By some margin, 2021 was the busiest year ever for transaction volume at the Kapalua Resort. Now that we are two-thirds of the way through 2022, we thought it might be a good time to check on market activity in this resort community located on Maui’s northwest coastline. This update looks at sales volume, pricing and more. It also looks at the outlook for the rest of the year and a slightly more long range outlook as the market slowly transitions back to “normal”.

Kapalua Home Market Numbers

The numbers below represent notable numbers for year to date home sales activity in Kapalua through September 5th, 2022.

• Maui Realtors reported 12 home sales over the last eight plus months. That is 50% of the 24 sales reported during the same period of 2021, and 25% below the 16 sales during the same period of 2019.
• Limited inventory played a pretty big role in the decreased sales volume compared to last year. While reduced demand may also be a factor, that is harder to show via the statistics.
• Two out of the twelve sales closed for over asking price. An additional four sales closed for full price meaning 50% of the transactions closed for asking price or higher. It is striking that only one of the 24 homes sold in the first eight months of 2021 sold for over asking price and only 3 more sales closed for asking price or above. Back in 2019, none of the year to date sales sold for full price let alone asking price.
• Of the twelve transactions, Realtors reported that seven of the buyers paid cash.
• The median price of the homes sold in Kapalua this year is $5,025,000. That is 25.31% higher than median of $4,010,000 for homes sold during the same period of 2021. It is 105% higher than the median sales price of $2,450,000 during the same period of 2019.
• The average price of the homes sold in Kapalua this year is $5,300,000. That compares to $4,886,354 and $2,364,000 during the same periods of 2021 and 2019 respectively. That means this year’s average is 8.47% and 124.2% higher than 2021 and 2019 respectively.
• The lowest priced home to sell for the year to date in Kapalua closed for $2,750,000. The 3 bedroom, 3.5 bathroom home in Pineapple Hill with 3,670 square feet of living space is located on a 10,703 square foot lot.
• The highest price sale for the year to date closed in August. The Pineapple Hill home has 6 bedrooms, 6.5 bathrooms and 7,784 square feet of living space on just under a half acre of land.

• Pineapple Hill tops the list for busiest subdivision for sales activity this year. Five homes closed in Pineapple Hill with two additional homes closing in Pineapple Hill Estates. Three homes closed in Plantation Estates and two homes closed in Mahana Estates. There’s been no inventory and no sales in Kapalua Place. There is one pending sale in Honolua Ridge.

Kapalua Condo Market Numbers

The numbers below are the most notable from Kapalua Condo sales through September 5th. It includes only condos in the complexes that are formerly located within the Kapalua resort and does not include condo developments that border Kapalua.

• Maui Realtors reported 51 condos sold for the year to date. That is 51.89% below the 106 sales reported through the same period of 2021. It is 15.9% more than the 44 closes during the same period of 2019.
• Again, it is pretty clear that constrained inventory played a role in the substantial decrease in sales compared to last year. It’s difficult to estimate the role decreased demand played in the lower number of sales. That said, it is worth pointing out that we had more sales this year with far less inventory than we did in 2019.
• Of the 51 sales, 12 or 23.53% sold for over asking price and 28 or 54.9% sold for asking price or above. By comparison, 3.77% and 30.19% of all 2021 sales over the same period sold for over asking price and at or above asking price respectively. Over the same period of 2019, 4.55% of all condos sold over asking with 34.09% selling for asking price or above.
• Of the 51 condos that sold thus far this year, Realtors reported that 24 out of 51 or 47.05% were cash transactions.
• The median price of the condos sold for the year to date is $1,450,000. Over the same period last year, the median was $1,145,000. That’s a 26.64% difference. The median during the same period of 2019 was $917,500. That is a 58% difference.
• The average price of condos sold in Kapalua through September 5th is $2,438,421. During the same period of 2021, the average price was 29.07% lower at $1,889,224. The difference in average between 2022 and the same period of 2019 is 15.50%. During that period, the average was $2,111,034.
• The lowest priced condo sale thus far this year in Kapalua closed for $940,000. That price bought the new owner a 1 bedroom, 2 bath with 972 square feet of living space in Kapalua Golf Villas.
• That was one of just three condo sales below $1,000,000!
• Kapalua’s highest condo sale for the year to date closed for $8,000,000 at Montage Kapalua Bay. That unit includes 3 bedrooms, 3.5 bathrooms and 2,904 square feet of living space.

• Kapalua Golf Villas was the busiest condo complex for transactions with 17 total sales. Montage and Kapalua Bay Villas came next with 9 sales each.

Outlook for the Rest of The Year in Kapalua

It’s time to get out the old crystal ball to see what we might expect in terms of sales activity in Kapalua for the rest of the year. Ok, ok maybe we will skip the crystal ball and try to use some other metrics that might give us some sense of market activity. When trying to gauge current market conditions, I like to look at demand for new listings and inventory.

Last month, five new condo listings came to market and one home came to market. Of the five condo listings, two were under contract in less than 10 days. That would appear to suggest that there is still some demand in the condo market. While overall demand on island might be feeling a crunch from interest rates, Kapalua is less likely to be rate sensitive. Keep in mind that just under 60% of this year’s home sales and just under 50% of this year’s condo sales in Kapalua were cash transactions.

The current inventory of listings remains limited. There are only 11 active condo listings in Kapalua and 4 pending sales as of September 5th. When you break it down by condo complex. There are no active listings in the Ironwoods or Coconut Grove. Both Kapalua Ridge and Kapalua Golf Villas have one active listing each and the Bay Villas has two listings. Only the Ritz Carlton Residences with three listings and Montage with four listings have any significant depth of inventory. On the home front, there are just five active home listings with one pending home sale.

One last factor to consider is seasonality. The charts below shows Kapalua home and condo pending sales by month in 2022, 2021, 2019 and 2018. In all of those years, the last four months of the year tend to see fewer properties going under contract.

Based on the inventory, demand and past seasonality, I would expect that sales activity for the rest of the year will be quieter than the first eight months. That said, I would venture there should be some demand for the limited inventory particularly in the the lower price points of the condo market.

Longer Term Kapalua Outlook

I mentioned at the start of the Kapalua discussion, that Kapalua was one of the markets that saw the greatest increases in demand over the last couple of years. That comes after a decade where Kapalua saw lesser demand than other resort markets. While Kapalua has always had its share of loyal fans, it tended to be a slower market. Days on market were longer and sales volume was lower. That started to shift a little at the end of the decade and it changed completely with Covid. As the market slowly moves toward normal, what does “normal” actually look like?

Maui Prep helped fuel part of Kapalua’s Covid period boom. The school was able to scale up enrollment to accommodate a large number of affluent families who took advantage of the work from anywhere movement. Many of those families ended up buying homes in Kapalua or other nearby areas of West Maui. The question of how much ongoing demand there will be from affluent remote workers remains something of an unknown.

I recently had the opportunity to pose the question about the future of the Kapalua market to an agent who lives and works in the community. I thought her answer offered some interesting insights. While Maui Prep came up, she also discussed the role of the Montage and the Ritz. She pointed out that the closure of the Kapalua Bay Hotel in 2006 and construction projects at the Ritz limited places to stay and the overall appeal of the area during the latter half of the 2000s. The foreclosure on the Ritz Carlton Club in 2013 didn’t help. When the Ritz Carlton Club redeveloped and rebranded as the Montage in 2014, it brought in new vacationers. Many of them developed loyalty to Kapalua and eventually became second home owners.

With those two anchor properties, the other agent thought this would provide a solid foundation for future demand in the community. For this and other reasons, she is very much a Kapalua Bull over the long term. It was an interesting answer and one I thought might be worth sharing with our readers.

Contact The Maui Real Estate Team

We will continue to provide periodic updates on the Kapalua market on this blog. If you are interested in Kapalua Properties, you can find the current inventory of Kapalua Homes for Sale and Kapalua Condos for Sale on MauiRealEstate.com. Contact The Maui Real Estate Team if you have questions on any of the listings or need assistance buying or selling a property in Kapalua.

Maui Market Musings Volume XVIII tackles the notable numbers from August 2022 Real Estate Sales on Maui. It even delves into a nuanced discussion of the (spoiler alert) decrease in median home prices on island and what it may mean. This edition originally included a discussion of Kapalua 2022 market activity, but I am not sure anyone would make it through the two subjects together without consuming dangerous levels of caffeine. Look for that post early next week. Without further ado…

Notable Numbers from the August Home Sales

With Labor Day passed, It’s a good time to took a look through the August Home Sale numbers. The numbers below are the most noteworthy with August 2021 and August 2019 data points provided for comparison. The numbers are different from the Realtor’s Association of Maui numbers because they exclude the islands of Molokai and Lani.

• Maui Realtors reported 82 homes sold in August of 2022. That is 32% lower than the 120 homes sold in August of 2021. It is 15.5% lower than the 97 homes sold in August of 2019.
• Of the 82 homes that sold, 14 or 17.07% sold for over asking price and 37 or 45.12% sold for asking price or higher. That is well below what we saw during August of 2021 when 40.83% sold for over asking price and 61.67% sold for asking price or higher. It’s still well above what the market was like in August of 2019. At that time, 11.34% of sales closed for over asking and 28.87% sold for asking price or above.
• Of the 82 homes sold, 21 or 25.6% of buyers reportedly paid cash.
• The median price of the homes sold in August is $1,037,500. That is down 2.4% from the August 2021 median of $1,062,500. The August 2022 median is 27.6% higher than the median price in August 2019.
• The average price of homes sold in August 2022 is $1,537,666. That is 10.9% lower than last August’s average sales price of $1,725,993. The August 22 average is 23.67% higher than the August 2019 average of $1,243,316.
• The lowest priced home to sell in August closed for $230,000. That is also the lowest sale on the island of Maui all year. The off market sale involved a 2 bedroom, 1 bathroom home with 1,012 square feet of living space on a 7,658 square foot lot. There were no photos or details on the condition of the home.
• The highest priced transaction in August closed for $7,900,000. The home in the Pineapple Hill subdivision of Kapalua has 6 bedrooms, 6.5 bathrooms and 7,784 square feet of living space.
• The home in Pineapple Hill was one of three sales over $5,000,000 and one of fourteen that closed for over $2,000,000.

Let’s Talk About Median Prices and Home Values

I would imagine the fact that this August’s median is lower than last August’s median raised a few eyebrows. Does mean that we may be seeing values decrease? I think this merits some discussion.

If you are a long term reader of this blog, you will know that I am wary of tying shifts in median price to shifts in home values. The composition of sales can be a big driver of month to month shifts in median prices. A lot of lower priced homes selling in a month could drive down median prices while more high end sales may drive up median prices. Maui’s not the easiest real estate market for tracking changes in price. The volume of sales is relatively low and the inventory is heterogeneous. Even some of our more cookie cutter subdivisions have variability in views and location that can impact value.

I like quantitative evidence a lot more than anecdotal evidence. At this point, I can’t point to any clear numbers that support price drops. That said, a case can be made that some homes on Maui that sold during the first five to six months of this year would sell for less now. Competition remained fierce in the first quarter and bidding wars were common. Borrowing costs were still a lot lower than they are now. Investors were still active. FOMO or fear of missing out on low borrowing costs and limited inventory meant buyers bid aggressively pushing up prices.

Fast forward to this summer and the dynamic changed. The pool of buyers is significantly smaller due to higher borrowing costs and an absence of investors. We are definitely past the FOMO phase of the market. With a lot less buyer demand, we are starting to see some properties struggling to sell. While I know this is speculative, I surmise that some of these properties that are sitting would have attracted multiple buyers earlier in the year. The competition would have pushed prices upwards. Without competition, some of these are sellers are needing to reduce prices.

Now, does this mean home prices are going down across the board? Absolutely not. At this point, I would argue that this is a phenomenon limited to lower price points in the market. In particular, it is confined to lower priced properties with flaws that FOMO buyers forgave, but current buyers are less willing to accept. There are other market segments where inventory is starting to build. I could see those parts of the market start to see drops in value, but we aren’t there yet. It is also worth pointing out at that this market is incredibly variable. Above asking price sales are still higher than they were pre-Covid and there are still still homes closing for all time neighborhood highs.

Will we start to see more broad based decreases in value? That’s tough to say. We share one attribute with some of the markets that are seeing downward pricing pressure and that is we had a high number of work from anywhere relocations. What differentiates us from the markets that are seeing price decreases is our current lack of inventory. We are still well below 2019 inventory levels with no clear relief in sight. Ultimately, the balance between supply levels and demand will dictate our price trajectories. It’s also likely that this balance will continue to vary by community and by price point.

Notable August Condo Sales Numbers

I present the condo numbers with the same framework as the home sale numbers. They differ from the Realtor’s Association of Maui statistics because they exclude the islands of Molokai and Lanai.

• Maui Realtors reported 103 condos sold in August 2022. That is a 44.9% drop from the 187 sales in August 2021. It is 13.45% lower than the 119 condos sold in August of 2019.
• Of the 103 condos sold, 21.36% sold for over asking price and 45.63% sold for asking price or above. In August of 2021, 27.81% sold for over asking and 66.84% sold for asking price or above. In August of 2019, 12.5% sold for over asking price and 39.17% sold for asking price or above.
• Of the 103 condos sold, 52 or 50.49% paid cash.
• The median price of the 104 condos sold last month is $820,000. Last month’s median is 26.15% higher than the August of 2021 of $650,000. It is 60.78% higher than the August 2019 median of $510,000.
• The average price of condos sold in August 2022 is $1,233,249. That is 30.88% higher than the average sales price of $949,939 in August of 2021. It is 40.09% higher than the 2019 average sales price of $887,539.
• The lowest priced condo to sell in August of 2022 closed for $150,000. The 1 bedroom, 1 bathroom unit is located in the Harbor Lights Condominium in Kahului.
• The highest priced condo to close in August of 2022 sold for $9,200,000. The 4 bedroom, 4.5 bathroom condominium with 4,817 square feet of living space is located in the Kula Villas complex within the Makena Golf and Beach Club.
• The Kula Villas sale is one of five transactions that closed for $5,000,000 or higher and one of seventeen sales that closed for more than $1,500,000.

A Few Comments on the Condo Numbers

Since we broached the subject of home values, I might as well go down the worm hole of discussing condo values. There is a pretty clear contrast in this month’s median home and condo prices. While median home values are below August 2021, the median condo value is well above August 2021. Again, changes in median prices don’t always reflect changes in values.

However, the condo market remains more resilient than the home market on island. I am continuing to see upward pressure on prices in the vacation rental and second home condo market. Demand for the limited inventory remains strong. Some of the condo properties geared toward island residents like Kihei Villages and Southpointe seem to be losing the steam that they had earlier this year. Plain and simple, this part of market is cooling faster than other parts of the condo market due to affordability. If borrowing costs remain closer to 6% or higher and inventory grows at all, this part of the market could also start to see decreasing values. Like the home market, this ultimately depends on the balance between supply and demand.

Some Maui Beauty to Brighten This Post

You never know who could show up during your snorkel sesh! Via @HIOceanProject pic.twitter.com/WkJqtRa7Gv

— Maui Hawaii (@Maui) September 9, 2022

Contact The Maui Real Estate Team

Contact The Maui Real Estate Team with questions, comments or feedback or if you need assistance buying or selling property on Maui. Market conditions on island are varied and dynamic. Now more than ever, it’s important to have experienced and savvy representation. We look forward to hearing from you to answer questions and learn more about your real estate needs.

Highlighting Design Choices at The Oasis

Carefully curated. Precision Crafted. Those are the words that stuck in my head when I first spent some time at the Oasis in Spreckelsville. The quality of construction, choice of fixtures and materials and the overall interior design are all executed at truly extraordinary levels. Today’s post highlights some (but not all) of the details that help make this such a special property.

The Boffi Kitchen blends function, beauty and durability. This close up shows the beveled edged on the marble counter tops and the Corian material cabinetry.

Gaggenau appliances complement the Boffi cabinetry. They include a coffee/ espresso maker, conventional and steam combi ovens, warming drawers, induction and lp cooktops and refrigerator. There are Gaggenau wine refrigerators off the dining room.

You aren’t going to find any outlet covers in this home. The outlets are flush with the marble border along the countertops in the kitchen. Elsewhere, the outlets are flush with the Antiqua stone plaster walls.

Baccarat chandeliers punctuate the living room and dining room with personality and beauty.

Like many parts of the home, form and function combine really well together with the Porro pullout sliding closet systems in the bedrooms.

This photo of the shower in the third bathroom highlights a couple of notable design details. The Flos flower light fixtures designed by Marcel Wanders add some pop to showers throughout the home. The owner also included these flower fixtures around the exterior. This brought some continuity to the interior and exterior lighting. The book matched marble is another notable feature. This photo doesn’t completely do justice to the book matching. That said, it is a higher level of stone work than what you will see in most Maui luxury homes.

This shot shows some of the quality teak woodwork done around a door frame, but there is something else that is worth pointing out. When we showed the house to the owner of another brokerage, he reveled in the quality of the work and said it was a “design nerd’s paradise”. He also asked to take a look at the door hinges. The broker confirmed his suspicions when he observed that all screws are turned to the same position. An attention to detail that you don’t see often with Hawaii homes.

This isn’t a conventional property to market. While it offers stunning spaces that truly catch the eye, we felt the need to create a video that also captured the craftsmanship and quality curation. We welcome your feedback on the effectiveness of our efforts.

Check out the Oasis Spreckelsville Listing Page for more photos and details on the property. Qualified buyers may contact the Maui Real Estate Team to discuss the property or to arrange an exclusive viewing.

The Oasis is Currently Off Market.

We are proud to bring the Oasis Spreckelsville to market. Every square inch of the property well conceived and intentional. Every fixture, material, appliance, furnishing and planting carefully curated. All elements of construction precision crafted. The home and detached garage with second story apartment are nestled amidst an assortment of water features and purposeful outdoor spaces. It makes the home well suited to either quiet contemplation or entertaining a group of friends or family.

The main home features two bedrooms with ensuite baths, a third bathroom, a formal dining area and an expansive kitchen/great room. The Italian designed Boffi Kitchen has beautiful marble countertops, Corian cabinetry and Gagneau appliances.

Baccarat Chandeliers punctuate the living and dining room areas.

Boffi sinks, fans and showers, Dornbracht fixtures and Flos lighting are among other design choices that complement the nearly flawless craftsmanship. Reclaimed, oiled teak floors, book matched marble counter tops and baths continue the theme of simple elegance.

The Studio

The well cultivated, detached studio apartment offers finish and fixtures equivalent to the main house and one of the coolest “hidden kitchens” around. It is a perfect guest space or even a fantastic home office.

Outdoor Spaces

The pools of the property offer beauty, tranquility and refreshment. The zero edge main pool is a natural entertainment space. The 64 foot lap pool is a lot more than just a work out space. It serves as a reflection pool for the lush landscaping and exterior artwork. The 6′ x 12′ garden soaking tub is a salve for the soul. A fourth water feature with fountains creates additional sensory pleasures. Multiple outdoor showers offer a place to rinse off when coming back from the beach.

Other outdoor highlights include a kitchen/barbecue area overlooking the main pool, a covered patio area that provides a rain or shine space to enjoy tradewinds, bird song and surrounding foliage. Extensive additional lanai areas make for good spaces for morning coffee or tea or an outdoor dinner party. The lush tropical landscaping thrives with surprisingly little maintenance. The landscaping combined with privacy fencing make you feel like you truly are in your own little oasis.

Contact The Maui Real Estate Team for More Information

The Oasis Spreckelsville listed turnkey for $7,780,000. Check out the Oasis listing page for additional photos and details. Watch for additional content on this property on our blog. A video is in the works and there are tons of stunning photos not featured on the MLS. Contact The Maui Real Estate Team for additional information or to set up a showing.

Update. The Oasis is not listed for sale at this time.

This week’s edition of the musings dives into recent numbers from the Maui Luxury Home and Luxury Condo market. There is also an update on the end of the State of Hawaii’s Safe Travels Program and Mask Mandates, a look at the national real estate market and a little bit of Maui beauty to brighten your day.

Maui Luxury Market Update

As we approach the end of the first quarter of the year, it is worth taking a moment to check into see how the luxury property market is fairing on Maui. For the sake of this article, luxury is defined as homes priced for $2,000,000 and above and condos priced $1,500,000 and above. The numbers below are based on sales numbers between January 1st and March 21st. Here are the numbers followed by a few thoughts on the luxury home and condo market.

Maui Luxury Home Market 2022 Sales Numbers

• Thus far, 47 homes sold over $2,000,000 as of March 21st. That is down 13% from the 54 sold during the same period last year.
• Six homes sold for more than $5,000,000 this year. That is down from 13 during the same period of 2021.
• When you look at sales over $10,000,000, activity is up just a little bit. Realtors reported 4 sales over $10,000,000 compared to 3 last year.
• A number of the stronger luxury home markets in early 2021 saw activity decrease in early 2022 as shown by the chart below. West Maui saw some of the more pronounced decreases with bigger drops in Lahaina and Ka’anapali.

• A number of communities that did not see sales in 2021 experienced activity in 2022. Notably, there were 5 sales in Haiku and 3 in Makawao this year.
• Days on Market decreased substantially on homes sold over $2,000,000. This year, the average sale is closing in 127 days. That is 29% less time on market than last year’s 179 days.
• Competition in this market place is up significantly. Of the homes that sold for $2,000,000 or above, 57.44% closed for asking price or higher. That is well above the 16.67% that sold for asking price or above during the same period of 2021.
• It is notable that the three highest priced home sales all closed for their full asking price.

Maui Luxury Condo Market 2022 Sales Numbers

• Maui Realtors reported 71 condos sold for $1,500,000 or higher as of March 21st. That is up almost 34% from the 53 sold during the same period of 2021.
• Of the 71 sales, 7 sold for $5,000,000 or more as of Match 21st. That is up slightly from the 6 that sold during the same period last year.
• The Ka’anapali Condo market stands out for the significant increase in sales activity compared to other Maui markets. The Napili and Kahana market also experienced a notable increase.

• Other markets saw less drastic annual changes with Lahaina and Kapalua repeating last year’s numbers and Wailea and Makena down slightly.
• A big reason for Ka’anapali’s increased activity is due to activity at Honua Kai. Honua Kai saw 12 sales after just 4 last year.
• Days on market decreased quite a bit for high end condos. The average of 67 days on market is 54% lower than the average of 145 days on market in early 2021. It is worth noting, that long term new developer sales are excluded from calculations for both years. These are contracts signed pre-construction, but do not close until 2-3 years later when construction is completed.
• Competition for luxury condos also increased. Of the 71 condos sold, 63.4% sold for asking price or above. That compares to 39.6% last year.

Some Takeaway from the Luxury Home and Condo Numbers

Volume may be down for homes, but that is more a function of reduced supply vs. decreased demand. The lower days on market and number of homes selling for at or above listing price support the notion of sustained demand and a more competitive market.

The impact of decreased inventory is also evident at the community level where places like Wailea and Makena are seeing lower sales volume due to decreased inventory. The Ka’anapali market and to an extent the Lahaina market are seeing lower sales for a few reasons. 1. Inventory is down at the lower price points of the luxury home market. 2. Some of the homes going under contract are “spec” houses with completion dates later in the year. Finally, some of the sellers are pushing the envelope on pricing. I mentioned the Lanikeha subdivision in Ka’anapali specifically in volume I of the market musings. The bulk of the inventory in that neighborhood is priced well above previous neighborhood high sales. To be fair, a couple of the higher priced homes have gone under contract since my post. That said, there are still quite a few homes available.

The increase in activity in new markets is also due to a combination of factors. We are seeing some homes selling above $2,000,000 due in part to appreciation. With price increases year over year ranging between 10 and 20 percent, some of last year’s below $2,000,000 sales are going for more money. Another factor is just plain old variability. Places like Haiku and Makawao both saw an increase in $2,000,000 sales over the last 4 years. It’s just that early 2021 was quieter in those communities. We are also seeing some luxury buyers expand their search outside the resort markets due to the lack of inventory.

The increase in activity in the condo market is largely due to better inventory selection compared to the luxury single family home market. That said, not all markets have an abundance of inventory. The Wailea and Makena area have lower inventory and it is reflected in the lower sales volume. We can see the impact of decreased inventory in some area of the luxury condo market in both the decreased days on market and the higher percentage of condos selling at or above asking price.

End of Safe Travels and the Mask Mandate

March 25th was the last day of the Hawaii Safe Travels program. Travelers coming to Hawaii will no longer need proof of vaccination or a negative covid test prior to arrival. It is also the last day of the indoor mask mandate in Hawaii. There are still requirements to wear masks on planes, buses, public schools and the airport.

Interest Rate Increases Don’t Seem to be Slowing the Market Around the Country

While keeping tabs on the local market, it’s also worth keeping an eye on national trends. This is particularly the case in the current market as interest rates hit heights we haven’t seen over the last few years. The folks over at Altos Research have good access to pending sales data around the country. That gives you a little better sense of current market conditions than what you would get by just looking at sales data. Here is their video overview of the most recent data and it’s worth a watch.

If you don’t have the time to watch, here are a few quick notes. Inventory ticked up again although pending sales and pricing both appear to be strong. They are watching closely to see if the recent rates are impacting buyers. While they aren’t seeing any data to really suggest a change in market conditions, they spoke to a few things they are looking for that might indicate a potential slow down from the current frenzy. They mentioned listening for anecdotal signs of less active bidding wars. Altos suggested keeping an eye out for an increase on cancelled transactions and an increase in cancelled new developer contracts. Again, they haven’t seen that in the national data yet.

For what it’s worth, they aren’t expecting any seismic shifts in the market other than moderation of the current activity. The caveat being that a more significant shift could occur if interest rates were to settle over 5%.

Interestingly, there were a few more cancelled contracts on the Maui MLS last week. I am hesitant to read too much into the cancellations at this point. While it might be related to the rise in rates, it could also be a coincidence. It is something to watch a little more closely going forward.

A Little Bit of Maui Beauty

It was another beautiful morning on Maui today. I thought it was worth sharing this photo from Baldwin Beach with the West Maui Mountains in all of their glory.

A sunny way to start the week. 🏖️ pic.twitter.com/HJFdlTgngM

— HAWAI'I Magazine (@HAWAIIMagazine) March 28, 2022

Contact The Maui Real Estate Team

Have questions on anything in this post? Need assistance buying or selling property on island? Just want to talk about a specific part of the market? Contact The Maui Real Estate Team. We look forward to being of assistance.

Welcome to the third edition of Maui Market Musings. It’s our almost weekly take on a variety of Maui Real Estate topics. This week I wanted to take a look at competition in the market. We know first hand that quite a few listings are seeing bidding wars, but I wanted to look at some of the sales numbers to gauge where competition is most intense. We also take at some of the notable numbers from our condo listing at Sugar Cove. Last but not least, I offer a few closing thoughts on the state of the world and the state of the market. Without further ado, here is musings volume III.

Maui’s Most Competitive Markets

It is safe to say that buyers shopping for property on Maui are experiencing some of the most competitive conditions in the history of our local market. I took a look at recent sales data to try to get a sense of where the competition for properties is the most intense. I focused on two primary metrics. Properties selling for above asking price and properties selling for asking price or above. When comparisons were relatively close, I also looked at the number of cash transactions.

I used sales that closed between February 1st and March 9th. Keep in mind that this is something of a lagging indicator. Sales closed during this period mostly likely came from contracts agreed upon sometime between December and early February. Anecdotally, it felt like there were a large number of bidding wars in the second half of February. Most of those transactions are yet to close. By the same token, the war in Ukraine and its impacts on the economy are largely unknown. Depending on the direction of the economy, competition could ease. That will be something to watch over the coming weeks and months.

Most Competitive Property Type

The condo market is the most competitive market segment based on the sales data. A whopping 42.86% of the condos sold over that period closed above asking. The total for those at asking price or above comes in at 73.73%. If you were shopping for a condo over the last few months, you needed to be at or above asking price with your offers on the majority of the sales to ensure your chances for success.

Honorable mention goes to the single family home market. A total of 30.19% of home sales came in above asking price with an equal number coming in at full price. That means a grand total of 60.38% of homes sold went for asking price or higher. Needless to say, competition is strong for homes too!

Most Competitive Condo Market by Location

If you bought a condo in Kihei over the last six weeks, chances are that you had a lot of competition. A total of 85.72% of Kihei condos sold for at or above asking including 54.55% over asking price.

Lahaina earns honorable mention with 83.3% at or above asking price. It is worth noting that this skews towards asking price sales with 50% selling at asking price.

Most Competitive Condo Market by Price Point

This was a tough one to call as there were two price points with really similar levels of activity. In the below, $500,000 market, 34.21% sold above asking with a grand total of 81.58% at or above asking. It is worth noting that 42% of all transactions in this price range were cash purchases. In the $500,000 to $999,999 price range, 77.39% sold for at or above asking price. That said, 52.17% ended up selling for above asking price. Realtors reported cash transactions for 38.2% of sales in this price range. The lower price range had a slightly higher level of cash and at or above asking sales prices. The $500,000 to just under a million range came in with a much higher percentage of above asking price sales.

Most Competitive Home Market by Location

Competition for homes in Wailea was pretty tight as of late albeit on a limited number of sales. Three homes sold with two going for full price and one going over asking price. All three sales were cash.

Of the markets that had higher sales volumes, Haiku experienced the most competition. 77.78% of the homes sold for at or above asking price. Of all the sales, 44.44% closed above asking price.

Most Competitive Home Market by Price Point

The lower the price, the higher the competition. There was no category for sales under $500,000 as there were no sales in this range. In the below $1,000,000 range, 77.27% of all transactions closed for at or above asking price. That includes 31.82% closing for more than asking price.

Honorable mention goes to homes listed in the $1,500,000 to $1,750,000 price range. I didn’t set out to make this a specific price point for comparison, but the activity in this price range jumped out in the sales data. Nine of eleven listings closed for at or above asking with 72.7% closing for above asking price.

A Few Other Thoughts Looking at The Numbers

• This is a really challenging time for entry level buyers on Maui. Let’s be honest, it’s been really tough for quite some time. However, the threat of rising rates seems to have enhanced the urgency of some buyers. Investors with cash are lurking in this part of the market making for tough competition.
• The West Maui resort markets experienced some of the most competition in late 2020 and throughout out 2021. It seems as if relocations played an important part. This year, those markets cooled a little. Kapalua has the lowest percentage of condos closing for at or above asking with 25%. The one Ka’anapali home sold for below asking and quite a few homes are sitting. Some of that stems from sellers really pushing the envelope on pricing.
• While I found that competition was indeed stronger in some places than others, well priced properties were likely to draw competition regardless of price point or location.

Sugar Cove Building 6 Behind the Numbers

Our office listed a condominium in Sugar Cove in Spreckelsville for the jaw dropping number of $17,000,000. That is a pretty extraordinary asking price. That said, it is a truly unprecedented condo offering both for the North Shore of Maui and the island as a whole. These are some of the notable numbers that justify what would be one of the highest sales prices on record for a Maui Condo.

• 5,950:The interior living space of this listing. That is 23% larger than any previous condo sold on the island. It is the 3rd largest interior living space of any oceanfront condo or home actively listed for sale. The list prices for the larger properties are $22,900,000 and $59,500,000 respectively.
• 1: This listings is for 1 whole building at Sugar Cove. There are no shared walls with any neighbors.
• 3: Originally 3 units, the owners combined 2 of the units for a truly luxurious primary living space. The 3rd unit is used as a 4 bedroom, 3.5 bathroom guest space.
• 8: The total number of bedrooms. This is the first condo listing on Maui with 8 or more bedrooms.
• 4: The number of bedrooms with direct ocean views. There are a lot of beautiful condos on island where the bedrooms lack ocean views. This offering has four direct oceanfront, big view bedrooms. No more fighting over the bedroom with the best view.
• 70: There are over 70 feet of windows and glass doors overlooking the beach and ocean from the living/kitchen/dining area of the primary living space.
• 15.6: The total number of kilowatts generated by the 50 solar panels
• 28: The total number of racks for surfboards, windsurf boards or stand up paddle boards located on Sugar Cove Building 6. There is plenty of room for friends and family to store their gear after taking advantage of the world class combination of wind and waves located right offshore.

The numbers add up to a truly impressive property. Not a numbers person? Enjoy this short video to get a better feel for Sugar Cove Building 6.

Check out the listing page for more photos and details.

Ukraine

It’s been heartbreaking to watch the last two weeks of violence since Russia invaded Ukraine. Our thoughts go out to the Ukrainian people.

In light of the human tragedy, it feels difficult to talk about how the war could impact the real estate market. That said, some clients reached out to us over the last week asking about the potential impact of the war on the market. I thought it would be worth sharing a few thoughts. The reality is that this is a question that economists and people a whole lot smarter than us are still trying to answer. At this point, this looks like it will be a drawn out war, and it is becoming increasingly clear that it will have significant impacts on the global economy.

The upward pressure on gas and utility prices is well known. Air travel to and from the islands is going to become a lot more expensive and local utility rates are forecast to rise 20%. Russia is also a major exporter of raw materials above and beyond petroleum. The end of raw material exports out of Russia through the end of the year is likely to put upward pressure on all sorts of goods and commodities. The tweet below shows the global supply of certain raw materials coming out of Russia.

A “you didn’t fire me, I resigned” moment, Putin bans export of products and raw materials until Dec 31. Might be subject to some details/exceptions, but this should push all key raw material prices further up.

Here’s Russia’s *exports* as % of production of key raw materials👇 pic.twitter.com/AcGtv9yUX0

— Emre Akcakmak (@akcakmak) March 8, 2022

Ukraine is also an important raw material provider. It provides as much as 50% of the neon supply in the world. Neon shortages would impact a lot more than beer signs. It is an important component in the lasers used to etch semiconductors. The semiconductor and microchip shortages of the last couple of years are unlikely to go away anytime soon.

While inventory remains near record lows, inflation pressures could further push interest rates and/or take the steam out of parts of the economy. Thus far, the local market is more than weathering increased rates from before the start of the war. It remains to be seen if these additional challenges will cool off demand.

Contact The Maui Real Estate Team

Limited supply and increasing global uncertainty call for quality representation. Contact The Maui Real Estate Team if you are interested in buying or selling the current market. We welcome the chance to discuss your current needs.