The headlines are not the story.

As Paul Harvey used to say, "And now, the rest of the story."

For those of you that don't remember or aren't old enough to do so, Paul Harvey was a radio personality who presented his show as news and commentary. He was professional enough to make sure the listeners knew when he was reading the news and when he was giving his point of view.

Last month, National headlines screamed "Foreclosures are up 115%" which, while true, didn't tell the rest of the story. As the chart below illustrates, 2021 had the lowest number of foreclosures since before the Great Recession. So, the eye-popping 115% increase was the gain over the previous year, 2021, which had the lowest number of foreclosures since at least 2000.

For a bit more context, foreclosures listed for sale on Maui were down 66% from January to February. That huge drop in foreclosure inventory was because we went from 3 for sale down to just 1 for sale.

Earlier this week the Maui News trumpeted "Housing sales continue downward tumble." The sub-headline went on with, "UHERO director: Sales across state falling to levels not seen since the Great Recession." Tying together "downward tumble" and the "Great Recession" would make most readers believe that the value of real estate is tumbling down at a rate similar to that during the Great Recession. As any consumer looking for a home or any Realtor trying to help that consumer can tell you, there isn't much for sale and prices are not falling on what is for sale.

Sales have slowed due to lack of inventory. We are also seeing reductions in asking prices, but selling prices are stable or "stablish" for homes and are up a bit for condos.

Read on for the rest of the story.

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SALES:

In February, home sales and home inventory were both down, but pending sales increased. The 44 home sales in February were 25% lower than the previous month. That is actually 10 fewer homes sold than December of 2008 during the Great Recession. Of course, the median selling price back then, at $567,500 was less than half of today's median price. And instead of having 264 homes for sale, there were 1,103 for buyers to choose from.

Condo sales, at 66, were up for the month, and, up from the 36 that were sold in December of '08. The big difference in that there are plenty of people who want to buy condos today, as demonstrated by the fact that we have only 3 months of inventory. In 2008 we had 1,722 condos for sale on the market or 4 years' worth of condos for sale. And buyers back then were a little nervous about investing in real estate.

_____________________________________

INVENTORY:

Clearly the downward tumbling market of 2008 had nothing to do with inventory. Today's slow sales rate has everything to do with inventory. Although, with home sales off 25% for the month and inventory down only 2.5%, but still down, the number of homes being sold compared to the number available for the month indicated we have 6 months of inventory at the current rate of sales. That is, bu most measures, a balanced market.

The rest of that story is that of the 264 homes list for sale, 219, or 83%, are priced at over $1,000,000.

Inventory for condos dropped by about 4% last month. However, the number of sales, pending sales and prices were all up. It doesn't seem like today's buyers are nearly as nervous as they buyers during the Great Recession were.

_____________________________________

SELLING PRICES: average and median sold prices

The month-to-month average selling price for a Maui home has been erratic for the last few months as you can see on the pricing chart. The median price has been much calmer, in fact, almost flat over the last 6 months.

The average and median selling prices also tell a story of the huge mismatch in supply and demand. The median selling price indicates demand for homes selling at the $1,076,000 level. The current median asking price for a home is $2,000,000, and the average asking price is $3,952,000.

The average selling prices for condos have also been up and down over the last 6 months, hitting a low at $888,000 in October, and zipping back up to $1.35M in November, then down for 2 months and back up. What a ride!

The median selling price seemed to be on a downward trend, bur then rose 38% month over month. Tune in next month to see if condo prices stay up or if the pricing tide goes out and prices settle back down a little.

The rest of the story

The rest of the story is not so much the devil is in the details, but even factual headlines can be click-bait. And we'll keep digging into the numbers and trends to try and give you...the rest of the story.

It's always good to end with a sunset.

Get more information and details

To get more information on property and trends, you can search all properties listed for sale at www.AlohaGroupMaui.com.  If you can’t find what you’re looking for there, send us an email to lee@alohapotts.com, and we’ll do our best to get an answer for you.  As we get more requests for information, we’ll add new sections to the website, newsletter or both.

______________________________________

About Aloha Group Maui

Aloha Group Maui was founded by L. Lee Potts, MBA, REALTOR® R(B) and Barbara S. Potts, MBA, REALTOR® R(B) and former California CPA. Our team consists of talented professionals; Cheri Miller R(S), Suni Novotny R(S), Keri Nicholson R(S), Myra Plant R(S), Anthony Freda R(S), Courtney Stice, R(S), Kathy Becklin, R(B), Heather Zidell, R(S), Magdalena Odonnell R(S),  and Tony Brown R(B). We are businesspeople, and we treat our clients with the same care and service attitude that we would like to receive when we do business.  We are in business for pleasure and profit.  We expect that most of our clients will enjoy the property they own in Maui (pleasure), and it would be nice for everyone if your property performs well for you (profit).  Real estate can be highly speculative, and profits are never guaranteed.  So if you are buying property in Maui, it’s a good idea to surround yourself with a professional team.

Lee Potts is the former President of an international software company and former Marketing VP of a publicly traded franchise organization.  Lee and Barbara are both licensed under Keller Williams Realty Maui.  

Barbara Potts was a CPA with Ernst and Young before joining Apple Computer back when both Steve’s were there (Jobs and Woz).  She was also Director of Strategic Marketing for Grass Valley Group, a division of Tektronix, and a business broker in California.

Copyright 2023 L. Lee Potts

Statistical information in this newsletter is based on actual sales information reported to the Realtors Association of Maui, Inc.  While this information is deemed reliable, it is not guaranteed.  This newsletter is for informational purposes only and not intended as advice for investment or any other purposes.  Real estate is considered to be highly volatile, and purchasers and sellers of real estate should always seek expert outside advice before investing.  

As storms bring freezing weather across the US, visitors flock to Maui. Right now Maui feels as busy as it has ever been based on traffic and parking, especially the parking lot at the Lahaina Safeway. Safeway's parking lot is my visual rule of thumb for just how busy Maui is at any point.

You may have noticed that the cost of "things" in the last year have gone up. If you own real estate on Maui, your property values are up. If you own a short term property on Maui, your revenue should be up as well.

The average daily rate for a "unit" on Maui in January was $426. That is up 20.4% over the rate in 2022, and up 49.3% over 2019. That data comes from the Hawaii Department of Business, Economic Development & Tourism's Hawaii Vacation Rental Performance Report (that's a mouthful). Those looking for a room in Wailea should budget $1,000 per night or more.

I noted that it feels busier, and it is slightly busier based on rental occupancy at a mere 1.3% above last year, but we are actually 17% below 2019 at this time. However, the island is still very busy, and if you are coming over, you should make reservations for activities and restaurants well in advance of arrival.

If you follow real estate, and you must if you're reading this, the press is printing gloom and doom. That may be the case where you are, but it's not the case across the country. And just what is the case on Maui? Let's do the numbers.

SALES:

Home sales on Maui continue to decline. Month over month the number of sales is down almost 14%, with just 58 homes sold compared to 66 in December. The number of sales are down 37% compared to January of 2022.

The outlook for increasing sales is not particularly optimistic based on supply; because while sales are down 37% over a year ago, new listings are down even further as there were 45.2% fewer listings this January than last. 

There are usually more condo sales than home sales. However, as condo inventory refuses to rise, the number of sales continues to fall. In January, the number of sales plummeted over 24% from the previous month. The month's 54 sales were also over 65% lower than last January, when there were 156 sales recorded. 

Just as with homes, the inventory remains stubbornly low as new listings were off 40% from the previous year. 

But there may be a light at the end of this tunnel.

INVENTORY:

Home inventory was flat month over month, but despite the lower number of listings coming to market, the number of homes on the market has been rising slightly month to month since the end of 2022. How can that be? It's simple. The rate of sales has been declining faster than new homes are coming to market.

The decline in sales, even with inventory staying relatively flat, meant that many homes were staying on the market longer than usual. Between August and November, the average days on market for homes sold went from just 97 days all the way up to 153 days. Last month, days on market dropped back to just 119 days. So, despite lower sales, what is on the market that is priced well and in good condition, is still moving pretty quickly.

The number of condos for sale rose 6% last month. Condo inventory has been rising slightly after bottoming out at 155 condos for sale in September. At the end of last month we had 219 for sale, which is still barely 4 months of inventory. It is still a good market for sellers.

SELLING PRICE: average and median sold price

If you listen to the national news you have probably heard that real estate prices have been coming down. That is most definitely not the case for homes on Maui. The average selling prices in January was 43% higher than December. But that is the trouble with averages. January's average is completely skewed by one big sale. And at $32,673,491, that is one big sale.

The median selling price, which we believe to be a better gauge, was up 7%. The median price has drifted up a little bit over the last 6 months, but prices have really been pretty stable. With signs of more buyer activity and continued low inventory there are no visible signs that prices will be declining on Maui any time soon.

Condos are a bit of a different story. The average selling price of a condo was down 3.3%, which could easily be just a normal one month fluctuation. However, the median price was off just over 18%. January was the 3rd month in a row that the median price declined. It has been running in the high $700's to low $800's pretty consistently, so a drop from $856,250 to $657,500 over three months is something to keep an eye on.

Get more information and details

To get more information on property and trends, you can search all properties listed for sale at www.AlohaGroupMaui.com.  If you can’t find what you’re looking for there, send us an email to lee@alohapotts.com, and we’ll do our best to get an answer for you.  As we get more requests for information, we’ll add new sections to the website, newsletter or both.

______________________________________

About Aloha Group Maui

Aloha Group Maui was founded by L. Lee Potts, MBA, REALTOR® R(B) and Barbara S. Potts, MBA, REALTOR® R(B) and former California CPA. Our team consists of talented professionals; Cheri Miller R(S), Suni Novotny R(S), Keri Nicholson R(S), Myra Plant R(S), Anthony Freda R(S), Courtney Stice, R(S), Kathy Becklin, R(B), Heather Zidell, R(S), Magdalena Odonnell R(S),  and Tony Brown R(B). We are businesspeople, and we treat our clients with the same care and service attitude that we would like to receive when we do business.  We are in business for pleasure and profit.  We expect that most of our clients will enjoy the property they own in Maui (pleasure), and it would be nice for everyone if your property performs well for you (profit).  Real estate can be highly speculative, and profits are never guaranteed.  So if you are buying property in Maui, it’s a good idea to surround yourself with a professional team.

Lee Potts is the former President of an international software company and former Marketing VP of a publicly traded franchise organization.  Lee and Barbara are both licensed under Keller Williams Realty Maui.  

Barbara Potts was a CPA with Ernst and Young before joining Apple Computer back when both Steve’s were there (Jobs and Woz).  She was also Director of Strategic Marketing for Grass Valley Group, a division of Tektronix, and a business broker in California.

Copyright 2023 L. Lee Potts

Statistical information in this newsletter is based on actual sales information reported to the Realtors Association of Maui, Inc.  While this information is deemed reliable, it is not guaranteed.  This newsletter is for informational purposes only and not intended as advice for investment or any other purposes.  Real estate is considered to be highly volatile, and purchasers and sellers of real estate should always seek expert outside advice before investing.  

It's not the interest rates. It's the inventory!

Aloha, here we are, 3 weeks into the New Year. Where has that time gone? A lot of people are glad to see 2022 in the rearview mirror. Inflation went crazy, mortgage rates doubled, Russia invaded Ukraine, and I'm sure you may have a few items of your own.

There are some good thing happening on Maui. There is one quick Maui update which is especially important if you are on the West Side; it seems the hospital that almost all of us thought was dead was only in a coma on life support. Joanne Johnson, the VP of the West Maui Hospital Association, reported that they have permits and have started grading the land. It is expected to be completed in 2025.

Nationally, real estate is still getting a lot of press. We hear tales of how bad things are for buyers and sellers. Specifically, interest rates are too high for buyers and properties are not selling so sellers have to lower their price.

But that is the national news, and as the bumper sticker says, "this ain't the mainland."

So, how is the Maui real estate market? It depends on what part of the market is important to you.

SALES:

It's easy, and natural, to compare today's market to 2021 and the first half of 2022 and conclude that the market is terrible. The last 3 months of 2022 felt like someone slammed on the brakes. However, with us getting into the new year we can see buyers slowly coming back and sellers listing properties again.

In December, there were 66 homes sold. That is a big drop off from December of 2022 which had 118 sales. Looking all the way back through the last 5 years, the month of December averages 90+ sales. We also saw 400 and sometimes over 500 homes on the market during those years. So, sales can't get back to normal until inventory gets back to normal. 

Oh, and, by the way, if we were selling 90 homes a month and there were 400 listed for sale, that's still a seller's market.

Last December there were 171 condos sold. This December there were only 67 sold. The 171 sales in 2021 is close to a record high and the 67 sold last month is close to a record low, but still higher than the Great Recession. 

INVENTORY:

There are currently 271 homes for sale on Maui. That is the most homes we've had for sale since December 2020, exactly 2 years ago. This year's low tide mark for the number of homes for sale in a month was in April with just 165 homes. That represented barely a month and a half's worth of homes. Now we are all the way up to 3.8 months of supply. It is still solidly a seller's market.

The last time the Maui single family home market was balanced, meaning it wasn't a buyer's market or a seller's market, was 2018 when there was 5.9 months of inventory. By 2018 supply had dropped into the 4's and kept falling. Today we are almost back up to 4 months of inventory after finishing 2021 with 1.9 months' supply according to the Realtors Association of Maui.

At the end of the month there were 206 condos for sale. That is the first time the number of condos for sale broke 200 since May 2021.

In 2018 the condo market tilted seriously toward sellers when inventory dropped to just over 4 months. Inventory stayed in that range until 2020.

In early 2020 Maui got down to 3.4 months of inventory. Then Hawaii started quarantine, and sales came to a virtual standstill. Inventory levels did start to rise dramatically at that time, but didn't hit the magic 6 month level until 3 months later in June. Inventory climbed steadily until August, hitting 743 condos for sale, creating 6.8 months of inventory, and then began a gentle decline.

Within 6 months inventory dropped more than half. At the same time sales more than tripled. That trend continued, and toward the end of 2021, we hit the proverbial bottom of the inventory barrel when there weren't enough condos for sale to last for even 1 month.

You would think that with almost anything else if the supply doubled there would be a huge amount of inventory which would drive down prices. Our inventory has actually more than doubled all the way up to 1.9 months of inventory, but it's still a seller's market.

PENDING SALES:

Pending sales represent properties that are under contract but have not yet closed. Pendings are the pipeline that tell us how many sales are likely to happen in the next couple of months.

Back in March of 2021, I remember seeing the number of properties under contract on Maui was over 900. We all thought that was amazing, unbelievable, and that it couldn't possibly last. 

We were right!

Since that record high, the number has dropped to a mere 341 overall, including 105 homes under contract and 179 condos under contract. The last time we had that few condos under contract was back in July of 2020. I cannot trace the number of pending homes as far back as I'd like, but it appears the last time we had this few homes under contract was likely during the Great Recession.

In December of 2008 there were just 54 homes sold compared to 66 for December of 2022. One big difference is that there were 1,722 homes for sale at the end of 2008. Today there are only 271 for sale.

SELLING PRICES: average and median sold price

We look at average and median prices in all categories. A lot of people like to know the average price; however, we tend to use median for most of our analysis, because the median is less likely to be skewed by outliers of a few very high priced or very low priced sales.

Selling prices for homes have been up, down, and all around for the last 2 years. However, the average selling price for the last 2 months has been just over $1.3M. That is well off this year's high of $2,255,363.

The median selling price has hovered just over and under the million dollar mark. That is off the year's high of $1,255,000, but it is a much less dramatic variance than that of the average. One might look at those numbers and conclude that prices are coming down, after all, that's what the press is saying. But you know how statistics can be. Based on what I see, I believe that the demand for the very high end, multimillion dollar homes, as opposed to the low end multimillion dollar homes, peaked and hasn't come back yet. That's what has lowered the average and median price points.

Another set of datapoints to dissuade us from the idea that prices are coming down is a disconnect between listing prices and selling prices. The average asking price for a home on Maui is $3,695,000 and the median list price is $1,794,000.

So, you can look for longer days on market and more asking price reductions, but don't expect any big changes in actual selling prices.

Condos have also been up and down a bit in terms of selling prices. However, the average selling price for a condo is still over $1 million and the median is in the high $700's. With so few condos on the market and such a high percentage of cash sales. I don't see prices easing in this segment either. The all-time median selling price was set at $856,250.

Is it a good time to buy? Is it a good time to sell?

The only question more prevalent than those two is, "how's the market?" It always depends on what part of the market you are interested in and whether you are thinking like a buyer or a seller.

If you are thinking of selling, there has never been a better time. With so much speculation about the condition of the market and some pundits saying the market is in for a big correction, if you really want to sell and not just test the market, it's a great time. There is still high demand and low supply. And while I don't expect to see prices drop, I expect prices will be flat or have less than normal appreciation. We got our big dose of appreciation over the last 2 years.

So why is it a good time to buy? First, we don't expect to see prices drop. Also, if you are financing, rates seem to be pretty stable. Some lenders have adjustable rates down in the 4's. If you are leery of adjustable rate mortgages, ARM's, look again. Today's ARM's are not like those that got so many people in trouble back in the day. Today's ARM's have a fixed component that doesn't change for up to 10 years.

Another point in favor of those buying on Maui is that we do not expect prices to drop. We expect slow, steady appreciation. So you won't benefit from trying to time the market. If you find the perfect property, or if it's at least 85% perfect, you should probably buy it.

Get more information and details

To get more information on property and trends, you can search all properties listed for sale at www.AlohaGroupMaui.com.  If you can’t find what you’re looking for there, send us an email to lee@alohapotts.com, and we’ll do our best to get an answer for you.  As we get more requests for information, we’ll add new sections to the website, newsletter or both.

______________________________________

About Aloha Group Maui

Aloha Group Maui was founded by L. Lee Potts, MBA, REALTOR® R(B) and Barbara S. Potts, MBA, REALTOR® R(B) and former California CPA. Our team consists of talented professionals; Cheri Miller R(S), Suni Novotny R(S), Keri Nicholson R(S), Myra Plant R(S), Anthony Freda R(S), Courtney Stice, R(S), Kathy Becklin, R(B), Heather Zidell, R(S), Magdalena Odonnell R(S),  and Tony Brown R(B). We are businesspeople, and we treat our clients with the same care and service attitude that we would like to receive when we do business.  We are in business for pleasure and profit.  We expect that most of our clients will enjoy the property they own in Maui (pleasure), and it would be nice for everyone if your property performs well for you (profit).  Real estate can be highly speculative, and profits are never guaranteed.  So if you are buying property in Maui, it’s a good idea to surround yourself with a professional team.

Lee Potts is the former President of an international software company and former Marketing VP of a publicly traded franchise organization.  Lee and Barbara are both licensed under Keller Williams Realty Maui.  

Barbara Potts was a CPA with Ernst and Young before joining Apple Computer back when both Steve’s were there (Jobs and Woz).  She was also Director of Strategic Marketing for Grass Valley Group, a division of Tektronix, and a business broker in California.

Copyright 2023 L. Lee Potts

Statistical information in this newsletter is based on actual sales information reported to the Realtors Association of Maui, Inc.  While this information is deemed reliable, it is not guaranteed.  This newsletter is for informational purposes only and not intended as advice for investment or any other purposes.  Real estate is considered to be highly volatile, and purchasers and sellers of real estate should always seek expert outside advice before investing.  

Aina Nalu News

Presented by Aloha Group Maui

Issue 69, Q4 - 2022

Aloha from your resident experts!

Well, here we are again, another new year with a whole new set of resolutions.

There is an estimated 3 months of inventory on Maui right now which is higher than it was last year at this time, though even with the higher numbers that 3 months still makes it a solid sellers' market. But inventory at Aina Nalu? Well, that is a whole other story.

There were 15 units sold at year end, compared to 21 sold last year. That is a decrease of 29%, and if there had been more inventory, there would have been more sales. While prices seems to have stabilized a bit, units are still being sold at or above record asking prices.

Last year at this time, a 1 bed, 1 bath unit in the G building was sold for $517,500 (which was above asking). Currently there is a 1 bed, 1 bath unit in the A building listed for $729,000. That is a price difference of $211,500!

However, according to experts, the price trajectory for 2023 will be a time of slowing. Interest rates will slowly decline, and prices may start to level off or even decline; albeit slowly. But remember, these experts are commenting on mainland prices; Hawaii is always a little bit behind, so it may be a few months before we see a noticeable shift in our market.

From October 1 to December 31 there were 2 listings and 0 closed sales. There were 0 cancelled listings, and 0 expired listings at the end of the quarter. There was 1 active listing and 1 pending sale at the end of the quarter. 

For more details on current Maui real estate prices and sales, go to the Maui Real Estate Advisor for all the stats.