It’s been a while since we posted one of our Maui market musings. In light of the fires on island in early August, market discussions felt inappropriate. The human impacts far outweighed discussion of inventory and sales volume. It’s been over two months now and feelings still remain raw on island. That said, housing is a huge part of this tragedy. The state of the market merits discussion for our clients.
You will also note that this post is not titled Maui Market Musings and some Roman Numeral. While that post title fulfilled my fondness for alliteration, the subject matter wasn’t super intuitive to the casual reader. We are still ruminating on a new title moving forward, but we are going with the basic October 2023 Maui Market Update for this version.
Table of Contents
August and September Market Activity
| August 2023 | August 2022 | August 2021 | August 2020 | August 2019 | August 2018 | |
| Homes | 46 | 103 | 133 | 109 | 108 | 123 |
| Condos | 71 | 100 | 159 | 275 | 133 | 143 |
| September 2023 | September 2022 | September 2021 | September 2020 | September 2019 | September 2018 | |
| Homes | 92 | 82 | 130 | 131 | 122 | 107 |
| Condos | 98 | 74 | 144 | 180 | 174 | 117 |
Monthly new inventory for the year was well below last year prior to the fires on the island. That said, it dropped that much further in August. With the situation on the island, many potential sellers delayed the sale of their property or in some cases opted not to sell for the time being.
New listings in September picked up. While still below pre-Covid levels, September Home and Condo listings exceeded last year. That would seem to suggest that more sellers deferred their listings for a month rather than opting not to sell.
| August 2023 | August 2022 | August 2021 | August 2020 | August 2019 | August 2018 | |
| Homes | 47 | 27 | 14 | 48 | 23 | 34 |
| Condos | 41 | 19 | 18 | 54 | 18 | 19 |
| September 2023 | September 2022 | September 2021 | September 2020 | September 2019 | September 2018 | |
| Homes | 24 | 35 | 22 | 14 | 30 | 37 |
| Condos | 22 | 25 | 14 | 51 | 26 | 34 |
We don’t usually include cancellations in these numbers, but August wasn’t a usual month. Cancellations spiked for a variety of reasons. Homes and condos listed in Lahaina may have been destroyed or rendered inaccessible. Listings in West Maui and Kula cancelled due to limited access and circumstances. Some sellers pulled their homes off the market to house displaced families.
September cancellations came in relatively low. As the start of one of our shoulder seasons, it is typically a month with a relatively high number of cancelled listings. I imagine the lower cancellations may just be due to the fact that the base level of inventory is low. A few of the August cancellations may also have been planned for September only for sellers to accelerate their timelines in light of the situation.
| August 2023 | August 2022 | August 2021 | Auguste 2020 | August 2019 | Auguest 2018 | |
| Homes | 57 | 63 | 125 | 104 | 84 | 89 |
| Condos | 63 | 105 | 150 | 112 | 131 | 124 |
| September 2023 | September 2022 | September 2021 | September 2020 | September 2019 | September 2018 | |
| Homes | 43 | 66 | 108 | 110 | 84 | 64 |
| Condos | 48 | 84 | 136 | 123 | 131 | 114 |
August new pending home sales dipped modestly compared to August of 2022. On the other hand, Condo pending sales dipped substantially below the August 2022 numbers. September home and condo pendings both experienced substantial drops compared to both September of 2022 and Pre-Covid era Septembers. The September 2023 condo numbers are particularly striking coming in 54% and 63% lower than 2018 and 2019 respectively.
| August 2023 | August 2022 | August 2021 | August 2020 | August 2019 | August 2018 | |
| Homes | 57 | 82 | 120 | 92 | 97 | 98 |
| Condos | 97 | 104 | 187 | 111 | 119 | 149 |
| September 2023 | September 2022 | September 2021 | September 2020 | September 2019 | September 2018 | |
| Homes | 66 | 55 | 110 | 103 | 115 | 179 |
| Condos | 65 | 96 | 177 | 85 | 118 | 120 |
Sales are a lagging indicator of market activity. On the surface, that would suggest that August sales were less likely to be impacted by the fires in August. That said, there were a number of cancelled contracts in the aftermath of the fire. In some cases, those were properties directly impacted by the fire or just buyers who may have had a change of heart in light of the recent events. The August home sales ended up coming in substantially lower then August of 2022 and well below “normal” sales volumes in 2019 and 2018.
I was a little surprised to see September 2023 home sales outpaced September of 2022. That said, sales volume dipped in the fall of 2022 as rising rates weighed on the market. A look back at pre-Covid sales activity provides some additional context with this September’s volume well below 2018 and 2019. Condo sales came in well below any September over the last five years.
End of the September Maui Home Inventory
The charts below show the active and pending home inventory on the last day of September by price point and Community. The last days of July and August are also included to show general inventory trends.
| 7/31/2023 | 8/31/2023 | 9/30/2023 | ||||
| Active | Pending | Active | Pending | Active | Pending | |
| <$750,000 | 4 | 11 | 5 | 10 | 10 (+5) | 9 (-1) |
| $750,000-$999,999 | 23 | 21 | 17 | 21 | 18 (+1) | 13 (-8) |
| $1,000,000-$1,499,999 | 45 | 44 | 34 | 45 | 40 (+6) | 38 (-7) |
| $1,500,000-$1,999,999 | 32 | 14 | 21 | 18 | 28 (+7) | 12 (-6) |
| $2,000,000-$3,000,000 | 35 | 10 | 25 | 13 | 31 (+6) | 9 (-4) |
| $3,000,000-$4,999,999 | 37 | 9 | 24 | 8 | 26 (+2) | 7 (-1) |
| $5,000,000-$9,999,999 | 38 | 5 | 29 | 8 | 31 (+2) | 4 (-4) |
| $10,000,000-$19,999,999 | 16 | 0 | 14 | 0 | 11 (-3) | 0 |
| $20,000,000+ | 5 | 0 | 4 | 0 | 4 | 0 |
| Total | 235 | 114 | 173 | 123 | 199 (+16) | 92 (-31) |
| 7/31/2023 | 8/31/2023 | 9/30/2023 | ||||
| Active | Pending | Active | Pending | Active | Pending | |
| Haiku | 21 | 7 | 17 | 7 | 20 (+3) | 10 (+3) |
| Hana | 12 | 1 | 12 | 0 | 12 | 1 (+1) |
| Ka’anapali | 11 | 5 | 8 | 5 | 11 (+3) | 2 (-3) |
| Kahului | 7 | 4 | 5 | 11 | 5 | 8 (-3) |
| Kapalua | 10 | 2 | 7 | 3 | 5 (-2) | 1 (-2) |
| Kihei | 24 | 11 | 16 | 18 | 27 (+11) | 13 (-5) |
| Kula | 20 | 10 | 17 | 12 | 25 (+8) | 10 (-2) |
| Lahaina | 26 | 6 | 13 | 3 | 11 (-2) | 1 (-2) |
| Makawao | 21 | 10 | 14 | 15 | 12 (-2) | 14 (-1) |
| Napili/Kahana/Hono… | 14 | 3 | 5 | 4 | 8 (+3) | 1 (-3) |
| Pukalani | 7 | 4 | 8 | 3 | 8 | 2 (-1) |
| Sprecks/Paia | 10 | 1 | 8 | 4 | 8 | 2 (-2) |
| Wailea | 23 | 4 | 19 | 4 | 17 (-2) | 4 |
| Wailuku | 16 | 43 | 13 | 33 | 21 (+8) | 23 (-10) |
Five Notable Things About The End of September Home Inventory
- Active inventory of homes for sale at the end of September rose by 15%. That comes after a big 26% plunge in active listings at the end of August. Pending sales dropped by 25% at the end of September after an 8% increase in pending sales at the end of August. After a drop in active listings in the immediate aftermath of the fires, listings are increasing now as some properties come back to market and decreased buyer activity as evidenced by the big decrease in pending sales.
- Looking at active inventory by price point, all price points except the very top of the market saw an increase in active listings. The only reason actives decreased at the high end of the market was cancellations. This is a time of the year when high end properties may withdraw for a month or two to refresh their days on market.
- Pending sales decreased at all price points except the very top of the market. The only reason high end pending sales didn’t decrease month to month is that you can’t decrease below zero.
- Shifting to active inventory by community, changes in listing were a lot more variable. Active listings increased in six communities, decreased in four communities and remain unchanged in four communities. Kihei, Wailuku and Kula experienced the biggest increase in active listings.
- Looking at pending sales by community, the decrease in pending sales is almost island wide. Hana had one new pending sale and Wailea pending sales remained unchanged.
End of September Maui Condo Inventory
| 7/31/2023 | 8/31/2023 | 9/30/2023 | ||||
| Active | Pending | Active | Pending | Active | Pending | |
| <250,000 | 0 | 2 | 1 | 1 | 0 (-1) | 2 (+1) |
| $250,000-$499,999 | 16 | 14 | 16 | 5 | 14 (-2) | 11 (+6) |
| $500,000-$749,999 | 41 | 39 | 29 | 35 | 32 (+3) | 24 (-9) |
| $750,000-$999,999 | 32 | 28 | 25 | 24 | 40 (+15) | 10 (-14) |
| $1,000,000-$1,499,999 | 34 | 18 | 29 | 16 | 37 (+8) | 12 (-4) |
| $1,500,000-$1,999,999 | 26 | 36 | 21 | 29 | 29 (+8) | 30 (+1) |
| $2,000,000-$2,999,999 | 18 | 40 | 17 | 37 | 20 (+3) | 39 (+2) |
| $3,000,000-$4,999,999 | 12 | 18 | 12 | 15 | 12 | 17 (+2) |
| $5,000,000-$9,999,999 | 11 | 2 | 10 | 1 | 7 (-3) | 0 (-1) |
| $10,000,000+ | 3 | 0 | 3 | 0 | 1 (-2) | 0 |
| Totals | 193 | 197 | 163 | 163 | 192 (+29) | 145 (-18) |
| 7/31/2023 | 8/31/2023 | 9/30/2023 | ||||
| Active | Pending | Active | Pending | Active | Pending | |
| Ka’anapali | 20 | 9 | 22 | 7 | 34 (+12) | 9 (+2) |
| Kahului | 3 | 3 | 4 | 2 | 2 (-2) | 5 (+3) |
| Kapalua | 16 | 3 | 14 | 0 | 11 (-3) | 1 (+1) |
| Kihei | 62 | 51 | 51 | 40 | 64 (+13) | 25 (-15) |
| Lahaina | 13 | 4 | 1 | 0 | 0 (-1) | 0 |
| Ma’alaea | 4 | 7 | 2 | 5 | 1 (-1) | 4 (-1) |
| Napili/Kahana/Hono | 43 | 29 | 41 | 19 | 47 (+6) | 13 (-6) |
| Wailea | 23 | 87 | 20 | 81 | 26 (+6) | 79 (-2) |
| Wailuku | 9 | 4 | 8 | 9 | 7 (-1) | 9 |
Five Notable Things about the End of September Condo Inventory
The charts below provide end of the month active and pending condo inventory by price point and district. It is worth noting that the Wailea pending sales receive a boost from 75 new developer units under contract in La’i Loa at Wailea Hills. As of the end of September, they constitute over 50% of the pending condo sales. These properties went under contract between 2020 and the the first quarter of 2021. Priced from just under $1,500,000 all the way up to over $4,000,000, these long term contracts are also skewing the pending sales upwards in this price range. We should start seeing the very first La’i Loa sales at the end of October.
- The active inventory of condos on the island at the end of September increased 18% over the last day of August. The number of pending sales on the island at the end of September decreased 11% from the end of August. This comes after both active and pending condo sales decreased significantly from the last day of July to the last day of August.
- Looking at active condo listings by price point, inventory increased in five price ranges, decreased in four price ranges and remained unchanged in one. The increase in inventory occurred with condos priced between $500,000 and $3,000,000. Active inventory decreased below $500,000 and increased over $5,000,000.
- Pending condo sales increased at five price points, decreased in four priced points and remained unchanged at one price point. The increase in pending sales was clustered below $500,000 and between $1,500,000 and $5,000,000. The decrease in pending sales occurred primarily between $500,000 and $1,500,000.
- Looking at condo inventory by community, active inventory increased in four communities, decreased in five communities and remained unchanged in one. Ka’anapali and Kihei both had a big increase in active inventory. The Napili, Kahana and Honokowai area and Wailea also saw healthy bumps in active listings. The decrease in active listings in communities tended to be far more modest.
- Pending listings decreased in four communities, increased in three communities and remained unchanged in two communities. Kihei had by far the largest drop in pending sales followed by the Napili, Kahana and Honokowai area. Kahului saw the biggest increase in pending sales.
What Does it All Mean?
Last month, we had the opportunity to attend a broker event hosted by the Realtor’s Association of Maui. One of the speakers was a Broker from Paradise, California. She provided a lot of valuable insights based on her own experiences from her community’s tragic fires in 2018. the broker spoke to the rebuild process, federal relief, insurance and more.
The broker also spoke about the impact of the fire on the real estate market. Communities within a short drive of Paradise began to see price increases shortly after the fire. Within a couple of months of the fires, nearby Chico saw a big increase in listings receiving multiple offers. Many of these buyers were displaced residents from Paradise using insurance money to buy new homes.
Will we see a similar phenomenon on Maui? The Broker from Paradise thought we would. We are definitely seeing some displaced residents buying property on other parts of the island. I know first hand of buyers purchasing replacement homes in Kapalua and replacement condos in Kihei and Kahului. That said, I am not sure that the market near Paradise is 100% analogous to the market on Maui.
Maui lost roughly 3% of its housing stock in the Lahaina Fire alone with additional homes lost to fire Upcountry. This exacerbates Maui’s already significant housing shortage. In that respect, like Paradise, there is certainly tremendous need for replacement housing for island residents.
Where things start to differ from Paradise is on the affordability side. Prices in 2023 Maui are substantially higher than the communities near Paradise in 2019. Borrowing costs are also substantially higher. Mortgage rates in early 2019 hovered around 4.5%, while just this week rates crossed the 8% barrier. Plain and simple, insurance proceeds from the fire may not be sufficient for many displaced residents to afford the replacement housing that they need.
Of course, Maui is also a big second home market. There is typically a pretty close tie between visitor numbers and second home demand. Visitor numbers are down substantially since the fires. Areas like Ka’anapali are still closed to tourism as many of the area hotels are hosting displaced residents. We aren’t sure when visitor numbers will come close to what they were prior to the fire. When they do return, how much will rising interest rates and affordability concerns impact second home buyers?
The push and pull between Maui’s incredibly limited supply and what at this point is uncertain demand will determine the market. A world with increased international tensions brings even further unknowns. Oh yeah, and of course 2024 is a Presidential election year. Based on all of the above, I would be wary of anyone who speaks with certainty about the direction of the Maui Real Estate Market. That said, we will continue to provide data so that buyers and sellers can make informed decisions.
A Little Maui Beauty to End This Post on A Good Note
