The Island of Maui is loved by both residents and the many visitors who arrive to vacation on its shores annually. Its desirability and limited supply of homes typically result in a strong market. That said, these are not typical times. It’s been a tumultuous 12 months on Maui. The August 2023 fires left the island reeling. The loss of life, homes, and businesses was tragic. As we approach the one-year anniversary of the fires, cleanup efforts continue, and the first residential rebuilding efforts are underway.
The Maui real estate market continues to feel direct and indirect impacts from the fires. Those impacts are a significant factor in our local market, but they aren’t the only thing influencing island real estate. We look at all of those factors and how they impact current market conditions.
Now, if you’re considering buying or selling property here, you might be wondering what the current market conditions mean for you. In this blog, we’ll give you the inside scoop and help you make an informed decision.
Key Takeaways:
- Signs of a Shift?: The Maui single-family home market showed resilience through the first quarter, with prices appreciating and volume up compared to last year. The condo market showed similar resilience despite considerable headwinds. The second quarter brought a pronounced shift to the condo market and more subdued changes in the home market.
- More Listings: Active listings for single-family homes and condos increased by 33% and 249%, respectively, compared to a year ago.
- Influencing Factors: The fires of 2023 aren’t the only thing impacting our market. The home market is influenced by issues of affordability and constrained inventory. The condo market is feeling the effects of proposed regulations on short-term rentals and higher insurance costs.
- Regional Variability and Other Market Differences: There are subtle differences in market conditions around the island, with more pronounced market differences by price point. The biggest differences are between the home and condo market.
- Luxury: The luxury market is quieter than the boom times of 2021, but it is still seeing activity well above pre-pandemic levels.
Current State of the Maui Real Estate Market
The Maui Real Estate Market showed resilience in the first quarter of the year. Prices and volume increased over the same period of 2023 for both homes and condos. We started to see some signs of a shift in the second quarter.
The shifts are less pronounced in the single-family home market, but more definitive in the condo market. The changes in the single-family market follow national trends where higher rates and affordability challenges constrained the resale market.
| Q1 2024 | Q2 2024 | Q1 2023 | Q2 2023 | Q1 2019 | Q2 2019 | |
| Homes | 184 | 197 | 171 | 193 | 226 | 376 |
| Condos | 252 | 244 | 243 | 283 | 404 | 405 |
The condo market’s more abrupt changes are due to more local factors.
Recent trends and statistics
Median home and condo prices for the first half of 2024 continued to rise above the numbers seen in the first half of 2023.
| First Half 2024 | First Half 2023 | First Half 2019 | |
| Homes | $1,341,000 | $1,183,500 | $750,000 |
| Condos | $899,500 | $840,000 | $520,000 |
Focusing exclusively on median prices doesn’t tell the whole story about the Maui real estate market. I’m not a big fan of reading too much into Maui median prices in general, but that is the subject for another blog post.
The recent shifts in inventory and decreases in pending sales point to changes in the Maui real estate market.
Condo inventory rose for eleven months straight. As mentioned previously, the July 30, 2024 inventory increased 249% over July 30, 2023. We went from well below Pre-Covid inventory levels to the highest condo inventory since 2017. The increased inventory stems from both more sellers coming to market, and a big slowdown in buyer activity.
The shifts in home inventory aren’t as drastic but they are notable. Home inventory is up 30% over the last year, with the bulk of that increase coming since the end of April. Unlike the condo market, current inventory levels are still well below pre-COVID levels.
Starting in April, new pending condo sales experienced a sharp downturn compared to 2023. The last three months were the slowest since last September. The only other months that saw less activity in the last five years were April and May 2020. September 2023’s lower market activity came in the immediate aftermath of the Lahaina fire. Of course, April and May 2020 were the first two months of the pandemic when the island was under stay at home orders.
| Q1 2024 | Q2 2024 | Q1 2023 | Q2 2023 | Q1 2019 | Q2 2019 | |
| Homes | 192 | 187 | 180 | 209 | 294 | 299 |
| Condos | 256 | 159 | 262 | 258 | 429 | 389 |
New Pending home sales decreased by a good margin in May and June compared to 2023. While new pending sales were higher in July 2024 than in July 2023, this July was still pretty quiet. It is also worth noting that I am only able to track the number of pending sales that actually closed in 2023. A large number of pending home sales from July 2023 canceled in the immediate aftermath of the Lahaina fire.
Factors Affecting Maui’s Real Estate Market
While the August fires have both direct and indirect impacts on the Maui Real Estate market, it is far from the only factor influencing 2024 home and condo sales.
Housing Supply
Going into 2023, Maui’s housing supply did not meet the needs of the local population. The Lahaina fire, which destroyed over 2,000 residences on the island, only worsened the situation. The residents displaced by the fire made an already tight long-term rental market that much tighter. Additionally, the fire created a new pool of buyers as displaced residents with insurance money entered the market. Competition for homes around and below the median home price ramped up during the last quarter of 2023 through the first quarter of 2024.
Impact of Potential Short-Term Rental Regulations
With housing in short supply, the state and county governments began to look for places to house Lahaina Residents. Both entities quickly began to eye the large number of vacation rental condos on the island as a potential solution to supply issues. Initially, the Governor of Hawaii discussed a two-year short-term rental moratorium in West Maui unless a sufficient number of long-term rentals became available.
The governor backed off that proposal after enough home and condo owners offered long-term rentals to FEMA. That said, the state legislature passed a bill giving the county governments in Hawaii the right to make zoning modifications to restrict short-term rentals. Before the governor even had a chance to sign the legislation, the Mayor of Maui proposed legislation that restricts short-term rentals at over 7,200 condos in the county of Maui. The condos targeted were on the Minatoya list, a group of apartment-zoned condos currently allowed to offer vacation rentals.
The proposed legislation has yet to be approved. If it is approved, it will likely face legal challenges. That said, it has already had a profound impact on the market. Many condos in developments on the Minatoya List came to market immediately after the mayor’s announcement. Most buyers interested in short-term rentals hit the pause button on their condo search as they waited for clarity on the outcome of the pending legislation. With fewer buyers, some motivated sellers slashed asking prices well below recent sales.
The county council will take up the proposed legislation sometime later this summer or fall. If it is resolved this year, I would be surprised.
Fewer Visitors
Vacation home and condo buyers have always been a big part of the Maui Real Estate market. The number of visitors visiting the island impacts the pool of potential buyers. Visitor numbers for the year are running 20% or more below 2023. Buyers looking at condo properties as an investment or at least a significant means of defraying their ownership costs also view this year’s lower rental returns as a detriment.
Other Condo Market Headwinds
Insurance is rapidly becoming a four-letter word in real estate. The cost of homeowner’s insurance in general and condo insurance in particular is rising nationwide. Condo associations are seeing the cost of insuring their buildings rise drastically. Almost all buildings on the island had to increase maintenance fees to account for rising insurance premiums. Some condo developments have had to cobble together numerous policies to ensure complete coverage.
In circumstances where condo associations need to switch from one provider to many, this can increase annual premiums by 500% or more. Condos with the steepest rate increases must charge assessments to pay their yearly bill.
Larger-scale infrastructure projects led to assessments at some prominent Maui condos, including Kamaole Sands, Hale Kamaole, Mahana, Papakea, and Montage Kapalua Bay. Assessments increased inventory at a number of these developments. If a seller isn’t willing to cover the cost of the assessment, it also curbs demand.
Affordability and Other Market Challenges
Both the home and condo markets also feel the effects of affordability challenges. The Maui Real Estate market saw significant appreciation over the last decade. Combine that with interest rates that hovered around 7% for much of the year, and you end up with a smaller pool of buyers able to afford the current market. A small percentage of local residents can afford the median home price, and the pool of second-home owners who can afford these prices is also lower.
Maui Real Estate Market by Region
For a small island, Maui’s communities and regions have distinct personalities. The character of the towns is influenced by the island’s unique microclimates, geography, and historical and cultural backgrounds. While the Maui Real Estate Market tends to move as a whole, we see some variability in the market by community and region.
Communities with the Strongest Markets in 2024
The number of homes that went under contract in Makawao in Maui’s Upcountry in 2024 is up almost 42% compared to the same period last year. The number of homes that went under contract in Napili, Kahana and Honokowai is up almost 44% compared to the same period of 2023. The increased activity in Napili and Kahana is likely due to the Lahaina fires. This area appeals to displaced Lahaina residents who want to stay in West Maui.
The Central Maui Communities of Kahului and Wailuku are two markets that have seen strong price appreciation this year. There are a few reasons. Supply remains constrained in the area this year. From a demand standpoint, it is appealing to displaced Lahaina residents due to its proximity to West Maui. With buyers stretching to pull together necessary funds for a downpayment, few have the additional means to take on fixer uppers and remodels. That makes buying a home with new or at least newer construction in Kehalani and Maui Lani more appealing.
Communities with a Quieter Market in 2024
The West Maui resorts of Kapalua and Ka’anapali are both having a quieter year for home sales. I can’t say definitively what is driving the change, but both communities are seeing fewer visitors in the aftermath of the Lahaina Fires.
Kihei’s home and condo market both are seeing slower buyer activity this year. The slower condo activity can be attributed in part due to the pending legislation with Minatoya condos. A significant portion of the current vacation rental condos in Kihei would be impacted by the legislation. That is keeping buyers on the sidelines.
Paia is another community where the market is quiet. Much of that stems from limited inventory, particularly at the lower price points in the market.
Maui Real Estate Market by Price Point
While there are modest differences in market activity by community, differences in the Maui Real Estate market by price point are more pronounced. The price ranges between $800,000 and $1,350,000 are the most competitive in the market. Well-priced homes in this range tend to sell quickly. Inventory is tight and the pool of buyers is larger.
The bulk of the homes priced $800,000 or under tend to have significant deferred maintenance or other liabilities. There aren’t as many fix and flip buyers in the current market, and owner occupants don’t have the reserves or appetite for bigger projects. This means homes in this range tend to sit longer than their more expensive counter parts. As you get to the higher price points above the island median, market conditions will vary. In general, inventory increases and the pool of buyers can decrease. That said, quality properties can still sell quickly if priced well.
Luxury Real Estate Market on Maui
COVID-19 created a fundamental shift in the Luxury Real Estate Market on Maui. There have been a lot more luxury homes sales annually since the start of the pandemic, and the number of luxury homes selling outside the traditional resort areas increased.
| 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | |
| >$3 Million | 46 | 51 | 66 | 100 | 17 | 22 | 23 |
| >$ 5 Million | 19 | 24 | 29 | 48 | 4 | 8 | 7 |
As the chart above shows, sales volumes are down considerably from the frenzy of 2021, but buyer activity is still well above pre-pandemic levels.
Prior to Covid, the majority of luxury home sales occurred in the resort markets. In both 2018 and 2019, over 50% of luxury homes sold were in the resort communities. In 2023 and 2024, it is now over 50% selling outside the resorts. The biggest growth has been Upcountry. New developments like Baldwin Ranch Estates and Kula I’O are attracting luxury home buyers who appreciate the larger lots and big views. We are also seeing more luxury home buyers seeking primary residences. Those buyers may find more community outside the resorts.
Future Outlook for the Maui Real Estate Market
Maui is and will continue to be an incredibly appealing place to live and own a home. That said, many contrasting dynamics will remain in play in the Maui Real Estate Market in the near future.
The proposed legislation on short-term rentals is slowly making its way through the legislative process. We may or may not see a resolution before the end of the year. If it does pass, litigation could drag on for a while.
In the home market, supply is still well below pre-pandemic levels, and affordability remains a challenge. Will this week’s drop in interest rates spur more demand? What impact will the coming election have on the Maui Real Estate market? A recent survey suggested up to 40% of active home buyers are hitting the pause button until after the election.
Buying and Selling in the Maui Real Estate Market
Maui is not a conventional place, nor is it a conventional real estate market. Whether you’re a buyer or seller, working with a knowledgeable local agent is essential to achieving your goals.
Thoughts for buyers in the current market
Market conditions in the Maui real estate market are varied. There is no one size fits all approach for buyer strategies with current market conditions. Those buyers looking for move in ready homes priced at or below the median sales price need to approach the market a lot differently than those looking for a luxury home. A condo buyer looking for a place to vacation rent is going to need to do extra due diligence than a condo buyer shopping for a place exclusively for their personal use.
The new Justice Department settlement, which requires buyer representation agreements before showings and potentially requires buyers to cover some or all of their agents’ compensation, will impact all buyers.
Thoughts for sellers in the current market
The varied market conditions on Maui also impacts sellers and their go-to-market strategy. Your price point, location and the condition of the home will all impact the level of market activity you can expect when you list your property.
Condo sellers in particular need to be aware of the shift in market conditions. Buyers have a lot more options, and the ongoing regulatory uncertainty means fewer buyers actively shopping. If you want or need to sell quickly, pricing appropriately is particularly important.
Sellers will also have questions about how the new rules from the Justice Department will impact the real estate sales process and broker compensation. While some sellers may no longer offer compensation to the buyer’s brokerage, it will be worth discussing whether that approach will help them sell their homes and improve their net proceeds.
Final Thoughts
The Maui Real Estate Team always believed that buyers and sellers need their own representation. As market conditions change, this is particularly important. Buyers, we welcome the opportunity to sit down with you for a free consultation. We want to learn about your needs, and provide our insights and feedback as to how we can assist you in this dynamic market.
Sellers, it’s not 2021 anymore. As the market changes, quality representation with experience in all kinds of market conditions is important. We offer top marketing, strong negotiation skills and clear communication.
Buyers and sellers, we keep a close eye on market conditions. If you are actively searching or just thinking about getting in the market in the future, we share market statistics and insights regularly. We offer unique data on pending sales and inventory by price point and community.
Contact The Maui Real Estate Team today if you would like to talk to one of our agents or brokers about your real estate needs. We look forward to being of service.
