local marine life and Hawaiian Ocean traditions. This is just one of the many concierge and owner services that will be available at Baccarat Wailea.

After seeing the grounds, we were treated to a reception and a chance to get a sense of the finishing at Baccarat Model and Sales Center. It was hard to capture the finishing with photos with the crowd that turned out for the event, but rest assured Baccarat plans to use the highest quality materials, fixtures and finishing. The design is modern and very elegant.

As it stands right now, roughly 40 of 193 Baccarat Wailea residences are under contract. A large group sale is under negotiation. If that sale goes through, they would be roughly ten sales away from the go forward point on the demolition. Current sales have included a number of units from each of the different floor plans. Floor plans at Baccarat range from spacious one bedrooms to expansive four bedroom residences. Prices at Baccarat Wailea range from $1,836,000 up to $9,785,000. The Jalbert brothers may represent you as buyer’s representatives. Contact the Jalbert brothers today for additional information.