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

Maui’s Most Competitive Markets

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

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

Most Competitive Property Type

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

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

Most Competitive Condo Market by Location

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

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

Most Competitive Condo Market by Price Point

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

Most Competitive Home Market by Location

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

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

Most Competitive Home Market by Price Point

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

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

A Few Other Thoughts Looking at The Numbers

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

Sugar Cove Building 6 Behind the Numbers

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

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

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

Check out the listing page for more photos and details.

Ukraine

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

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

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

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

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

— Emre Akcakmak (@akcakmak) March 8, 2022

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

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

Contact The Maui Real Estate Team

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

This week’s edition of Maui Market Musings is another grab bag of topics. I look at days on market on Maui, try to get a sense of price increases since the start of Covid and check in on sales activity at Hoku’ula, the new development in Upcountry Maui.

Properties Continue to Move Quickly

One way of gauging the strength of the Maui market is looking at days on market. The local Realtor Association publishes days on market for sold properties. I wanted to use data from recently listed properties for a more current look at market activity. Between February 9th and February 16th, 71 listings came to market. Of the 71 listings, 40 already went under contract. Of the remaining 31 listings, 7 are waiting to review offers until a later date or are in the process of reviewing offers. One bank owned listing successfully completed an auction with the buyer and the bank completing contract paper work. Two additional listings are vacation rentals with no opportunity for showings as of yet.

We are seeing things go under contract really quickly. What does this mean for buyers? Over 50% of properties are going under contract in 10 days or less. Many sellers are setting offer deadlines a week after listing to allow for strong showing demand. Multiple offers are common. Buyers who want to enter the fray need to have pre-approvals and proof of funds in hand. They also need to prepare to write very strong offers.

How Much Have Property Values Increased on Maui?

How much have prices gone up since the start of Covid? This is one of the most common questions people ask about the Maui market. This is a surprisingly difficult question to answer. The Maui market is incredibly heterogeneous. While changes in median price give some indication of changes in value, it isn’t an exact indicator. Changes in median prices aren’t just due to changes in price. Differences in the composition of the market in any one month also contribute to changes in median. For example, if you have a greater proportion of higher end homes selling in any one month, median prices will tend to go up.

With that in mind, I thought I would do my best to try to get a better sense of how much prices changed since early 2020. To do that, I went through the sales over the last month and compared them to sales during the same period of January and February 2020. I tried to find as many like for like properties to compare from each of the two time frames. Truth be told, the list of properties that fit that criteria is surprisingly small. Here are some of the properties I identified, notable differences if any, their sales prices and the percentage change.

Comparing Early 2020 and Early 2022 Home Prices

• The first example I found was actually a home that sold on January 31st of 2020 and sold again on February 9th of 2022. 24 W Makaukau Loop is located in the Waikapu Gardens subdivision of Wailuku. The seller made one notable improvement during their two years of ownership. They added a photovoltaic system with a Tesla Powerwall. It closed for $731,000 in 2020 and $990,000 in 2022. That is a 34% difference. If you add roughly $35,000 for the improvements, you are looking at a 29.4% increase in value.
• I found two very similar homes in the Pi’ilani Villages subdivision in Kihei that sold in 2020 and 2022 respectively. 38 Polale and 62 Polale are both three bedroom, two bathroom homes with 1,478 square feet of living space. Both homes have net metered photovoltaic systems. and new flooring. The home at 38 Polale has original bathrooms, while the home at 62 Polale includes nicely remodeled bathrooms. The lot at 38 Polale is 300 square feet bigger. The home at 38 Polale sold in early 2020 for $756,000. The home at 62 Polale sold in early 2022 for $1,100,000. That is a 45.5% difference in value. Regardless of the bathroom improvements, this is a big shift in values.
• While the next two homes don’t offer a true apples to apples comparison, they are still worth sharing. Both homes are in Kaimana at Kehalani. This is a subdivision with a single developer and a handful of different floor plans. The first home is a 4 bedroom, 3 bath with 2,021 square feet of living space and a Photovoltaic system. The home is located on a 4,500 square foot lot. The second home is 3 bedrooms, 2 bathrooms with 1,185 square feet of living space. It is also situated on 4,500 square foot lot. The 4 bedroom home sold in early 2020 for $725,000. The second sold for $815,000. That is a 12% higher sales price for a home that is 41% smaller.

Comparing Early 2020 and Early 2022 Condo Prices

• The first two condos I wanted to compare are located in the same floor of the same building at Aina Nalu in Lahaina. They are both 2 bedroom, 2 bath unit with 832 square feet of living space. Unit C 203 sold in early 2020 for $599,000. The seller did add some new flooring and there was some sort of bamboo ceiling covering added in parts of the condo. Unit C 209 was almost identical minus the improvements. It sold in early 2022 for $766,000. That is a 27.8% price increase. It is worth noting that Aina Nalu was one of a small handful of condos that actually saw prices go down in mid 2020. During that time, second floor two bedrooms went as low as $500,000. The level of appreciation is that much higher if you factor in that price adjustment.
• Kai Malu is an upscale non-vacation rental condo in Wailea. There is variability in value within the complex based on location and view. I found two condos with the same 3 bedroom, 2.5 bathroom floor plan in different parts of the development. Both are considered to be good locations. They both overlook the golf course with the ocean in the distance. Unit 5A sold in late January 2020 for $1,700,000. Unit 55B is a little more upgraded unit with some more recent renovations. It sold for $2,200,000 in early February. That is a 29.4% increase in sales price.
• Kihei Villages is an entry level condo complex that prohibits short terms rentals. I found two pretty similar ground floor units for comparison. Both have two bedrooms, one and a half baths and 750 square feet of living space and an enclosed yard area. Unit 10-103 had some improvements in the kitchen, but bathrooms appeared to be original. It sold in February of 2020 for $365,000. Unit 34-103 was well maintained with a nice yard, but no upgrades to the kitchens or bathrooms. It sold for $535,000 in February of 2022. That is a 46.5% difference in value.
• I compared two one bedroom, one bath listings in building 2 at Maui Vista. This is a vacation rental friendly condo in Kihei. Both units appeared to be in original condition. Unit 2203 sold for $420,000 in February of 2020. Unit 2308 sold for $572,000 in January. That is a difference of 36.19%.

While this is a relatively small sample size, it does provide both homes and condos over a pretty broad area of the island. Overall, here are my takeaways from this number crunching exercise. You are looking a bare minimum of 27% appreciation over the last two years with some properties seeing more significant increases. There is some variability in appreciation around the island. While all these prices are moving in the same direction at this point,some are taking a little longer to get there.

The significant price increases appear to be continuing. Anecdotally, bidding wars feel that much more competitive of late. In turn, it feels as if values skipped up on some of the properties going under contract over the last few weeks. It will be interesting to see if the sales numbers corroborate this in the months ahead.

Hoku’ula Lottery Update

Last week I posted about the lottery for first phase of the market priced listings at Hoku’ula. This development in Hali’imaile is one of the largest developments ever in Upcountry Maui. It will include 196 total homes with 98 work force housing homes and 98 market rate housing homes. The work force housing units are fully reserved. The developer held a lottery for the first phase of the market rate housing at the end of last week. Per the developer’s representatives, 15 homes went under contract as a result of the lottery. That is half of the 30 homes in the first phase. Registrations for the first phase may still be submitted. Contact The Maui Real Estate Team for buyer representation if you are interested in the development.

Final Thoughts

Well, so far so good on making this a regular feature of our blog. We are hoping that this is valuable tool for buyers and sellers trying to get a better sense of the market. Feel free to reach out if there are any specific things you might want us to discuss in future volumes of the musings. Contact The Maui Real Estate Team if you need assistance buying and selling property.

Welcome to Maui Market Musings! This is a new feature that I hope to post weekly or at least every other week. This is going to be something of a grab bag post where I hit on a variety of topics relevant to the Maui Real Estate market and beyond.

January Statistics

The first month of the year is done and dusted and that means the Realtor Association of Maui January stats are out. Here are some numbers worth highlighting.

• Pending Home and Condo sales decreased in January compared to January of 2021 by 21.3 and 31.3% respectively.
• The decrease in activity is due largely to decreased supplies. The volume of homes and condos for sale are down 34.6% and 75.8%. As it stands, there is about 1.8 months of home inventory and .8 months of condo inventory on the market. Six months supply is typical of a balanced market.
• The limited supply is translating into upward price pressure. The median home price increased 18.1% compared to last January and the median condo price rose 26.3%. Those numbers aren’t an exact reflection of changes in property values compared to last January as the composition and price point of properties sold is going to have an impact. That said, it is safe to say that prices are up substantially.
• Limited supply is meaning that properties are selling faster. Days on market for homes decreased 26.8% compared to last January. Days on market for condos decreased 39.9%.
• Current market conditions also mean that properties are selling for a higher percentage of list price. On average homes are selling for 100% of list price and condos are selling for 100.1% of list price.

What Does This Mean for Buyers and Sellers?

How are these numbers translating to what we are seeing first hand in the market? We listed a nice home in Haiku last week. Within that first week, we showed the property just over 20 times, received 12 offers and went under contract for well over asking price.

Buyers should expect that properties priced close to market will attract multiple offers. The buyers winning these bidding wars are being aggressive in some cases going well over asking price and waiving some if not all contingencies. Sellers who price close to market can expect a lot of showing activity with their home.

The pricing close to market component is important. While some buyers are really reaching, some sellers may be overshooting the market. We are seeing this in particular with some higher priced parts of the market. Last year, twelve homes sold in the Lanikeha subdivision. The average sales price for the twelve homes was $2,942,347 and the median price was $2,879,500. As of right now, there are seven active listings, no pending sales and no sales. The average price of the $5,439,714 and a median price of $5,200,000. Only one of the seven listings is priced below last year’s high sale for the neighborhood. While the year is young, this is one area where homes are currently sitting.

Maui Following National Trends

The inventory crunch, short days on market and rising prices are not unique to Maui. This is a national trend. Mike Simonsen of Altos Research tracks this on a weekly basis and he reported new national lows for inventory last week.

We hit a new record low in available inventory. Under 250k single family homes active. Another 70k listed this week.

Also new: supply chains are notably decreasing inventory. As completion gets delayed until 2023, we remove them from this active count.

4/7 pic.twitter.com/tgGDpf6KSL

— Mike Simonsen 🐉 (@mikesimonsen) February 14, 2022

It’s worth reading through Mike’s whole thread. He also touches on Interest rates. Speaking of rates…

Rising Interest Rates

Mike’s thread mentions the impact of rates on the market. On a national level, the market appears to be relatively unfazed by the raise in rates. It hasn’t been insubstantial. Talking to one Maui lender today, she indicated rates are up .5 to .6 percent over the lat 45 days and .35% in just the last 15 days. With rates predicted to rise further, it will be interesting to watch the market overall and the lower price points in particular. Maui residents are already struggling with affordability.

The Vacation Rental Condo Market

One of the stronger areas of the Maui market is vacation rental condos. Low inventory and strong demand is pushing prices up. Last week, I came upon an an analysis that claimed Maui is the best market for vacation rental investments in 2022. I have to say, I question that analysis. There is no doubt Maui is a desirable place to own a vacation rental condo, but that isn’t based on rental returns. It seems if anything that the vacation rental market is doing well in spite of rental returns. While rental rates are going up, they aren’t quite keeping up with appreciation. Buyers looking at proformas for vacation rental condos are finding mostly 2-3% CAP rates. It seems like more buyers are looking at their condos as use assets where income helps to defer a portion of the costs.

Last Day for Hoku’ula Lottery Registration

Tomorrow is the last day to register for the Hoku’ula market rate housing lottery . This Upcountry subdivision will bring a significant amount of new inventory to market over the next year. There are already 98 workforce housing homes under contract with 98 market units coming. The price point for the homes available range from $1,285,000 to $1,650,000. The neighborhood offers good views, new construction, and about as convenient an Upcountry location as you could find.

Contact The Maui Real Estate Team

We hope this first edition of the Maui Market Musings offer some insight into current conditions. Contact The Maui Real Estate Team if there are any subjects you want us to touch on or if you need assistance. We look forward to being of service.

If there is any one community within Maui that epitomizes the Covid era real estate boom, it is Kapalua. This resort community on Maui’s Northwest coastline was always an appealing locale for a segment of Maui’s luxury property buyers. That said, inventory tended to be higher and days on market tended to be longer than other resort areas like Wailea and to a lesser extent Ka’anapali. With that context, the recent surge in activity in Kapalua is that much more astounding. In this post, we take a look at some of the numbers from the last 18 plus months of sales. We also give a few thoughts towards the end of the post on the market outlook for 2022.

Kapalua Homes

Kapalua was one of the first luxury home markets on the island to show signs of life in the second half of 2020. The strong performance continued into 2021. The numbers below represent highlights from the 2021 market activity.

Kapalua 2021 Home Sale Notable Numbers

• Maui Realtors reported 29 homes sold within the Kapalua Resort during 2021. That is a 70% increase over 2020.
• The 29 sales is the highest ever number for a single year in Kapalua. It is worth noting that 2020 was the second strongest year ever for home sales in Kapalua.
• The median price of homes sold during 2021 is $4,135,000. The average price is $4,972,327.
• The highest priced transaction closed for $15,000,000. That was for 9 Kapalua Place. This beachfront home includes over 7,000 square feet of living space on a .7 acre parcel of land.
• That was one of three closes over $10,000,000. The other two sales included another beachfront home in the Kapalua Place subdivision and a home in Kapalua Plantation Estates.
• Pineapple Hill was the busiest subdivision for transactions with 15 closes. Plantation Estates saw the next most activity with 6 sales. They were followed by Honolua Ridge with 4 sales, the aforementioned Kapalua Place’s 2 closes and a single home sale in Mahana Estates.

Behind the Numbers

As mentioned above, Kapalua’s market surge started in the second half of 2020. Specifically, it was the last quarter of 2020 when transaction volume picked up. Nine of seventeen sales for the year closed in November and December. The upturn in market activity happened earlier than the Wailea Market, a larger resort community with typically much higher sales volumes. What was it that drove earlier buyer interest in Kapalua? Well it wasn’t any new resort amenities. The biggest driver was the proximity to one of the island’s better private schools.

Early in the pandemic, Kapalua became a Zoom town. A large number of Silicon Valley employees moved to Maui to work remotely. Initially, they came as renters. Those with families had their kids learning remotely for the last couple of months of the 19/20 school year. At the start of the 2020/21 school year, the enrollment of Maui Prep ballooned by 100 students. All of the new students came from Silicon Valley families. The school, located minutes from Kapalua, offered a draw to remote workers that a place like Wailea did not. Many of the families that started as renters began to purchase property in the fall of 2020 and that momentum continued into 2021.

It’s worth looking at the 2021 sales more closely as market conditions were not uniform throughout the year. Twenty of the twenty-nine sales in Kapalua occurred in the first six months of the year. During the first part of the year, there was still a decent supply of homes for sale. The decreased sales volume during the second half of the year can be attributed to a combination of reduced inventory, seasonality and perhaps slightly lesser demand. Though, I would put inventory at the top of that list by a good margin. Scarcity remains a driving factor going into 2022. I will comment more on that in the market outlook below.

Kapalua Condos

The Kapalua Resort set a new record for condo sales in 2022. The dynamics driving the market were a little different than the home market. It was less of a case of remote workers and more a case of the Covid second home boom. The numbers below show some of the 2021 market activity followed by a few more thoughts on what drove the numbers.

Kapalua 2021 Condo Market Numbers

• Maui Realtors reported 145 sales in the Kapalua Resort during 2021. That is a 363% increase in activity over 2020.
• For additional context, the next closest year for condo sales in Kapalua is 2004. There were 87 closed transactions that year.
• The median price of the condos sold in 2021 is $1,220,000. The average price is $2,060,805.
• The highest priced transaction closed for $13,295,000. That type of cash buys you a 4,050 square foot, four bedroom, four and a half bathroom unit at the Montage Residences Kapalua Bay with stunning views. This is the highest ever sales price for a condo in Kapalua.
• The lowest priced condo sold in 2021 closed for $600,000. That sale was a 1 bedroom, 1.5 bath unit at Kapalua Golf Villas.
• Golf Villas experienced the most sales activity in the resort with 44 closes in 2021. Kapalua Bay Villas came next with 30 closed transactions followed by Kapalua Ridge with 28 closed sales and Montage with 27. On the quieter end of the spectrum, 6 sales closed in Coconut Grove, 5 closed in the Ironwoods and 5 closed at the Ritz Carlton Residences.
• 2021 was the busiest year for transaction volume on MLS records for the Ridge, Bay Villas, Golf Villas and Montage. It was the busiest year since 2003 at Coconut Grove and the busiest since 2004 at the Ironwoods.

Digging into the Condo Numbers

The Kapalua Condo market didn’t fully kick into gear until early 2021. Market activity more closely resembled the activity in other condo markets around the island. A modest uptick in activity in late 2020 followed by frenzied activity after the new year. While activity slowed a little in the second half of the year, sales volumes for Kapalua condos did not dip to the same extent as the home market. Forty-six percent of all condo sales occurred in the second half of 2021 compared to only 31% of home sales. While supply shrank as the year went on, there was still enough supply available to meet the considerable demand.

Kapalua Land

I usually don’t spend too much time discussing land sales when I provide these community level market updates. That said, the 2021 Kapalua land market can’t be ignored. The increase in transaction volume compared to 2020 was bigger than any other segment of the Kapalua market.

Notable Land Sale Numbers

• There were 60 lots sold in Kapalua during 2021. That calculates to a 750% increase in transaction volume compared to 2020!
• The 60 sales is almost 1/4 of the 247 all time sales in Kapalua reported on the MLS.
• Mahana Estates led the way with 42 closed transactions. These were new developer sales.
• Honolua Ridge saw the second most sales activity with 11 sales. Realtors reported 5 sales in Plantation Estates and 2 sales in Pineapple Hill Estates.
• The median price of lots sold is $995,000. The average price is $1,156,000.
• The highest priced sale closed for $2,600,000. The 2.7 acre lot in Plantation Estates offers beautiful views towards Honolua Bay.
• The lowest priced lot closed for $700,000 in Mahana Estates.

Looking Behind the Land Numbers

This was the year of the great Mahana Estates land rush. At the start of the pandemic, I don’t think anyone would have predicted this development would sell out by the end of 2021. Market response for was tepid the first few years the development was on the market. One lot sold in 2019 and two in 2020. There were a couple of different days in February where 3 lots closed in a day. It will be interesting to watch this development evolve and build out. There were a fair share of bulk purchases among this year’s Mahana Estates Sales. Were those land speculators, spec builders or long term holds?

The 18 non-Mahana Ridge sales are nothing to sneeze at. Those 18 sales alone are more than any one year since 2005. The lack of inventory in the home market during parts of 2021 definitely pushed some buyers to build.

2022 Market Outlook

Inventory, or lack thereof, appears to be the biggest market driver to start 2022. At the time of this post, there are only 6 active Kapalua Homes for Sale. Three additional homes are under contract. As of right now, there are only 12 active Kapalua Condo listings. It is worth noting that only 2 of the active condo listings are priced for less than $2,000,000. An additional 12 condos are currently under contract. Land is even more scarce. There is only one lot for sale in Kapalua. An additional 9 lots are under contract.

It’s safe to say that 2022 shouldn’t threaten the record sales volumes of 2021. The question is whether we will see any inventory relief during the year. Will some of the people remote working list their homes if they go back to the mainland? Will the high prices entice any sellers to come to market?

What about demand? As of right now, demand appears to be pretty strong for the limited inventory available. That is putting upward pressure on pricing. Looking forward, are there any other threats to demand looming on the horizon? There is a lot of discussion about rising interest rates and their impact on the national real estate market. There are arguments on both sides, but a lot of economists seem to be downplaying the potential impact on buyer demand due to the acute supply issues. That said, you would think the impact might be even less in Kapalua where 62% of last year’s sales were cash.

I would argue that state of the overall economy and the trajectory of the stock market are likely to have a bigger impact. Over the years, we’ve noted something of a correlation between sales volume in the resort communities and the stock market. Good years for the Dow means more financial power for discretionary purchases like second homes.

The last question is whether we might see any buyer resistance on pricing. In particular, I wonder about the impact in the vacation rental condo market. Maui has always been a place where more people bought for love than rental returns. That said, the recent price increases resulted in even smaller cap rates. Will the combination of limited returns on higher purchase prices shrink the buyer pool at all? Thus far, that doesn’t seem to be the case.

Contact The Maui Real Estate Team

Contact The Maui Real Estate team if you are considering buying or selling property in Kapalua. We would welcome the chance to discuss market conditions specific to your interests.

Our local MLS groups the adjoining communities of Wailea and Makena together. While the two areas border each other and both offer high end properties, there are enough differences that they are somewhat distinct markets. While Wailea may be a more recognized name nationally and internationally, Makena tends to see the highest home values on the island. The recent addition of Discovery Land Company’s Makena Golf and Beach Club further cemented this beautiful stretch of coastline as Maui’s most exclusive community. Last week, we posted about the year to date market conditions in Wailea. This post looks at the busy year to date of real estate activity in Makena.

Notable Numbers from This Year’s Makena Home Sales

• Maui Realtors reported 10 home sales in Makena for the year to date as of October 9th.
• This is quite a contrast from the complete lack of sales activity during the same period of 2020.
• It is worth noting that this is the busiest January – October period for Makena Home Sales of any year on MLS records.
• The median price of the ten homes sold is $10,000,000. The average price is $14,151,650.
• A home in the Keauhou subdivision set the high water mark for sales with a $25,000,000 price tag. The newly constructed 6,561 square foot home sits on 2.496 acres of land across the street from the ocean.
• This was one of two reported sales to eclipse the $20,000,000 mark in Makena this year.
• It is worth noting that the coconut wireless is reporting a third unreported sale that came in around $70,000,000. If rumors are correct, the buyer is a rather prominent tech executive.
• A home that sold across the street from Big Beach was the least expensive sale in Makena this year. The 4,080 square foot home on .71 acres closed for $6,337,500.
• Five of eleven home sales in Makena this year are beachfront properties.
• According to MLS records, the Realtors involved reported all sales as cash purchases. It is worth noting that some of these “cash” sales may involve financing in the background with no financing contingencies in the contract.

Thoughts on recent Makena Home Sales and the Makena Home Market Outlook

Like many higher priced home markets around the country, the Makena area experienced robust activity during Covid-19. It just took a little longer for the ball to get rolling. After just one sale in all of 2020, the market really took off after the first of the year. Not only are the 10 sales stronger than any other 9 plus month period, this year’s activity to date is stronger than any full calendar year for Makena on MLS records.

Looking ahead to the rest of the year, inventory figures to be a factor for the Makena home market. At this point in time, there are just two active listings with one home under contract. Barring an influx of new inventory or off market sales, 2021 won’t have too much of an opportunity to pad its record. Assuming there is no drastic change in the overall economic picture, this should be something of a seller’s market as we enter the new year.

Notable Numbers from This Year’s Makena Condo Sales

• Maui Realtors reported 15 condo sales in Makena as of October 9th. That calculates to a 50% increase in activity over the 10 sales that closed during the same period of 2020.
• The median price of the fifteen condo sales is $3,050,000. The average price is $3,973,000. This is actually down from last year’s median and average sales price of $5,069,500 and $4,734,275 respectively.
• Makena Surf was the busiest development for sales activity with eight closes. Na Hale O Makena came next with 5 closed transactions. There were 2 closes at the Kula Villas at Makena Golf and Beach Resort.
• The highest priced transaction closed for $12,500,000. That was for one of the units at the Kula Villas. It is four bedroom, four and a half bathroom condo with 3,625 square feet of living space.
• The lowest priced sale closed for $1,500,000. The 3 bedroom, 2.5 bath unit at Na Hale O Makena has a garden view.
• Nine of fifteen Makena condo sales this year were were cash transactions.

Thoughts on the Makena Condo Market

While the fifteen condo sales in Makena may not seem like a lot, the year to date sales are stronger than any similar time period on MLS records. There is a slight asterisk to those numbers in that for much of the MLS history, there was only one or two condo developments in the area. The addition of the Kula Villas means more potential inventory to sell. Nonetheless, this is still a pretty strong year for buyer activity.

Looking forward to the rest of the year, the Makena market isn’t exactly teeming with inventory with four active listings and no pending sales. This will be the biggest constraint on new sales activity for the rest of the year. The Makena Golf and Beach Resort does tend to have a fair number of properties that never make it on to the MLS. We could see a few sales pop out of that development before the end of the year.

Contact The Maui Real Estate Team

Please contact the Maui Real Estate Team if you are thinking of buying or selling property in Makena. Buyers can search the current inventory of Makena Homes for Sale and Makena Condos for Sale on MauiRealEstate.com. Buyers let us know if there is a specific area of Makena that might be of interest. With the limited inventory available, we would be happy to keep our ears open for unlisted properties. For sellers, limited supply and strong demand make the present a great time to be on the market. Feel free to reach out to us for a free consultation and price opinion on your property.

Today’s blog looks towards leeward Haleakala and the beautiful beaches, stunning views, and high end amenities of the Wailea Resort. We wanted to take a look at how the Wailea market fared through the year to date. This post includes information on Wailea Home and Condo sales as of September 22, 2021. It is also worth noting that this looks exclusively at properties in the Wailea Resort itself. Our MLS groups Wailea and Makena together. I plan on doing a separate post on the Makena market some time next week.

Notable Number’s From This Year’s Wailea Home Sales

• As of September 22nd, Maui Realtors reported 41 home sales. That is a 227% increase in activity compared to the 18 that closed during the same period last year.
• The median price of the homes sold is $3,000,000. The average price is $3,691,505. That is an increase of 44% and 55% over last year’s median and average prices respectively.
• It is worth noting that the change in median and average sales price is not an accurate reflection of the year to year change in values. More sales at the highest reaches of the market helped to boost both of those numbers.
• The highest priced sale of the year to date in Wailea closed for $10,900,000. This Wailea Highlands property included a 6,042 square foot home on almost an acre of land.
• The Wailea Highlands close was one of two sales to close for more than $10,000,000 and one of six home sales to close for more than $5,000,000 in Wailea. There were no sales over $5,000,000 during the same period of 2020.
• The lowest priced sale closed for $1,350,000. This Wailea Pualani home offered 1,991 square feet of living space.
• Competition for homes increased significantly. Of the 41 sales, 11 sold for over asking price and 5 sold for full price. By comparison, none of the sales over the same period of 2020 sold for above asking price.
• More competition occurred at the lower price points of the Wailea home market. Eleven out of nineteen sales under $3,000,000 closed for asking price or above.
• Almost 66% percent of the transactions were reported to be cash sales. Cash seemed to be preferred in the more competitive $3,000,000 and under range and with higher priced transactions. A greater number of buyers chose to use conventional financing for the $3,000,000 to $5,000,000 price range.
• Wailea Pualani and Wailea Kai saw the most activity of all of the neighborhoods in Wailea. There were 8 closes in each subdivision.

Thoughts on Recent Activity and the Outlook for the Wailea Home Market

Needless to say, the numbers above point to a robust eight plus months of home sales in Wailea. While many second home markets took off in the spring and summer of 2020, Maui’s market remained relatively quiet due to quarantine requirements. We started to see an uptick in buyer activity after the governor lifted quarantine restrictions in October. Buyer activity started to increase during those last few months of 2020. It hit a whole other level in 2021. I checked the MLS data going back to 2003. Only January-September of 2005 came within 10% of this year’s total.

While this spring marked the peak of the frenzy, buyer demand remains strong. Inventory, on the other hand, is particularly limited. There are only eight active home listings for sale within the Wailea Resort. An additional seven homes are under contract. Barring any significant changes in the global economic picture or an unexpected influx of new listings, Wailea should remain a seller’s market through the rest of the year with sales volumes slowing due to the lack of inventory.

Notable Numbers From the 2021 Wailea Condo Market

• Maui Realtors reported 232 condos sold in Wailea between January 1, 2021 and September 22nd. That is a 362.5% increase over the 64 sold during the same period of 2020.
• The median price of the 232 condos sold is $1,398,000. The average price is $1,910,153. That is 15.3% and 12.2% higher than last year’s median and average respectively.
• The highest priced condo sale for the year to date closed for $14,000,000. This Wailea Beach Villas condo features 3 bedrooms, 3.5 bathrooms, almost 3,000 square feet of living space and a direct beachfront location.
• The lowest priced Wailea condo sale for the year to date closed for $647,000. This is a studio unit at Wailea Ekahi.
• I did a double take when looking at the data for the lowest priced condo sales in Wailea. I saw two closes at Wailea Point for $375,000 and $425,000 respectively. That is a shockingly low price for one of the more premium developments in Wailea. Closer examination revealed that the two seemingly low priced condo sales were for boat garages in the development.
• According to MLS statistics, Makali’i was the busiest condo for sales thus far this year. It is worth noting that the majority of the 47 closes were new developer sales. These new developer sales were based on pre-construction contracts penned two to three years ago.
• While closes at Makali’i juiced this year’s total sales volume based on older contracts, it is worth noting that quite a few properties went under contract in 2021 that won’t close until at least 2023. La’i Loa at Wailea Hills is the newest condo development in Wailea. Sales began in the spring of 2020. A roll out right at the start of Covid-19 blunted momentum. That said, it picked up steam in the fall of 2020. Strong demand in the first few months of 2021 resulted in the reservation of all 75 units by this spring.
• Maui Realtors reported the most resales at Wailea Ekahi and Grand Champions. Both developments stand at 25 sales for the year to date.
• Of the 232 sales, MLS records show 129 were cash transactions. That is 55.6% of the total sales. That is up from 47.9% over the same period last year.
• Competition also increased significantly in the Wailea condo market. Of all of the closed transactions, 35 closed for over asking price. Over the same period of 2020, not a single transaction closed for over asking price.

Thoughts on and Outlook for the Wailea Condo Market

Like the Wailea home market, the Wailea condo market experienced strong activity through the first nine months of the year. Also like the home market, the trajectory of the market showed a similar pattern over the last 18 months. It was a slower spring and summer of 2020 as the island felt the impacts of Covid-19 and a lack of visitors. A gradual ramping up of activity followed when tourism reopened in October. The start of the new year brought a whole other level of interest in Wailea Condos. We entered the year with a fairly balanced market between supply and demand. That shifted as buyers ravenously chewed through the market inventory. As with the home market, we are seeing all time high levels of sales activity for the year to date.

With high levels of demand and a shrinking supply, we also experienced a lot of upward price pressure in the market. With variability in value between units, it is hard to quantify the exact levels of appreciation. If I were to guess, I would saw 10% or greater appreciation is quite likely with variability between some of the different developments.

As for the outlook for the rest of the year, it really comes down to inventory. Plain and simple, the active condo inventory is shockingly low. At the date of this post, there are 6 active condo listings in all of the Wailea resort. There are active listings at only four of the seventeen condo developments within Wailea. Needless to say, this will constrain sales volume unless we see a considerable uptick in active inventory. It will also lead to some upward pricing pressure.

Contact The Maui Real Estate Team

Contact The Maui Real Estate Team if you are interested in buying property in Wailea. We would be happy to keep our eyes and ears open for new inventory or unlisted properties. You can also keep tabs on the current inventory of active Wailea Condo listings and Wailea Homes for Sale on MauiRealEstate.com. I don’t think you could find a much better time to go to market if you are a Wailea property owner thinking about selling. Send us a message or give us a call to arrange a free consultation and an estimate of the current market value of your condo.