Now that we already into our third month of 2018, we thought it was a good time to provide updates on some of our core markets. The first one we wanted to take on is the Spreckelsville Neighborhood on Maui’s North Shore. The neighborhood is home to our broker/owner Billy and agent Martin Lenny. Our office also has a home listed on the Maui Country Club golf course. Sprecks is never a high sales volume neighborhood, but it has seen strong demand and steady price increases over the last seven or eight years. Residents are attracted to the sense of community, convenience and access to great beaches and water sports. This post takes a look at market activity during the last six months of 2017 and the first two months of 2018.

The map above shows the location of properties that sold over the last eight months (red pins) as well as the current inventory (green pins). You can click on individual pins for more information on the respective properties.

There have been six sales since July 1, 2017 in Spreckelsville including 5 homes and one land sale. Here are some of the notable numbers from the sales.

• The high sale over the last eight months was $16,000,000 for an oceanfront residential condo on Stable Road. The large home included 2.882 acres of limited common element including 500 linear feet of beachfront.
• The same buyer bought an adjoining unit of the residential condominium for $5,999,999. That was a smaller 1,180 square foot home on .4381 acres of beachfront limited common element.
• In addition to the two residential condos, there was a third oceanfront home that sold. The three oceanfront sales last year were the most we have seen in the neighborhood since the four sales in 2014.
• The one transaction thus far for 2018 was a land sale. It was a bulk sale of three lots in the E Papae Ka Puko’ Ae subdivision. That subdivision is seeing some significant changes with three houses under construction currently and a fourth set to start construction soon. If all of the new owners of the recently sold lots plan to build in the near future, there will only be a handful of vacant lots remaining in Spreckelsville.
• The six sales were spread throughout Spreckeslville with two closings on Stable Road, the aforementioned E Papae Ka Puko’ Ae subdivision land sale, the sale in Old Sprecks on Laulea and two sales in the Sprecks V subdivision.
• Two of the six properties that sold in the last eight months were unlisted. All of the properties that closed in the first half of 2017 were unlisted. During this market cycle, Sprecks has become a neighborhood where a significant number of properties are sold before being listed.

I would anticipate that the rest of 2018 will see a relatively small number of sales in the neighborhood due to the constraints of limited inventory. I surmise that unlisted properties may continue to augment the current inventory to bolster sales numbers. The limited supply is also likely to provide upward pressure on neighborhood prices.

Contact The Maui Real Estate Team if you are interested in buying or selling property in Spreckelsville. We know the current inventory, and we have ears on the ground in the neighborhood looking out for unlisted opportunities. You can check out the current inventory of Spreckelsville Real Estate listings on our site. Stay tuned to this blog for other Spreckelsville neighborhood updates.

Haiku is located in Windward Maui along the island’s North Shore. It is a rural community that covers a large geographic area. It runs from sea level up to about 1,400 feet in elevation. Rainfall ranges from 40 inches to over 100 inches. Historically, the area was known primarily for agriculture. Pineapple plantation, tropical flower farms, some small scale ranching and other small farms have been located throughout various areas of Haiku. Larger scale pineapple farms are a thing of the past, but there are still are a variety of small farms around the community. Agriculture also has a big impact on the Haiku Real Estate market in that the majority of the properties have agricultural zoning. Ag zoning means lower density with lots of 2 acres or more.

Haiku residents are drawn to the area for a variety of reasons. For those whose vision of Hawaii is lush foliage and waterfalls, Haiku is the most accessible area of the island that fits this climate zone. It is close to the North Shore’s renowned wind and water sports. The world famous big wave surf spot Peahi also known as Jaws is located just offshore from the cliffs of Haiku. The area is also popular for wellness activities. The rainfall, larger lots, zoning and climate are an attraction for those who want to farm, have a small orchard and, or even a back yard garden. Some are just attracted to the area’s natural beauty and the potential for a quiet lifestyle.

With Haiku just ten minutes away from our office and two agents calling the town their home, this is a community where we work in extensively. We wanted to check in to see what is happening in the Haiku Real Estate Market after ten months of sales in 2017. This is the third of our semi-recent posts looking at the North Shore Real Estate Markets. We have also looked at Paia and Spreckelsville. Haiku is a much larger market than Paia and Sprecks. As a result, the format of this post is going to be a little different from our other efforts to date.

Haiku 2017 Market highlights

• There have been 75 homes sold in Haiku through ten months of the year. Last year, over the same period of time, there were 56 homes sold. That is a 28% increase in sales activity.
• The median sales price for the homes sold this year is $733,000. The average price for the 75 homes sold is $868,952. By comparison, the median price over the same period of 2016 was $841,500 and the average sales price was $926,075. Surprisingly, that is a 13% decrease in median price and less than a 1% increase in average price. This lower median is a reflection of more sales activity at the bottom of the market. It does not represent a decrease in values.
• The highest priced home to sell for the year to date closed for $3,999,900. The 2.189 acre oceanfront property in Huelo consists of a four bedroom, three bath home with 3,609 square feet of living space, and a separate one bedroom, one bath cottage with 519 square feet of living space.
• The property on Door of Faith was the only home in Haiku to have closed this year for over $2,000,000. There were 11 total homes that sold for more than $1,000,000.
• The lowest priced home sale to close in Haiku this year sold for $335,000. The structure on the residential condominum was in very poor condition. A good portion of the value was due to the associated land. It included 2.287 acres of associated land or limited common element.
• There were five bank owned homes that sold and three short sales for the year to date. This is an increase over just the one bank owned sale from last year.
• Just over 21% of this year’s sales have been for full price or over asking price.
• There were 27 parcels of land that sold in Haiku as of November 1. The median price for those sales was $410,000, and the average sales price was $508,950. Last year there were 21 land sales over the same period of time with a median price of $535,000 and an average sales price of $865,023. That means a 29% increase in sales for this year compared to last year, a 23% decrease in median price and a 41% decrease in average price.
• The high land sales price for the year closed for $1,725,000 for 31.25 acres with a deluxe barn on the ocean side of Hana Highway in Western Haiku. The high sale price for the year to date for a parcel of land without any structures is $1,295,000 for 2.06 acres of oceanfront land.
• The lowest priced lot to sell closed for $300,000. This condominiumized off the grid lot was limited to only a 1,000 square foot cottage and had 3 acres of limited common element.

Haiku Market Activity by Price Point
While the numbers above speak to the big picture, the Haiku market isn’t uniform in its behavior across all price points. I wanted to look at how the market has performed at the various price points in the market.

The Haiku under $500,000 market is a little more limited due to the nature of the community. As mentioned above, most of the properties are agriculturally zoned. A standard ag zoned lot is two acres or more. The price for just two acres of bare land typically starts around $400,000 and it can go up substantially from there. There are some neighborhoods with smaller residential lots in the community. Many of those small lots are clustered near old pineapple canneries that have been repurposed into commercial space. The homes priced under $500,000 in current market conditions are typically, but not exclusively smaller lots. The sales this year have also included some residential condominiums and distressed properties. It is somewhat surprising to see that the number of homes sold in this price increased this year compared to last year. In many communities around the island, sales activity in this price range has dwindled as the number of homes priced under $500,000 have become more scarce as prices rise.

I can’t say that there is a specific factor that is driving the increase in activity under $500,000. Some of that is just market variability. There has also been a modest uptick in bank owned properties. While an increase in bank owned activity during a strong market cycle may raise a few eyebrows, a little context is needed. These bank owned properties are still lingering from the last downturn. The bulk of foreclosures on this island are going through the judicial foreclosure process. That process can take years for resolution.

Buyers searching for homes for less than $500,000 in Haiku will find that the inventory is limited. Of the current inventory, three of the four active listings are cash only purchases due to the condition of the homes or other issues that might prevent financing. Well priced homes in this price range are likely to attract strong buyer interest.

The $500,000-$750,000 price range in Haiku currently includes some nicer homes on small lots, a few homes on 2 acre lots, some homes on lots between 1/2 acre and 2 acres and quite a few condominiumized homes on agricultural lots. Residential condos are an increasingly popular form of ownership in Haiku. Ag zoned lots have entitlements to build a main house and a cottage of 1,000 square feet. Many owners are opting to split the lot into two separate condo units with the main house and a portion of the acreage being one unit and the cottage and a smaller portion of the acreage being another unit. Just under 31% of the homes sold in this price point were residential condos. Many of these were the cottage portion of the condominium.

The overall market activity in this price range was strong. There was a 216% increase in sales recorded when comparing the first ten months of 2017 to the first ten months of 2016. This is particularly impressive as there were a lot of buyers shopping in this price range who reserved homes at the new Pauwela Homes Workforce Housing project. This 33 unit condominium home development behind the Haiku Community Center was not listed on the MLS. For the first few months on the market, the home buyers needed to meet county median income requirements to be eligible for purchase. Twenty-seven of the thirty-three lots were priced from $516,580-$685,000. All of these lots have been reserved and there is a waiting list for any properties that might fall out of contract. Those homes won’t close until sometime in 2018.

Buyers looking in this price range in Haiku will find that current inventory is limited. There is less than three months of inventory based on the number of homes sold for the year to date. As the busiest segment of the Haiku market, buyers should be advised that well priced properties in this range get a lot of interest. Potential sellers may find that this is a pretty ideal time to be listing a home in Haiku in this range.

The $750,000 to $999,999 price range starts a transition in market composition. There are still some residential condominiums with deluxe cottages and the main homes of the condominiumized properties selling in this price range. This is also the price point where homes on two acres that have not been condominiumized become more frequent. There are even a handful of homes on two acres with cottages available. This part of the market saw a more modest increase in activity with 19% more sales than the first ten months of 2016.

Buyers will find more inventory available in the $750,000-$999,999 price range. This is due in part to a smaller pool of buyers. While this market space is a little less competitive, well priced properties can still generate bidding wars. There were a handful of full price or above asking price sales in this range.

The homes in the $1,000,000 -$1,499,999 price range in Haiku that sold this year tend to be more upscale homes on 2 or more acre lots and homes with cottages on two acre lots. This is the one price range in Haiku where sales activity was down over the first ten months of this year compared to the first ten months of 2016. Sales are currently almost 30% below the same period of 2017. That said, there are five properties currently pending in this price range. Those five sales would make up the difference in volume between the two years.

As you get into the even higher price point, the competition for properties continues to thin. None of the homes that sold in this price range sold for over asking price or even full price. That said, quality properties will still go quickly.

When you get to the $1,500,000 price range and above, you are entering a different part of the Haiku market. Historically, this has been a market segment that has seen limited activity. There are a broad range of properties in this price range. They can be larger homes on two acres in nice subdivisions. As you get higher in price, you may have some oceanfront homes added to the mix. If you get to even higher price points in the market, there are some significant estate properties in Haiku. There was a modest uptick in sales this year with one additional close over the same period of 2015. This is the one segment of the market where there is an abundance of inventory. The level of inventory would suggest that we have a buyer’s market at the highest price point of the Haiku market. While buyers may find there are a few motivated sellers, the sellers in this segment of the market tend to be deep pocketed and patient. Long days on market are par for the course in the upper price range of Haiku.

Haiku Land
I wanted to give a few quick thoughts on the land market. As noted in the market highlights above, there was an uptick in sales activity. More notable than the recent activity or even the current market activity is the upcoming new land development in Haiku. West Maui Land Company is set to release their new Haiku Town Development. The 31 agriculturally zoned lot development will be hitting the market within the next couple of weeks. I should say some of the lots will be coming to market. A good portion of the lots have already been reserved by employees and investors with ties to West Maui Land. The lots in the development range in price from the $400,000s up to just over $700,000. There is also one large acreage lot in the development priced in the $800,000 range. There is another land development forthcoming off of Lower Kauhikoa Road. The timing for that development is less clear. Considering the fact that the West Maui Land development was predicted to come to market during the first quarter of 2017, I will hold off on predictions on when this other development might hit the market. It will be interesting to see what this relative influx of land does to the overall Haiku land market. While I had thought the new supply might dampen recent appreciation, the volume of properties hitting the open market is a lot lower than what it could have been.

Haiku Market Outlook
The start of peak buying season is just a month away. While there is less amplitude between low and high season in a place like Haiku when compared to the resort markets, we may see a few more buyers poking around Haiku over the winter months. As it stands, I would anticipate that we will see a continuation of current market trends. The one place where I suspect activity may decrease some is at the lower price points in the market. Inventory is thinning at entry point to the market. Haiku would only be following the trends of other communities around the island that have seen decreased sales volume under $500,000. There is also some uncertainty on how the overall economic big picture will impact real estate. Interest rates are forecast to rise. Current tax reform proposals in congress are also less friendly to homeowners. It is hard to project what impact tax reform would have specifically on the Maui market and/or whether congress will pass a bill whatsoever. A more dynamic world makes it that much harder to predict our market.

You can check out the current Haiku MLS listings on MauiRealEstate.com. Contact The Maui Real Estate Team if you are considering buying or selling property in Haiku. We would welcome the chance to sit down with you to discuss your real estate needs.

Paia town is Maui’s bustling, bohemian surfer town. Situated on the North Shore of the island, the community has had an interesting history. Paia was once the island’s booming sugar town. A massive fire in town in the 30s led to a substantial decrease in population. In the 1950s, the community shrank again due to a decline in the sugar industry. The 1960s brought some new faces to town as hippies and the counter culture arrived on the North Shore of Maui. The 1980s brought another new wave of immigrants as the area became the premier windsurfing locations in the world. The 2000s saw Paia become renowned for other water sports including surfing, kite surfing and stand up paddling. Paia also started to pop up on various best beach town lists on a variety of magazines.

Increased national and international exposure has resulted in heightened demand for local real estate. It is an increasingly popular location for relocation and second home ownership. All the while, there has been minimal housing inventory added to the town since the early 2000s. The immediate prospects for growth seem limited with no formal developments planned. Although the recent sales of 339 acres of former cane fields to the West of the town could lead to development at some point on the horizon.

Increased demand and limited supply have put a lot of pressure on Paia’s real estate prices. It was the first community on Maui to see all time high prices coming out of the last real estate downturn. We wanted to take a look at how the Paia market has fared through almost seven months of 2017.

Just one quick housekeeping note before we delve into the numbers. Traditionally, the Spreckelsville neighborhood is included in Paia sales numbers by the local real estate association. We did not include Spreckelsville in this post having already done a separate Sprecks market update last week.

The map above shows market activity for the year to date in 2017. The green pins represent current listings. Yellow pins represent properties that are under contract. Red pins represent sales. You can click on the individual pins for more sales information on the individual properties.

While the map gives a visual reference of where current Paia listings and recent sales are located, the numbers below provide a clearer overview of the recent market activity.

• There have been 11 home sales for the year to date as of July 25, 2017. There are an additional seven homes under contract as of this time.
• By comparison, there were 21 sales during the same period of 2016. That means the 2017 sales volume is down 48% compared to last year.
• The median home price of the 11 sales is $700,000. The average sales price is $1,591,045. Over the same period last year, the median Paia sales price was $600,000. The average price over that time was $1,171,976. That is almost a 17% increase in median price and a 36% increase in average price when comparing this year to last year. While home sales were down across all price ranges, the biggest decrease in volume was at the low end. That is a big factor in the shifts in median and average price.
• The high sales price to date for the year was $7,000,000 for an oceanfront estate on Tavares Bay. The subject property located at 22 Wa’a consists of a 3 bedroom, 6 bath home with 7,384 square feet of living space and a 2 bedroom, 1 bath cottage with 936 square feet of living space. It is located on a 1.285 acre lot.
• There have been no condo sales or lots sold to date this year. Kuau Plaza, the one condo in this area, did not see any sales activity this year. Vacant land is scarce in Paia so this year’s goose egg for sale is not all that uncommon. Last year, there were two sales at Kuau Plaza and one oceanfront lot sold.

While the numbers above give a big picture view of the Paia market, I wanted to delve into a few specific neighborhoods around Paia.

Skill Village
Skill Village is a neighborhood of modest homes built largely in the 1980s. The neighborhood is located above the Paia Mill just a short walk from Paia Elementary School. Skill Village offers one of the lower entry points in to the Paia market. Over the last couple years, it has consistently been home to the lowest sale prices in the community. It has also seen pretty strong sales volumes. This year, sales volume has been limited with only two closes. There are an additional two homes under contract.

There are no active listings in SKill Village at this time. Additional sales activity will need to come from new listings. This is a microcosm of the greater Paia market with the lowest priced active listing priced at $884,000.

Kuau Bayview
Kuau Bayview has been one of the most in demand neighborhoods in all of Paia and arguably Maui. It was the first neighborhood on the island to see new record high prices coming out of the last downturn. Last year, the neighborhood saw another wave of new record sales prices. There were three sales during the first seven months of 2016. This year there has been a modest decline in activity with just two sales. Prices have not reached the heights that we saw last year, but the homes that have sold have been lesser in location, view and finishing than what sold the year prior.

Sales activity for the rest of the year will be dictated largely by inventory. There is only one active listing in the neighborhood at this time. There has been one additional home that has been on and off the market thus far this year.

Paia Oceanfront
Paia Oceanfront isn’t a true neighborhood per say. It is an area that stretches across multiple neighborhoods. It is a unique market unto itself due to its high price point. This year has seen two sales to date with an additional two oceanfront homes currently under contract. Last year, there were two oceanfront home sales and one oceanfront land sale that sold over the same time of the year.

The oceanfront market in Paia languished coming out of the downturn. There was a relative abundance of inventory and limited activity. The last two years have seen a change in conditions as activity picked up and the previously deep inventory started to be absorbed by the market. Some of that stems from overall market conditions, and some of that is based on sellers adjusting to the market. This year’s high sale of $7,000,000 came down from an original asking price of $10,500,000. The home had been on and off the market since 2010 and had been listed for as high as $15,500,000. Last year’s high sale of $6,000,000 came down from a previous asking price of $8,950,000. While both homes had huge sales prices, you could make an argument that the buyers were getting good value on their purchases.

It will be interesting to see if we continue to see additional Paia oceanfront properties go into contract this year. There are still six oceanfront listings so activity will not be constrained by inventory. The question is whether those homes are well positioned from a pricing stand point to attract buyers.

Overall Paia Market Outlook
What will the rest of 2017 bring for the Paia market? Looking at the current inventory and the number of properties under contract, I would imagine we will continue to see lower than usual sales volumes. As mentioned above, there are no properties for sale for less than $884,000 at this time. There is clearly demand for property at lower prices, there just isn’t any active inventory. We should continue to see appreciation in the market. Limited supply and strong demand will typically result in price increases. Those price increases will probably not be as dramatic as increases in median and average sales prices. The median prices and average prices should go up just based on the lack of lower priced inventory in the market.

Paia can be a challenging market for buyers. The limited inventory demands quick action when well priced properties come on the market. Finding the home for you could entail beating the bushes to find an unlisted property. With our office located in downtown Paia, we keep our eyes open and ears to the ground for opportunities. If you are considering selling in Paia, don’t let the market conditions fool you into thinking that the sky is the limit on pricing. Overpriced homes will sit even in Paia. With the heterogeneity of the Paia market, determining the right go to market price can offer its challenges. We would be happy to sit down with you to determine the market price and marketing strategy that will produce the best results. Contact The Maui Real Estate Team if you are considering buying or selling a property in the Paia area. You can check out the current Paia Real Estate inventory on MauiRealEstate.com.

Our office keeps close tabs on the the Spreckelsville neighborhood on Maui’s North Shore. It is just five minutes from our office. Our broker and one of our agents call it their home. Located between the airport and Paia town, this community is consistently one of the most in demand areas of the island. Limited inventory and desirable amenities help to keep prices elevated. Residents of “Sprecks” appreciate the beaches in the community, great wind and wave sports, the presence of the Maui Country Club and convenience to both Paia and Central Maui. Now that we are past the midway point of 2017, we thought it would be a good time to check in on the Spreckelsville Real Estate Market.

The map above shows active listings, properties under contract and 2017 sales. You can click on the individual pins for additional details on the properties.

Spreckelsville remains an in demand market during the first half of 2017. Pricing appears to be pushing upward. Limited supply is the one notable constraint. Here are some notable numbers for the Spreckelsville market as of July 20, 2017.

• There have been two homes sold and one piece of vacant land that have sold for the year to date. That is an increase over the two properties that sold to start 2016.
• Remarkably, all three properties that have sold were unlisted. Over the last couple of years, 40-50% of the properties sold in Sprecks have been unlisted.
• The sales were spread throughout Spreckeslville. The lot that closed was part of a recently subdivided property in Old Sprecks down near Baby Beach. The two houses were in the Kai Holu subdivision and Sprecks V subdivisions respectively.
• Two of the four properties currently listed are under contract with buyers.

Limited inventory is going to remain the limiting factor for the Sprecks real estate market during the remainder of 2017. The two active listings would represent neighborhood high sales if they close near their asking price. The condominium home at 600 Stable Road is listed for higher than Oli Oli Kai, last year’s record high sale. The lot at 0 Pa’ani (actually located off Nonohe) is priced higher than any lot previously sold in Spreckelsville. Based on recent trends, it is just as likely that additional sales might come from an off market property.

Contact The Maui Real Estate Team if you are interested in Spreckelsville Real Estate. Our neighborhood experts Billy and Martin would be happy to share their experiences as long term neighborhood residents. We are also keeping our eyes open and ears to the ground for unlisted opportunities. If you are a current Sprecks property owner, contact us for a free market evaluation. You can check out the current Spreckelsville Real Estate Listings on MauiRealEstate.com.

We recently posted on a surge in activity in the South Maui Vacation Rental Market. Wailea and Kihei both saw a big increase in condo sales for the year to date. West Maui is home to the other big concentration of vacation rental condos on island. The West side has not been the best side for sales this year. Condo activity is off compared to 2016. This post takes a look at sales activity in the different areas of West Maui, looks at a few condos that have seen stronger activity and takes a look at a couple of factors that could be driving the slower sales on this side of the island.

As of June 7th, there have been 145 vacation rental condos sold in West Maui this year. As of the same time last year, there were 176 vacation rental condos that sold in West Maui. That is an 18% reduction in sales volume. I broke down the sales by price ranges to try to see if the decrease in activity occurred across the board. Condo sales $500,000 and under were down 22%. There were 57 sales this year as compared to 73 last year in this price range. The middle part of the market between $500,001 and $1,000,000 performed the strongest of any market segment with a modest increase of 4.6% over last year. There were 67 sales compared to 64 over the same period of 2016. The high end of the West Maui vacation rental market saw the steepest decline in activity of any market segment. Sales were down 51% for vacation rental condos priced from $1,000,001 on up. There were 23 sales compared to 45 sales over the same period of 2016.

Lahaina Condos
The Lahaina condo market was the one area of West Maui that saw an increase in activity compared to last year. Lahaina has a small number of vacation rental condo complexes with four total properties. Those four complexes saw activity increase by 35% for the year as of June 7, 2017. It was a good five plus months of sales in Lahaina, but one condo stood out above the others.

Aina Nalu
Aina Nalu is located one block off of Front Street in historic Lahaina Town. There are 190 units at the complex spread over 11 buildings on 18 acres. There are studio, one bedroom and two bedroom floor plans. Prices range from the $300,000s for one bedrooms to the low $400,000s for two bedrooms. Owners value the grounds, the two nice pools, the tropical design elements and the location. If you were so inclined, this is a place where you could stay without driving your car with Front Street so close by. The property had 5 sales through just over five months of 2016. As of June 7th, there were 12 sales in Aina Nalu. That is an impressive 240% increase in sales activity.

Ka’anapali Condos
As you head North from Lahaina, the Ka’anapali condo market has seen a dip in condo sales activity for the first five months of the year compared to the same period of 2016. Sales slipped from 63 sales to start 2016 to 42 sales as of June 7, 2017. That is a 33% decrease in activity. The decrease in sales was almost across the board with only Ka’anapali Royal registering more sales this year than last year with 4 sales compared to 2. While I typically focus on the condos that stand out among the crowd for higher sales activity, I wanted to take a look at the condo complex that saw the biggest dip in activity.

Honua Kai
Honua Kai is the last fee simple whole ownership condo to be built in the Ka’anapali Area. It has 711 units spread over two seven story towers on 40 acres. The Hoku Lani tower was completed in 2009 and the Konea tower was completed in 2010. Honua Kai has extensive amenities including three separate pools and an onsite restaurant, grocery store and spa. It has studio, one bedroom, two bedroom and three bedroom condominiums. Prices range from the high 600s for a select few mountain view one bedrooms up to over $5,000,000 for the best located three bedroom units. People who own at Honua Kai appreciate the significant amenities, the beachfront location, the newness of the location and the rental demand.

Honua Kai has had a big impact on the West Maui Condo market since 2005 when they started taking the first round of pre-construction reservations. Those reservations generated a significant number of sales during the doldrums of the post crash real estate market. This goosed the condo sales numbers when overall demand was low. I dubbed this distortion of the statistics The Honua Kai Effect.

June of 2016 was the last new developer sale at Honua Kai. There were 15 new developer sales between January 1, 2016 and June 7, 2016. That gives some context before I provide this year’s sales numbers. There were 14 Honua Kai Sales for the year as of June 7th. Last year, there were 32 over that same period of time. That is a 54% drop in sales volume. The new developer sales account for most, but not all of the difference between this year and last year’s sales volume.

Honua Kai remains a popular choice for West Maui condo buyers. While we saw a big dip in activity, it still saw more sales than any other West Maui condo.

Napili, Kahana, Honokowai
The three communities located between Ka’anapali and Kapalua offer the greatest concentration of oceanfront condos in West Maui. It was another area that has seen a decrease in activity in 2017. There were 57 sales in this area five months and a week in to 2017. That is down 22% from the 73 sales through the same period of 2016. The bulk of the condo complexes in this area saw a decrease in activity with a few exceptions.

Papakea
Papakea is an oceanfront complex in the Honokowai area. It has 364 condos spread over 11 buildings on just over 12 acres. There are studio, one bedroom and two bedroom floor plans. This complex is predominantly fee simple, but there are some leasehold units. Papakea has a pretty broad range of prices. Leasehold one bedrooms start right around $200,000. The most expensive units are direct oceanfront two bedroom units. They sell for as much as $1,000,000. Owners like the oceanfront location, amenities and relaxed feel. Papakea had a pretty good start to 2016 with 10 sales in just over five months. This year was 40% better with 14 sales in the same period of time.

Kapalua
While most of West Maui was either markedly stronger or weaker this year compared to last year, Kapalua has been pretty steady with the same number of sales this year as last year. There were 14 vacation rental condos sold this year as of June 7th, compared to 14 over the same period last year. While the overall numbers were the same, there were some shifts in activity among the five complexes that allow vacation rentals. I wanted to highlight the one condo that saw the biggest increase in activity and the highest number of sales overall.

Kapalua Golf Villas
Kapalua Golf Villas is situated along the beautiful Kapalua Bay Course. There are 186 units spread over 16 buildings on 15.8 acres. Amenities include three pools. The property went through extensive renovations in 2014. Prices range from the high $500,000s for one bedrooms lower on the golf course to just under a million for fully upgraded two bedrooms with good ocean views. Views, finishing and floor plans are the primary drivers on price. Kapalua Golf Villas offer the lowest priced entry point into the Kapalua Real Estate market. Owners appreciate the location on the Bay course, the views and the proximity to Kapalua Beaches and to other resort amenities.

Kapalua Golf Villas has been the busiest of the Kapalua condos in 2017. There have been 7 units sold as June 7th. There were 4 sold over the same period last year. That is a 75% increase in sales activity.

What’s Driving the West Maui Market
South Maui vacation rental condos have been booming this year while West Maui has been slower. They are two seemingly similar markets. What is driving the difference in market behavior? I was able to give some pretty good reasons as to why I think the South Maui market has surged to start the year. Determining what might be holding things back in West Maui is a little more challenging. The one clear cut cause was already discussed. Honua Kai is seeing less activity now that it is just resales and there are no more new developer listings.

Are there any other factors keeping down West Maui sales numbers? The state of Kahana Bay may be impacting sales. This section of West Maui coastline has significant erosion issues. Hololani has been struggling with erosion issues for a number of years. Those issues expanded down the coast last year. Royal Kahana and Valley Isle Resort had to put up emergency sandbags during the winter of 2016 to halt a rapid loss of shoreline. There are now nine condo associations that are a part of efforts to develop a shoreline replenishment plan. With the cost of beach replenishment expected to approach ten million dollars, the individual owners in those nine complexes are facing a big assessment to pay for the project. While the numbers of condos sold in the nine complexes this year is pretty similar to what we saw last year, the uncertainty over this coastline and the potential future costs may be limiting the potential for growth in this market.

The one other factor that could be at play is plain old variability. We see that in the market from time to time. Some years West Maui has stronger years for sales activity and some years it is South Maui that has a big year. The underlying reasons aren’t so clear cut. This may be just one of those years for West Maui. When you add in the other factors previously mentioned, those three things in and of itself could account for the 18% drop we have seen. If you are a close follower of the West Maui market and you have any other theories, we would welcome your input in the comments below.

The good news for potential buyers is that there is still a lot of inventory in this market. This is particularly the case with condos priced from $500,000 and up. You can search through the current inventory of Kapalua Condos for Sale and Ka’anapali Condos for sale on MauiRealEstate.com. You can also search the MLS for condos listed in Lahaina, Napili, Kahana and Honokowai. Contact The Maui Real Estate Team if you want to talk to a real estate agent about West Maui Vacation Rental Condos. We would welcome the chance to learn more about what you are looking for and to assist you in your search for a condo that will fit your needs.

It has been a while since I have done an island wide stats post. After over ten years, I was struggling with rehashing the same format on a monthly basis. I decided to take a different approach this month. Rather than barraging you with lots of numbers, I wanted to try to distill the numbers into a few key takeaways. I also am gong to try to do this on a quarterly basis. With our smaller market, I think there is some merit to looking at slightly longer time horizons to overcome some of the variability we get on a month to month basis. Hopefully, those two changes will make for a better and more informative read. Without further ado, Here are my three key takeaways from the first quarter of 2017 followed by a some thoughts on what we may expect over the next few months.

1. Scarcity was the biggest driver of the Maui Real Estate market for the first three months of 2017. This was particularly true in the home market under $1,000,000. The lack of inventory in this price range has resulted in a lot of bidding wars and upward pressure on pricing. It also meant a decrease in sales volume as there just aren’t as many homes to sell. Buyers are out looking, but they are having a tough time getting into places. This is reflected in the stats with median prices up 15% compared to the first three months of 2016 and sales volume down 5%. The March median home price of $769,000 was the highest that we have since 2006. Again, this really hammers home the scarcity of listings at lower price points.

Scarcity is not a Maui specific phenomenon. It is happening throughout the United States. I was listening to Jill Schlesinger of CBS on Here and Now. She talked about the factors constraining the housing stock nationally. She cited a Baby Boomer generation that has not been quick to sell their homes at retirement. There are quite a few members of that generation who are choosing to modify their homes so they can age in place. Schlesinger also said that a lot of homes were acquired by private equity companies during the last downturn. They have kept those properties as rentals rather than putting them back on the market. I am not sure that the same factors are in play on Maui. For one, private equity firms were not buying property in big numbers on island. I think the biggest constraint we are seeing on Maui is a lack of new construction. New construction is not even coming close to keeping pace with population growth. It takes a longer period of time for new developments to get off the ground on Maui and many times they will fizzle out in between market cycles. We are also seeing a lot of new development occurring at higher price points in the market and less development occurring at the entry points of the market where demand is highest.

2. Luxury Real Estate Sales Trend up and Shift South. Luxury home sales were up in the first quarter of the year. There were 16 sales over the first 3 months of 2017 compared to 11 over the first 3 months of 2016.

Over the last couple of years, luxury home sales have been stronger in West Maui compared to South Maui. Launiupoko has led the charge with Kapalua and Kaanapali following close behind. There were eight sales in West Maui over $2,000,000 during the first 3 months of 2016. There was a a solitary sale in South Maui during that period. This year, there were four sales in West Maui over $2,000,000, and there were eight sales in South Maui over $2,000,000. Makena market activity was particularly notable with four sales over $9,000,000. It is hard to account for the shift in sales volumes between the different part of the island. Sometimes it just depends on the comparative quality of the inventory. Makena may also be seeing a bump due to the development of the Makena Golf and Beach Club. While none of the four sales in Makena were part of this development, this ultra high end development from Discovery Land Company may be drawing some affluent buyers to explore more immediate options for purchase outside of the new development.

There was also an uptick in luxury home sales outside the resort areas. There was a single sale in each of the communities of Hana, Haiku, Kula and Paia.. That compares to a single sale outside the resorts during the first three months of 2016.

The luxury condo market saw some similar trends. Sales were up overall. There were twenty-three sales over $1,500,000 during the first few months of this year compared to seventeen during the first three months of 2016. Twenty of the sales were in South Maui during 2017 compared to nine last year. Conversely, West Maui has seen a dip in activity with three closes compared to eight in 2016. Some of that can be attributed to a decrease in inventory in Honua Kai. All of the developer units have sold there which means we are now depending exclusively on resales.

3. Overall, the condo market had strong start during the first quarter of 2017. Condo sales do not seem quite as constrained by inventory when you look at the sales volume. Sales volume is up 17% compared to last year***. Almost all of that growth in activity can be traced back to the vacation rental condo market.

The vacation rental market had been in the doldrums for the previous couple of years. Much of that can be attributed to a decrease in demand from our neighbors North of the border. The Canadian Dollar has slumped after a number of years of parity. As a result, we saw relatively limited activity and a glut of inventory in some of the more popular vacation rental condos in the Kihei area. That appears to have shifted during this buyer’s season. Overall, sales of vacation rental condos were up 48% county wide. In Kihei, sales of vacation rental friendly condos were up 73%.

It is hard to attribute an exact reason for the sudden boom in the Kihei condo vacation rental condo market. While we may be seeing a few more Canadian buyers, the Canadian dollar remains far below the peak that prompted the last wave of Canadians. I surmise that there may be a number of factors at play. The concept of vacation rental ownership is being more ingrained into people’s psyche as companies like Airbnb become more prominent. A number of our domestic feeder markets are feeling their own real estate booms. West coast markets like Seattle, Portland and much of California continue to see strong activity. We also have seen a sustained bull run in the stock market that may provide people with the discretionary capital to make a second home purchase.

As with the luxury condo market, West Maui hasn’t seen quite the same level of activity for the general vacation rental condos. Numbers are down slightly in West Maui for condo sales. Again, Honua Kai plays a part in the lack of activity. This condo complex has been the driving force in West Maui condo sales in all price ranges since 2010. With the remaining inventory higher priced resale units, sales have slowed substantially at Honua Kai.

What can we expect over the next few months?
There is no immediate relief coming with the housing supply issues on Maui. On the demand side, island rents remain high and interest rates are still comparatively low. Barring a cataclysmic shift in the economy or a major upheaval in global politics, market conditions should remain similar to what we saw in the first quarter of the year. That means that competitive bidding will likely remain the norm for well priced homes in the $1,000,000 and under price range. You may even see a few bidding wars at well priced homes over $1,000,000. This can be a frustrating time for buyers as strong offers can still be trumped by irrational exuberance. That said, buyers should remain patient, make sure they have their ducks in a row when it comes to financing, be realistic about their financial picture and act decisively when properties that meet their needs come to market. While this is a seller’s market, there is some variability in demand by town and even neighborhoods on the island. Not everywhere is booming so sellers should consult closely with their Realtor and study recent sales to develop a realistic market price. Contact the Maui Real Estate Team if you are considering buying or selling property on Maui. We would welcome the opportunity to sit down with you face to face or to talk on the phone to discuss your real estate needs.

***Note the numbers reported for vacation rental condo sales are not 100% accurate. It is not a mandatory field in the Maui Multiple Listing Service to report whether or not a condo may be vacation rented. As a result, vacation rental condo sales can be under reported.