Maui Real Estate, December 2017 (Current State of Maui’s Real Estate)
So you are wondering what is the status of Maui’s current real estate market. Scarcity has been the biggest driver of the Maui Real Estate market for the majority of 2017. This was particularly true in the home market under $1m. The lack of inventory in this price range has resulted in a lot of bidding wars and upward pressure on pricing. It also meant a decrease in sales volume as there just aren’t as many homes to sell. Buyers are out looking, but they are having a tough time getting into homes. This is reflected in the stats with median prices that up 15% compared to the first three months of 2016 and sales volume is down 5%. The March median home price of $769,000 was the highest that we have since 2006. Again, this really emphasizes the scarcity of listings at lower price points.
Maui’s luxury real estate sales trends are up and shift south. Luxury home sales were up in the first quarter of the year. There were 16 sales over the first 3 months of 2017 compared to 11 over the first 3 months of 2016.
Over the last couple of years, luxury home sales have been stronger in West Maui compared to South Maui. Launiupoko has led the charge with Kapalua and Kaanapali following close behind. There were 8 sales in West Maui over $2m during the first 3 months of 2016. There was one sale in South Maui during that period. This year, there were 4 sales in West Maui over $2m, and there were 8 sales in South Maui over $2m. Makena’s market activity was particularly notable with 4 sales over $9m. It is difficult to account for the shift in sales volumes between the different locales of the island. Sometimes it just depends on the quality of the inventory. Makena may also be seeing a bump up due to the development of the Makena Golf and Beach Club. While none of the 4 sales in Makena were part of this development, this ultra high-end development may be drawing some affluent buyers to explore more immediate options outside of this new development.
There was also an uptick in luxury home sales outside of the resort areas. There was a single sale in each of the communities of Hana, Haiku, Kula and Paia.. That compares to a single sale outside the resorts during the first three months of 2016.
The luxury condo market has experienced some similar trends. Sales were up overall. There were twenty-three sales over $1,500,000 during the first few months of this year compared to seventeen during the first three months of 2016. 20 of the sales were in South Maui during 2017 compared to nine last year. West Maui has seen a dip in activity with three closes compared to eight in 2016. Some of this can be attributed to a decrease in inventory in Honua Kai. All of the developer units have been sold, which means we are now exclusively seeing resales.
Thus far, overall condo sales have had strong sales in 2017. Condo sales do not seem quite as constrained by inventory when you look at the sales volume. Sales volume is up 17% compared to last year. Almost all of that growth can be linked to the vacation rental condo market.
It is hard to attribute an exact reason for the boom in the Kihei condo vacation rental condo market. While we may be seeing a few more Canadian buyers, the Canadian dollar remains far below the peak that prompted the last wave of Canadians. A number of our domestic markets are feeling their own real estate booms. Places like Seattle, Portland and much of California continue to see strong activity. Likewise, a sustained bull run in the stock market may provide buyers/investors with the discretionary capital to make a second home purchase.
What can we expect over the next few months as we end out the year and head into 2018?
There is no immediate relief coming with Maui’s low housing supply issues. On the demand side, our island rents remain high and interest rates are still comparatively low. Maui Real Estate market conditions should remain similar to what we saw during the first quarter of the year. Competitive bidding will likely remain the norm for well priced homes in the $1m and under price range. You may even see a few bidding wars at well priced homes over $1m. This may be a frustrating time for buyers, as strong offers can still be outbid. Buyers should remain patient, make sure they have their ducks in a row when it comes to financing, be realistic about their financial picture and act decisively when properties that meet their needs come to market. While this is still a seller’s market, there is some variability in demand by town and neighborhoods on the island. Not all areas are booming so sellers should consult closely with their realtor and study recent sales to develop a realistic market listing price.
Mahalo for contacting Michele Muir White R(S), 71240, ABR 808.298.8448 if you are considering buying or selling property on Maui. Michele welcomes the opportunity to sit down with you or to talk via phone to discuss your real estate needs.