That’s right. Once again, its time for our weekly glance at real estate activity on Maui during the Covid-19 pandemic. Recent numbers reflected a slow but steady increase in buyer activity. This week, the new pending sales numbers came in a little lower than the week prior. Today’s post provides information on the new pending sales numbers and the sales numbers for the last week. I also am going to delve into the impact of Covid-19 on new listings. Together, the information on buyer demand and the supply of listings will give us some insights on market values.
This week’s pending sales
After four consecutive weeks of pending sales increasing over the week prior, this week’s pending sales came in lower. The 32 pending sales are down 18% from last week’s 39 sales. They are 47% lower than the same seven day period of 2019.
I would urge caution about reading too much into this decrease. Sales activity tends to fluctuate on Maui, and increases in market activity aren’t always linear. We shall see what happens in the coming weeks.
Digging into This Week’s Pending Sales
- The 32 pending sales consist of 17 homes and 15 condos. No lots went under contract.
- This marks eight of nine weeks that pending home sales outpaced condo sales.
- Of the fifteen pending condo sales, eight units were in complexes that cater towards vacation rentals. Other than last week, the trend has been toward more buyer activity in the second home market during the pandemic.
- After last week’s pandemic high of four pending land sales in one week, this week saw no activity. Again, I don’t think this marks any market shift as much as random fluctuations in demand.
This Week’s Real Estate Sales Activity
This was the slowest week for sales since the Covid-19 pandemic and probably the slowest week in recent memory. It is important to remember that sales are a lagging indicator of buyer demand. This is a week where the limited buyer demand during the first couple weeks of the stay at home order is really starting to show in the sales numbers. Sales are down 37% from last week. The sales numbers are 69% below the same seven day period for the year prior. I would expect that we may have one or two more slow weeks before the sales numbers start a slow recovery.
Looking at Inventory
One of our blog’s readers asked about the impact of Covid-19 on new listings. He raised a good point. Most of these posts look at buyer demand. They don’t speak to supply. The three charts below show the difference in the number of new listings in March, April and the month to date for May compared to the same time frames in 2019.
The charts above show a clear decrease in the amount of new inventory during the Covid-19 pandemic when compared to the same period of 2019. When I first looked into the numbers for this post, I intended to just track listings in general during this time frame. I am glad I decided to break it down by property type. While homes, condos and land are all down in new inventory, the drop in new listings is not uniform across the board.
New Home Listings
The number of new home listings dropped precipitously in March with 40% fewer than the year prior. New home listings decreased 41% in April compared to April of 2019. The decrease for the first 21 days of May compared to the first 21 days of May 2019 isn’t quite as drastic. The new inventory is only 12% lower.
For a little context, there was a downward trend in new home inventory prior to Covid-19. New home inventory decreased 9% during the first two months of 2020 compared to the first two months of 2019. We went into the pandemic with a low inventory of homes. While demand is down, so to are new home listings. We seem to be seeing a slight upward trend in new home listings this month just as we also see more buyer demand.
New Condo Listings
In what could be considered something of a surprise, new condo listings increased 11% in March compared to March of 2019. In April, new condo listings fell 24% compared to April of 2019. Through the twenty-first of May, new condo listings are down 9% compared to the first three weeks of May 2019.
Again for context, new condo listings decreased 9% in the first two months of 2020 compared to the first two months of 2019. The overall new condo inventory numbers during the pandemic are down 7% overall. It will be interesting to see what happens with condo inventory moving forward. Of the three property types, this part of the market appears to be experiencing the least significant decrease in new inventory.
It is worth also worth noting that large swaths of the condo market were particularly strong before Covid-19. Demand was outpacing supply resulting in strong upward price pressure.
New Land Listings
New land listings experienced the biggest drop during Covid-19 compared to the year prior. In March, they dropped 43% compared to March of 2019. For April, they came in 42% below the number of new land listings in April of 2019. Thus far for May, new land listings are down 48% compared to the same period last year.
As with homes and condos, there was less new inventory of land for sale on island prior to the pandemic. We saw 14% fewer new land listings in January and February compared to the same months in 2019.
What The Inventory Numbers Mean
Before delving into the big picture, I wanted to look at the one outlier from the new listings numbers above. March new condo listings stick out with the eleven percent increase over 2019. While many homeowners were reticent to let buyers into their homes to look at property in late March, most vacation rental condos suddenly sat vacant. I surmise that some second owners felt perfectly comfortable putting their places on the market. The numbers seem to support this assertion as the new vacation rental condo listings soared by 31% over last March. Conversely, new listings of condos that prohibit vacation rentals decreased 12%.
Now on to the big picture. The Maui market is not alone when it comes to the decrease in inventory. We appear to be mirroring national trends. The national decrease in inventory combined with surprisingly resilient demand is leading to price increases in quite a few markets throughout the nation. While I can’t see clear evidence of price increases on Maui, our buyer demand hasn’t recovered to the same extent as many mainland markets. That said, the balance of decreased supply and decreased demand seems to be keeping prices stable at this time.
Looking to the future, we will continue to keep an eye on changes in inventory. I don’t have any prognostications, just questions at this point. Will sellers who deferred putting their home on the market feel more comfortable listing in the coming months with the virus numbers limited on island? Will more vacation rental condos come on the market due to the lack of visitors on island? Rest assured, we will do our best to keep a track of these numbers so buyers and sellers can make informed decisions.
Contact The Maui Real Estate Team if you are interested in buying or selling a property on Maui during these extraordinary times. We bring decades of experience to the table and a commitment to strong service and providing the best resources for informed decision making.
