Paia town is home base for the Maui Real Estate Team. It also happens to be one of the more in demand real estate markets on island. A bohemian vibe, Plantation town charm, access to great water sports, galleries, good restaurants and shopping have made this little town internationally renowned. We want to take a look back at how the Paia market performed in 2016 and how it might perform in 2017.

One quick note, typically the Spreckelsville neighborhood is lumped in with Paia when people talk about Paia real estate. We believe Spreckelsville is somewhat unique within Paia and opted to exclude it from this overview. We did a separate Sprecks market update at the end of 2016.

The map above shows the 2016 sales as well as the one 2017 sale that was based on a contract from 2016. You can click on individual pins on the map for additional details on the sales.

Looking back at the year in sales, there were some notable numbers that I think are worth highlighting.

• There were 31 homes sold in Paia and Kuau during 2016 with a median sales price of $600,000 and an average sales price of $1,119,216. In 2015, there were 26 home sales with a median price of $587,000 and an average price of $701,942. That is a 19% increase in volume, a 2% increase in median price and a 59% increase in average price.
• The highest priced home sale was $6,000,000 for an oceanfront estate in Kuau. The property consists of a 4 bedroom, 4.5 bathroom home with 6,258 square feet of living space and a 1 bedroom, 1 bathroom cottage with 1,050 square feet of living space on approximately 1.283 acres of land. Last year, the high sale was $2,995,000 for a single family oceanfront home on Kuau Point.
• This year’s high sale was one of three transactions to close for over $4,000,000 in Paia and Kuau during 2016. All three properties were oceanfront.
• The lowest priced home sale was $455,000 for a 3 bedroom, one bath house with 1,104 square feet of living space on a 6,791 square foot lot. This home is located in the Skill Village Neighborhood. The 2015 low sale was $345,000 for a three bedroom, one bath home with 1,080 square feet of living space on a 6,599 square foot lot.
• There were three condo sales in 2016 at Kuau Plaza. Kuau Plaza is the only condo in the Paia/Kuau area. The highest of the three sales closed for $325,000.
• There was one land sale in Paia in 2016. This oceanfront .432 acre lot closed for $2,950,000. There were no land sales in Paia in 2015.
• There were no bank owned properties or successful short sale transactions that closed in Paia during 2016.

While the numbers above give you a glimpse into market activity in Paia and Kuau as a whole, I also wanted to take a look at some of the individual areas and neighborhoods around Paia.

Kuau Bayview
Kuau Bayview has been one of the strongest performing neighborhoods on the island. It was setting all time high prices before any other neighborhood on the island during this market cycle. The neighborhood holds a lot of appeal to buyers due to location, walkability, consistent pride of ownership and in some cases views. Last year was another strong year for the neighborhood. Record sales prices were set not once but three times. The current record high of $952,000 pushes Kuau Bayview pretty close to the $1,000,000 threshold. In addition to the three high sales, there were two other smaller floor plan sales. The five total sales for 2016 was up sharply from the single sale in 2015. That said, it is worth noting that sales volume in this neighborhood tends to be more of a reflection of available supply instead of demand.

North Shore Village
North Shore Village was the last new development built in Paia. It is hard to believe that it was completed 14 years ago. There were only two sales in the neighborhood in 2016, but one was quite notable. 21 Hoku sold for $750,000. That is a new record high sale by a considerable margin. It sold for 13% more on a cost per square foot basis than the other sale in the neighborhood which only closed 4 months prior. On a cost per square foot basis, it was 19% higher than the previous neighborhood high sale. It will be interesting to see if that will be the new standard or if that sale is viewed as an outlier by future buyers.

Skill Village
Skill Village is another neighborhood that had a record high sale in 2016. A four bedroom, three bathroom home sold for $680,000 in September. It also remains the busiest neighborhood in Paia for sales volume. This was the second straight year with 9 transactions. While the recent high sales price may suggest otherwise, Skill Village provides the most opportunity for buyers who want to get into Paia for below the island’s median sales price for homes.

Oceanfront Paia
While Paia has seen a strong real estate market since the start of the recovery, Paia oceanfront has been slower. There has been a lot of inventory and relatively few sales. We saw a change in dynamics during 2016. After just one sale per year in 2014 and 2015, we saw four transactions in 2016. There were three oceanfront home sales and one land sale.

2017 Market Outlook
After a strong 2016, the big question is what should we expect during 2017 in the Paia Real Estate market. There are few things that I think will drive the market.

Inventory tops the list of market drivers. Island wide, we have seen home inventory shrink. Paia is seeing a more acute decrease in active listings than most other parts of the island. There are currently only 14 active home listings in Paia and Kuau. Three homes are currently under contract. Of the active listings, only five listings are priced less than $1,000,000. The one home priced for less than $500,000 is a short sale facing foreclosure. It also happens to have four additional liens on the property. The lack of available inventory makes it hard for me to imagine that we will come close to last year’s sales volume.

Low inventory and continued demand are a dynamic that is likely to provide continued upward price pressure in the Paia market. Interest rates are something that could prove to be a counterweight to the lack of inventory. Conventional wisdom suggests that we are going to continue to see increases in rates throughout the year. If that comes to fruition, I would suspect that might limit the increase in values particularly in the bottom of the half of the market. Entry level buyers face a tough barrier with current pricing in Paia. Increases in rates will make the cost of ownership that much higher.

We may also look at recent market history for a forecast of the future. Paia has seen significant appreciation since the last downturn, but appreciation has not been linear. If I were to chart values over the last four years, it would likely look like a stair case. Strong increases in value were followed by a pause in values as the market would seemingly catch its breath. Kuau Bayview is a good example of this dynamic. That neighborhood saw a series of record high sales in 2013. The next year and most of 2015 were pretty quiet due to a lack of inventory and sales. As mentioned above, 2015 saw the neighborhood high sales mark broken three times. If the pattern continues, we might see a quieter 2017.

One segment that will be interesting to watch is the oceanfront home market. This price range tends to be less interest rate sensitive due to the higher percentage of cash transactions. The last year was the strongest year since the downturn and one of the strongest overall historically for Paia and Kuau Oceanfront. Part of that stems from sellers adjusting to the market. The high sale for the year closed well below replacement cost. There is currently one oceanfront home under contract, and sellers have continued to adjust their pricing hoping to find the market. I would anticipate the oceanfront market might remain more active particularly if sellers continue to adjust prices.

The Future of Paia Real Estate

The strength of the Paia market over the last 15 years has been a simple case of supply and demand. Demand has only increased over the years as the town has become more and more renowned. Paia has made a couple of lists for the Best Beach Towns in America. Numerous other publications have cast the spotlight on Maui’s hip beach town. For each new article, there seemed to be more buyers of Paia real estate. All the while, supply has been practically unchanged since North Shore Village was built back in 2003. The town’s growth has been limited by the surrounding cane fields. The closing of the sugar plantation in December of 2016 may mean the end of that growth barrier.

There has already been one large parcel of land sold to the West of town. A 340 acre parcel directly to the West of Paia sold for $9,900,000 in January. The agriculturally zoned land is on the Mauka (Mountain) side of Hana Highway. The land runs from the town’s parking lot and mini bypass up towards the mill and heads West towards Baldwin Beach Park. Plans for the land have not been presented to the public. The coconut wireless has suggested 16 high end agricultural lots with the potential for mixed use development along Baldwin Avenue closer to the mill. I don’t anticipate that development will happen quickly. The subdivision process can be lengthy on Maui. If any rezoning is done, that could lead to additional delays.

While we are unlikely to see changes over the next couple of years, the cane fields may no longer serve as a limitation for growth. Some of this cane land will become ranch land. Still more areas could be sold off for future development.

Buying and Selling Paia Real Estate
You can see all of the Paia Area Real Estate Listings on MauiRealEstate.com. Our office is located in the heart of town in Paia Plaza at 71 Baldwin Avenue. Our agents live in the area and have decades of experience in this market. We watch the market closely and keep our ears to the ground for properties coming up for sale. Contact The Maui Real Estate if you are interested in buying or selling in Paia.

What makes Spreckelsville one of the more desirable communities on island? Convenience, access to water sports and beaches, proximity to Paia, proximity to Central Maui and a neighborhood golf course at the Maui Country Club. While demand may be high, the neighborhood sees limited turn over. When you have all the amenities of Spreckelsville, there aren’t many reasons to move. The post below outlines how the Spreckelsville Real Estate market fared in 2016 and gives a few thoughts on what we might expect in the coming year.

The map above shows the current active listings and the 2016 sales. Click on the individual pins for more details on the properties.

Spreckelsville continued to see signs of upwards price pressure during 2016. While volume wasn’t extraordinary, it was largely a reflection of supply. Here are some notable numbers from the 2016 Spreckelsville sales.

• There were five homes and one Sugar Cove Condo sold this year.
• Two of the five homes were sold prior to being listed. That continues a recent trend in the neighborhood that reflects demand for the area.
• The Oli Oli Kai sale was the highest ever price for a property in the North Shore or Upcountry area. 120 Ulupua was the highest ever sale in the Sprecks V subdivision.
• Sales were spread throughout Spreckelsville with one close on Stable Road, one sale in E Paepae Ka Puko’a, two sales in Old Sprecks and one sale in Sprecks V.

What will 2017 bring for this in demand North Shore neighborhood? Supply is going to be a limiting factor with only four active listings currently. If all four listings were to sell close to their current asking prices, they would be a testament to rising values. All of the listings would be a record of some kind for their property type. 600 Stable Road is priced higher than any previous home sale on the North Shore or Upcountry. 0 Paani is priced above any other lot to have sold in Sprecks. 204 Kealakai would be the highest priced non-oceanfront home sale in Spreckelsville. 2464 Waipua would have the highest cost per square foot for any home in Sprecks V and the second highest sales price in the neighborhood.

The Spreckelsville area is near and dear to the Maui Real Estate Team. Our broker Billy and agent Martin both call the neighborhood home. Either one would welcome the opportunity to talk to prospective buyers about their experiences living in the area. We keep a close eye on the market and an ear to the ground for unlisted properties. If you are a Sprecks resident considering selling or just wonder what you home might be worth in the current market, we would be happy to provide for a free evaluation of your home’s value and to discuss how we might be of assistance. Contact us today for assistance. You can see the current Spreckelsville Real Estate Listings on MauiRealEstate.com.

Why is the Maui condo market showing signs of improvement in 2016? That is one of the questions, I asked myself in this post and did my best to answer by taking a deeper dig into this year’s condo sales. You will find all of those thoughts and a rundown on the overall July 2016 Maui Real Estate Stats. Without further ado, here are the July numbers and some thoughts and context on the market.

July 2016 Median Prices and Sales Volumes

There were 93 home sales with a median price of $600,000. In July of 2015, there were 129 sales with a median price of $590,000. That is a 28% decrease in volume and approximately a 2% increase in median price.

There were 110 condos sold for a median price of $440,000. Last July, there were 94 sales with a median sales price of $394,000. That is a 17% increase in median price and a 12% increase in median price.

There were 7 land sales with a median price of $490,000. There were 13 sales in July of 2015 with a median price of $250,000. This is a 46% decrease in volume and a 96% increase in median price.

Notable Numbers from the July Real Estate Sales Activity
While compiling the sales volumes and median prices, I came across some other noteworthy numbers.

• The highest priced home sale in July closed for $18,000,000. The Beachfront Oli Oli Kai Property on Stable Road in Spreckelsville closed for a new North Shore record. That said, it could of or maybe should have been classified as three separate sales. The property was condominiumized into three separate units. The three units included a total of three homes and approximately 3.6 acres.
• This was one of 7 home sales over $2,000,000. The six other sales included three properties in Lahaina and one sale each in Wailea, Kula and Ka’anapali.
• The highest priced condo sale closed for $3,850,000. The 3 bed, 3.5 bath unit at Montage Kapalua has 2,789 square feet of living space.
• That was one of 10 sales over $1,500,000 to close in July. The other sales included 2 closes at Ho’olei and one each at Ka’anapali Ali’i, Sugar Cove, Wailea Elua, Makena Surf, Honua Kai, The Whaler and The Palms at Manele.
• The high land sale for the month closed for $1,800,000. The four acre lot is located in Kapalua Plantation Estates. There was one other $1,000,000 plus land sale this month. That 17.47 acre lot is located in the Makila Ranch Area of Launiupoko.
• There were 13 bank owned properties that closed in July. That is down from the 20 that closed in July of 2015. There was only one successful short sale completed last month compared to the 8 completed in July of 2015.

New July Pending Sales Contracts
We track the number of properties that go pending in a particular month. It gives us a more recent data point on buyer demand and it also helps us to better suss out whether the prior month’s sales activity is something of a one off event or part of a broader trend. I will spell that out a little better as we review last month’s pending data.

Looking at the pending sales activity, the number of homes that went under contract in July was down compared to last year. The number of condos that went under contract was the same as last year and land pending sales were up ever so slightly. The decrease in home sales is part of what appears to be a continuing trend that we have seen over the last few months. Shrinking home inventory, particularly at lower price points, has led to a reduction in sales activity. The condo market appears to be continuing a recent trend of sales at or above last year’s totals. I will delve into that in more detail below. While land sales aren’t exactly booming, it was good to see that they were up slightly from last year. That would suggest that the low July land sales numbers were more of an outlier than the start of any sort of trend.

Thoughts on the Market
We have discussed the decreases in home sales volumes over the last few posts, but I haven’t talked a whole lot about the increase in condo sales activity. Of the 7 months of sales this year, one month had the same sales volume as the same month from 2015, and one month was down from the same month last year. Five of the months have experienced greater sales volume than the same month of 2015. The last four months have all seen an increase over the same month of 2015. Over that period from April-July, sales volumes are up 14% compared to the same period of 2015. That raised the question of why we may be seeing an increase in activity. I dug into the sales data a few different ways to try to see if I could come to any conclusions as to what is driving the increase in sales activity.

The first thing I did was break down the sales volume over the last four months by price point.

I can’t say that this breakdown provided me with a clear picture of the driving force behind price increases. We can see an increase in sales below $300,000 and an increase in the $1,500,000 and higher range. The middle price ranges tend to be a mixed bag. The biggest increase in activity of any price range occurred between $500,000-$749,999. I can’t say off the top of my head why that would have occurred. The middle of the market, so to speak, also included the only two price points where sales were down compared to last year. The remaining price ranges saw relatively limited increases over 2016.

Not feeling like I had a clear answer, I took a look at two other data points. The first data point is is whether or not the property allows short term rentals. This data is somewhat flawed as it is not a mandatory field in our multiple listing service. In other words, not every condo sale that occurred over the last month reported whether or not the condo allowed vacation rentals.

It is pretty clear that there was an increase in sales for properties that are reported to be vacation rentals. I calculated a 26% increase over the period between April 1, 2015 and July 31, 2015. It was interesting to note that the increase in vacation rental condo sales was particularly evident in the $500,000-$749,999 price range. That appears to point to a significant driver for sales activity in that price range.

The one other data point I wanted to look at was new developer sales. New developments can be market drivers that boost the overall sales activity. In some cases, the boost can mask other market trends. An example of this is when Honua Kai started to close a lot of condos while we were still in the thick of the downturn. Overall condo demand was low, but sales numbers were relatively high as buyers were closing on contracts that were originally written pre-construction during the peak of the real estate boom. From what I could glean, we haven’t seen a similar phenomenon over the last four months. There was an uptick in new development sales. I counted 29 new development sales from April 1, 2016-July 31, 2016. That is up from 23 sales during that same period last year. However, the vast majority of these contracts were written recently.

While I can’t say I have definitive answers on what is driving the recent uptick in condo sales, the data above points to three price ranges where the improvement was most prevalent and a type of condo that saw more activity. Based on anecdotal evidence and the quantitative evidence, I am going to postulate a few reasons for the increases in each of these segments. The increase in sales at the low end is a reflection of the continued strength of the buy over renting argument on Maui. Maui rental rates have soared. Low borrowing costs make owning a number of Maui condo less expensive than renting. As long as rents remain high and rates remain low and inventory is sufficient, that part of the market should continue to be busy. I can’t say definitively why the high end market is outperforming last year in terms of sales. When I look at the luxury home market, sales totals between 2015 and 2016 have been almost identical. It just seems as if high end buyers are gravitating more towards condos this year. I believe the increase in vacation rental condo sales, and in the $500,000-$749,999 range in particular, is a reflection of pretty strong consumer confidence among some mainland buyers. West Coast real estate markets have been strong and the stock market has performed well. This means more cash for discretionary purchases like a vacation rental condo on Maui.

A Few Closing Thoughts for Maui Buyers and Sellers
I think there are some things to be learned for the overall Maui market from my review of the condo numbers. The biggest is that there is variability in the strength of the market by price point. I think you can also add geographic variability as another factor. Not all communities are seeing equal levels of buyer demand. While these stats tend to paint the market in broad brushes, how buyers and sellers approach the Maui market is going to be a reflection of their specific segment of the market. Contact The Maui Real Estate Team if you are interested in buying or selling a property on Maui. We would welcome the chance to hear about your needs and to discuss market conditions that are most relevant to you.

It’s almost the end of the month so I wanted to make sure I squeezed in a June stats post.This is something of an abbreviated post with more numbers and less analysis. I will give a few more thoughts on the state of the market in the July stats. Without further ado, here are the numbers.

June Real Estate Sales Volumes

There were 98 homes sold in June with a median home price of $657,000. Last June there were 101 homes sold with a median price of $650,000. That is a 3% drop in sales volume and a 1% increase in median price when comparing this June to last June.

There were 110 condos sold in June with a median price of $384,000. In June of 2015, there were 99 condos sold with a median price of $355,000. That is an 11% increase in sales volume and an 8% increase in median price.

There were 13 lots sold in June with a whopping median price of $1,200,000. Last June, there were 14 sales with a median price of $420,000. That is a 7% decrease in volume and a 285% increase in median price.

Notable numbers from the June Real Estate Sales Activity
While compiling the stats above, I came across some other notable numbers worth sharing from the June sales activity.

• The highest home sale price in June was $7,000,000. This Makena property includes almost 10 acres of land and two pole homes. It is close to Big Beach.
• That was one of 5 home sales over $2,000,000. The other sales were for properties in Kihei, Kapalua, Launiupoko (Lahaina), and Hana.
• The highest price condo to close in June is located in Wailea. The 3 bedroom, 3.5 bath condo Ho’olei in Wailea sold for $2,850,000.
• That was one of 8 condo sales in June sold for $1,500,000 or more. There was one more Ho’olei sale and two sales in Wailea Elua. There were individual sales of $1,500,000 or higher at Ka’anapali Ali’i, Maui Ka’anapali Villas, Honua Kai and Makena Surf.
• The highest priced land transaction closed for $2,950,000. This oceanfront lot in the Kuau area of Paia consists of 18,861 square feet of land.
• This was one of 7 land sales over $1,000,000 in June. That is a pretty extraordinary number. Five of these sales were in Launiupoko. They were part of the new Makila Ranch subdivision of Launiupoko. The one other sale was in Haiku.
• There were 12 bank owned sales that closed in June. That was down just a little from the 13 REO sales in June of 2015.
• There were 2 short sales that closed in June. That is down significantly from the 8 short sale transactions that closed in June of 2015.

June Pending Sales
All of the numbers discussed prior to this point were from properties that sold in June. We also wanted to take a look at the properties that went under contract with buyers in June. This will give us a little better sense of more recent market activity and demand.

June marked the second month in a row where pending home sales were down. I don’t believe this is a reflection of decreased demand as it is a reflection of limited inventory for first time home buyers. I expect this trend to continue with lower sales volumes and higher median prices due the decreased number of entry level homes available for sale. The condo market continues to follow recent trends of outperforming 2015. The land market pending sales are skewed a little by new development sales that showed 0 days on market. These were contracts that were likely written before this month.

Wrapping it all up
I don’t have a whole lot of in depth analysis to offer this month. We have seen fairly steady market demand overall with pockets of greater activity based on geography and price point around the island. As mentioned directly above, I believe the lack of lower priced home inventory will continue to impact the total numbers of homes sold. Contact The Maui Real Estate Team if you are thinking of sticking your toes into the waters of the Maui Real Estate market. We would welcome the chance to sit down and learn about your real estate needs and give our thoughts on market conditions specific to the properties that might fit your needs.

Don’t be surprised to see a big spike in median home prices in Maui in the near future. Read on to find out why. This is our look at the May Maui Real Estate Statistics. We take a look at median prices, sales volumes, new pending sales in May and notable numbers. We also give a few thoughts on what it all means. Without further ado, here are the May numbers.

Maui Sales Volumes and Median Prices

By my count, there were 94 homes sold in May with a median sales price of $622,500. In May of 2015, there were 88 sales with a median price of $607,097. That calculates to a 7% increase in sales volume and a 2.5% increase in median price.

There were 118 condos sold in May with a median sales price of $423,500. Last May, there were 110 sales with a median price of $459,500. That calculates to a 7% increase in sales volume and an 8% decrease in median price.

There were 14 land sales with a median price of $378,500 in May. There were 12 sales in May of 2015 with a median price of $380,000. That is roughly a 17% increase in sales and around a half of a percent drop in median price.

Notable Numbers from the May Maui Real Estate Sales Activity

• The highest priced home sale last month on Maui was $6,000,000. The oceanfront estate in the Kuau area of Paia included a 4 bedroom, 4.5 bath home with 6,258 square feet of living space, a separate 1 bedroom, 1 bath cottage with 1,0125 square feet of living space on a 1.28 acre lot.
• That was one of 7 home sales over $2,000,000 in Maui during May. The other big closes included 2 sales in Wailea, 2 sales in Kapalua, and one sale each in Kula and Lahaina.
• The highest priced condo transaction last month closed for $4,150,000. That was a 3 bedroom, 3.5 bath condo with 2,789 square feet of living space at Montage Kapalua.
• The Montage sale was one of seven condo closes of $1,500,000 or greater in May. The other closes included 4 sales at Honua Kai, a Kapalua Ironwoods and a Mahana. I thought it was notable that all of those sales were in West Maui.
• The highest priced land sale for the month of May closed for $2,700,000. That lot is .429 acres of beachfront in North Kihei.
• There were 9 bank owned sales that closed in May of this year. Last year, there were 13 bank owned sales reported on the MLS.
• There were only 4 short sales this May. That was the same number as last May. Short sales remain a relatively small percentage of the total sales. With continued appreciation, that should remain the case for the remainder of this market cycle.

New Pending Sales
The bulk of the sales reported above went under contract sometime in March or April. To give us a sense of more current market demand, the chart below shows the number of properties that went under contract in May compared to the numbers in May of 2015.

This is the second month in a row when pending home sales have gone down. I would expect that we might see a dip in actual sales volume in June. Condos saw an increase in pending sales in May. That marks the 4th straight month of increased pending sales for condos compared to 2015. That bodes well for sales over the next couple of months. Land pending sales were down slightly after a slower April. Land pendings have been more up and down this year. We are also talking about a much smaller sample of sales so we may just be seeing some month to month variability.

Thoughts on the May Numbers
I started this post with a teaser that Maui Median home prices are likely to see a healthy increase sometime in the coming months. That might sound like a contradiction to my suggestion that sales volume is going to be decreasing based on the dip in pending home sales. In fact, the decrease in sales and the increase in median prices are likely tied together.

Anecdotally, it feels like inventory has been shrinking significantly for homes. The local real estate association keeps track of this information. When I looked at their data for the last few months, inventory is down almost 9% compared to earlier this year. That said, this is actually fairly typical. It mirrors shifts in inventory that we saw last year. So what makes the current market look different?

I decided to take a deeper look at the current inventory. Currently, there are 517 homes that are active. Of the 517 homes that are active, 307 of the homes are priced $1,000,000 or higher. That is an impressive 59% of the inventory. In May, the median price for a home was $622,500. Of the 517 active homes listed, there were only 83 homes priced for at or below the median sales price of $622,500. That is just 16% of the inventory. I also looked at the pending home sales. There are currently 277 homes under contract. Of that total, 147 homes of the 277 pending homes are listed for at or below the median price of $622,500. That is 53% of the pending sales. Of the 277 pending sales, 52 of the homes were priced $1,000,000 or more. That is roughly 19% of the pending sales.

Chewing on the numbers above, it is clear that there is strong demand and shrinking inventory at or below the median of $622,500. While the pending sales will likely help keep the median prices in check next month, it is likely we will see median prices start to rise unless the inventory of homes at or below the current median increases significantly. The increase will stem from fewer lower priced sales and to a lesser extent upward price pressure from the lack of inventory. The lack of inventory will likely also keep sales volumes down.

While the home market under $700,000 appears to be continuing to be tight marketplace, that is not true of other price points and property types. The market conditions also differ in different geographic areas of the island. Overall, there is a lot of variability in this market. Contact The Maui Real Estate Team to discuss your specific real estate needs. We will give you our take on market conditions particular to your interests.

The Maui Real Estate Team’s office is based out of the North Shore community of Paia. This small town known for its bohemian feel and proximity to world class water sports has been one of the stronger real estate markets on the island over the last 10-15 years. I wanted to take a look at the Paia Real Estate market and how it is fairing to start 2016. This post looks specifically at Paia and Kuau. It does not include the Spreckelsville neighborhood. If you are interested in that area, check out our recent Spreckelsville Market update. In this post, I wanted to show the general activity in Paia during 2016 with comparisons made to sales activity in 2015. I will also drill down and look at sales activity in certain neighborhoods around Paia.

The map below shows activity in the 2016 Paia Real Estate market. The Red pins represent sales. The yellow pins represent pending sales and the green pins represent active homes. You can click on the individual pins for details on each of the properties.

I have also included a map of the 2015 Paia Real Estate Sales for some context.

While the maps give you a visual reference as to what has been happening in Paia, the numbers below may be a little easier to digest. This is a look at the sales volumes, median sales prices, average sales price, some 2015 numbers for comparison and some other notable numbers from the first five months of sales.

• There have been 15 homes reported sold for the year to date in the Paia/Kuau area with an additional 5 homes under contract. One of those pending homes could conceivably be classified as a land sale due to the condition of the home. In addition to the reported sales, I am aware of one other home that sold without Realtors in Kuau Bayview.
• By comparison, there were 9 homes that sold over the first five months of 2016. There were a total of 26 home sales throughout all of 2016. That calculates to a 66% increase in sales for the first 5 months of 2016 and 57% of the total sales for all of 2015. It looks the 2016 sales volume is well on its way to beating 2015 totals.
• The median price for the 15 2015 sales was $600,000 and the average price was $1,372,000. By comparison, the median and average sales prices for the first 5 months of 2015 was $599,000 and $684,222. The difference in average sales price speaks to a couple of big dollar sales that closed earlier this year. The negligible difference in median price does not accurately reflect changes in property value. Perhaps we can glean more when we look at some of the individual neighborhoods below.
• The highest priced sale during the start of the year was $6,000,000 for an oceanfront estate. The property located at 23 Wa’a on Tavares Bay includes a 4 bed, 4.5 bath home with 6,258 square feet of living space and a 1 bed, 1 bath 1,025 square foot cottage on a 1.28 acre lot.
• There were two condo sales at Paia’s one and only condo complex, Kuau Plaza. There were no sales at Kuau Plaza during the first five months of 2015. There was only one Kuau Plaza sale in all of 2015.
• There were no land sales in the Paia area during the first five months of the year. There is one property under contract and arguably a second when you factor in the condition of the property’s home. There were no land sales during the same period of 2015. The low volume of sales is not a reflection of demand. There just isn’t any supply. Paia is hemmed in by agricultural land and there are very few remaining vacant lots. That could change in the future with the end of the sugar plantation, but nothing is imminent at this point.

For a small community, Paia has a pretty diverse market of homes. From old Hawaii Plantation Style Homes to luxurious oceanfront estates, there is a significant range in property values. With that in mind, it is worth looking at some of the market activity of some selected neighborhoods around Paia.

Kuau Bayview
Kuau Bayview was one of the more resilient neighborhoods coming out of the downturn. While many areas of Maui were just starting to see modest appreciation, Kuau Bayview was setting new market highs. The neighborhood offers proximity to town and area beaches, a community park, good views from selected homes and consistent pride of ownership. There have been two sales publicized in the MLS this year, one sale that did not involve Realtors and two pending sales. The three sales to date have all set new record highs for the community. Two of the three sales closed in the mid $900,000s. All three homes are two story, have good ocean views and they have been remodeled and upgraded. The two homes under contract are both smaller single level floor plans. While these homes will not set any new high prices when they close, they will be among the highest ever sales price for their floor plan.

Additional activity in the neighborhood during 2016 will be predicated on new inventory coming to market. Potential sellers should realize that the run of high sales does not necessarily mean the next home to hit the market will set a new record. For a relatively small neighborhood, there is a decent range in home values. The highest priced homes tend to be located towards the top of the neighborhood where views are better and there is little to no road noise from Hana Highway. Remodels and additional square footage are also factors in pricing.

North Shore Village
North Shore Village was built in 2003. It was the last new development in Paia. The two story homes are located on small lots. The area also offers consistent pride of ownership, and it is just a few minutes walk from all of the amenities of downtown Paia. Due to the limited number of homes in this neighborhood, we don’t see a lot of turnover. In 2015, there were no sales in the neighborhood. This year there has been one sale and one additional property is pending. The home that closed was a smaller two bedroom floor plan that sold for $589,000. The pending sale is particularly noteworthy as it was listed for $780,000. That is well above previous sales in the neighborhood. The home was well maintained, but not significantly upgraded. It is rumored to be under contract for close to the asking price. That would smash the neighborhood high sale. If say it were to sell for $740,000, it would be selling for 26% above the last neighborhood sale for a home that is only 145 square feet larger.

This is another neighborhood that would require new inventory if there is going to be additional sales activity in 2016. It will be interesting to see how the next home that comes to market is priced. Will this pending sale reset prices in the neighborhood or will the market view the one high sale as a one off close?

Halelani
Halelani is a small neighborhood nestled between North Shore Village and Kuau Bayview. It is behind the Paia Community Center. Most of the homes were built in the early to mid 70s and they tend to be modest in size and construction. There have been some nice remodels in the neighborhood over the last decade. It is a desirable neighborhood due to proximity to downtown and area beaches. It also offers a lower price point under $700,000. Halelani was pretty busy in 2015 with 5 sales in the neighborhood. Those sales included the two highest neighborhood sales of all time. This year, it has been quiet with no listings and no sales reported to date. With limited Paia inventory under $700,000, well priced new inventory inventory would be well received.

Skill Village
Skill Village is a neighborhood of more modest homes built in the mid to late 80s. The neighborhood is located above the old Mill in Paia close to Paia Elementary School. It is the primary location for entry level homes in Paia, but there have also been some homes that have been significantly updated. This neighborhood has had some pretty healthy activity this year and last year. There have been five sales thus far this year, with two additional pending sale and one active listing. Last year, there were 3 sales in the first five months of 2015 and 9 total sales for the year.

There were more high priced sales in 2015 than what we have seen to date in 2016, but that is a reflection of the homes sold rather than market dynamics. There was actually one home sold in both 2015 and 2016 with little to no new improvements. On August 20, 2015, 32 Palekana sold for $530,000. Less than 7 months later, it sold again for $561,500 on March 7, 2016. That is almost 6% increase in that period of time. Other signs of appreciation in the neighborhood are apparent when you compare the low sales in 2015 with the low sales in 2016. The lowest priced sale for the year to date was $465,000. Last year, there were two homes that sold for $385,000.

I would imagine, we will continue to see steady activity in Skill Village this year if there is sufficient inventory. Paia remains an in demand community and this is one of the more accessible neighborhoods for potential buyers.

Kuau Point
The Kuau Point neighborhood is a mix of older plantation homes, newer homes and oceanfront properties. Neighborhood amenities like a high end convenience store, Mama’s Fish House, Mama’s Beach and a great launch for wind and waves sports make this little community on the ocean side of Hana Highway very desirable. There have been three home sales in the neighborhood this year, with one oceanfront lot under contract and one new oceanfront home listing. The range of sold homes provides a pretty good cross section of Kuau Point properties. At the low end, there is a small residential condo just off of Hana Highway that sold for $590,000. With only 720 square feet of living space, it came at a pretty hefty price. That said, its size is offset by its proximity to amenities. The middle sale was a former vacation rental just a stone’s throw from Mama’s Fish House. This home sold for $1,323,000. The high sale was $4,850,000 for a house and cottage on .4139 acres of oceanfront. Last year, there were 3 sales during the first five months of the year and 7 total sales throughout the year.

Paia Oceanfront
Paia Oceanfront isn’t a neighborhood. This class of property spans across a number of neighborhoods and there is some overlap with my Kuau Point discussion. That said, oceanfront is it’s own unique market segment that merits a separate discussion. It is also the only part of the Paia market where you can find an abundance of inventory. There are currently 10 active oceanfront home listings in the Paia/Kuau area. You could make a case that one of the home listings could be thought of as more of a land listing. The 1.1 acre oceanfront lot we have in Paia is one of the more stunning parcels along the coast. The older structures have less value and the heavy lifting has been done to get approvals to construct a new home. There is also one oceanfront lot on the market that is currently under contract. Thus far this year, there have been two oceanfront sales. That is ahead of the one oceanfront home sold last year.

Market dynamics for oceanfront properties in Paia are pretty interesting right now. The two homes sold and the lot under contract are an uptick in activity over last year. That said, the most recent close could put some downward pressure on list prices. Sellers have been shooting for premium prices. A number of those asking prices feel high in light of the sale of 23 Wa’a. The cost per square foot was significantly lower and the quality of construction was significantly higher than some of the other homes currently on the market. It will be interesting to see if the existing inventory is able to shrug this off as an outlier sale or if buyers successfully leverage the 23 Wa’a sale to negotiate lower prices.

Overall Paia Market Thoughts
The overall Maui Real Estate market has seen upward pressure on pricing due to a lack of new supply and strong demand fueled by compelling interest rates and high rental costs. These issues are particularly acute in the Paia area where the lack of new construction dates all the back to 2003 and market demand has increased as Paia has become seen a significant increase in demand from second home owners. Those dynamics would suggest that we may continue to see upward pricing pressure in Paia as long as the economy maintains or outperforms current level and borrowing costs do not increase too much. That being said, I would not be surprised to see the rapid rates of appreciation we have seen in some neighborhoods cool off. Price increases in Paia tend not to be linear. We get something of a stair step effect where prices shoot up and then level off for a while before they increase again. I can see that happening in a few neighborhoods. If you made it to the end of this tome, you have to be pretty interested in the Paia market. Feel free to contact us if you have questions about the market or if you need assistance with your real estate needs. We would welcome the chance to learn about your needs. You can find more details about the current Paia Real Estate Listings on MauiRealEstate.com.